#CostaRica 🇨🇷 #BDS_LaborAlert: Published Law on the "Protection of Whistleblowers and Witnesses of Acts of Corruption against Labor Retaliation”

In accordance with the text of the regulation, it aims to "provide protection to individuals reporting and witnessing national or transnational acts of corruption against labor retaliation they may suffer due to their status as such, and encourage the reporting of these offenses" (Article 1). Specifically, the law includes within its scope the definition of the following "acts of corruption":

• Require or accept, by a public official or a person exercising public functions, any object or benefit of monetary value for oneself or another person in exchange for any action or omission within the scope of their functions.
• Offer or grant to a public official or person exercising public functions any object of monetary value or other benefits in exchange for an action or omission within the scope of their functions.
• Any action or omission by a public official or person exercising public functions aimed at illicitly benefiting oneself or other third parties.
• Intentional exploitation or concealment of the benefits derived from the aforementioned acts of corruption.
• Participation as an author, co-author, instigator, accomplice, undercover, or in any other way in the commission, attempt, association, or agreement to commit the aforementioned acts.
• Acts specifically classified as crimes under the "Law against Corruption and Illicit Enrichment," as well as offenses included in Title XV of the Criminal Code, among others, that harm public function and probity.

Protections provided by the law

As stated, this law seeks to provide protection against any "labor retaliation" to individuals who have reported (publicly or privately) or are witnesses to any of the specified acts of corruption, summarized above. These retaliations include the following (Article 4 of the approved text):

• Suspension, dismissal, or equivalent measures.
• Demotion or denial of promotions.
• Unfavorable changes in working conditions.
• Restriction or discrimination in promotions or training opportunities.
• Negative performance evaluations or references.
• Initiation or imposition of disciplinary measures.
• Coercion, intimidation, harassment, etc.
• Discrimination or unfair or unjust treatment.
• Early termination of a fixed-term contract.
• Non-renewal of a fixed-term or specific employment contract if the conditions that gave rise to it persist.
• Revocation of already granted leaves or permits.
• Other reputational, professional, financial damages and the like.
• Any other form of labor retaliation.

Individuals who have reported corruption acts covered by this law or are witnesses to them will also enjoy a protection regime against all these forms of possible retaliation, as well as against the termination of their employment relationship.

Therefore, these individuals can only be dismissed for a serious offense that justifies termination without employer’s responsibility, with prior authorization from the Ministry of Labor and Social Security, during the protection regime period. This same protection applies to other individuals, colleagues, or family members of whistleblowers or witnesses who are in the same work context.

Additionally, individuals who have suffered retaliation, including dismissal, will have similar safeguards to employees who have access to the "due process protection" regulated in the Labor Code, such as the ability to request compensation or job reinstatement, free legal aid, access to a summary process, among others.

Application to the private sector

While the focus of this regulation is the protection of individuals reporting or witnessing possible acts of corruption, this does not mean it has no application or impact on private sector employees, both implicitly and explicitly.

Implicitly, this law covers not only individuals who qualify as "public officials" in the strict sense but also individuals who, for some reason, are performing "public functions." Therefore, even if they are workers engaged with a private sector employer, as long as they are performing tasks or functions that can be classified as "public," they will fall within the scope of the law. Based on this, anyone reporting or witnessing possible acts of corruption by these individuals, even if not a public official in the strict sense, will enjoy legal safeguards, and the employer, even if a private legal entity, is required to respect these safeguards. Explicitly, Chapter III of this law regulates the scenario of corruption reports in the private sector. Article 18 of the regulation establishes the obligation for every employer with more than 50 employees to have a "channel for receiving and tracking complaints." This channel must also ensure the confidentiality of the whistleblower's identity and any data that could be used to infer this person's identity, even when they have voluntarily disclosed their condition.

Penalties

Finally, in addition to the contingencies a private sector employer may face in the context of a labor lawsuit for retaliating against a whistleblower or witness, the law imposes a fine, calculated based on the concept of the "base salary" included in Law No. 7337. At the time this alert was written, a "base salary" is equivalent to ₡462,200, an amount that may vary for 2024.

This fine will be determined by the court in the same judgment that resolves the substantive issue of labor retaliation, but may be:

• Between 1 and 10 base salaries if the reported acts of corruption occurred within the company or before a public administrative body.
• Between 100 and 1000 base salaries when the retaliation is against a whistleblower or witness of an act of corruption during a criminal proceeding.

According to the sole transitional provision of the law, the Executive Branch must issue the relevant regulations within the next 12 months, but the law is still effective and in force from its publication.

As a result of this law, significant changes will occur in the management of labor relations in Costa Rica. It should be noted that this is not a reform applicable only to the public sector; private sector employers must act in response to the creation of a new category of individuals subject to a protection regime, as well as fulfill obligations related to the establishment and maintenance of a complaint receipt and tracking channel at the workplace, as appropriate.