#CostaRica 🇨🇷 #BDS_Article: Fathers Stay at Home Too
A century ago, the idea of a father staying home to care for a newborn would have been met with...
An employee’s poor performance may constitute serious misconduct and, therefore, justify dismissal without employer liability (i.e., for cause).
However, it is important to understand that this ground for dismissal is not expressly listed in Article 81 of the Labor Code—which enumerates the main causes for dismissal without employer liability—but has instead been developed by jurisprudence, based on the interpretation of other provisions within the Labor Code.
Nonetheless, we have subsection (b) of Article 71 of the Labor Code, which requires the employee, in relation to their work, to “perform it with the appropriate intensity, care, and diligence.” Similarly, Article 19 of the Labor Code binds the parties to the obligations established in the contract, as well as “to the consequences arising therefrom in accordance with good faith, equity, usage, custom, or the law.” Finally, subsection (h) of Article 81 of the Labor Code establishes that dismissal will be justified when an employee repeatedly refuses to follow the employer’s instructions “intended to achieve greater efficiency and performance in the work being carried out.”
Our jurisprudence has helped clarify when we are dealing with sanctionable poor performance, as opposed to poor performance that cannot be attributed to the employee. The two key elements in differentiating between them are intentionality and repeated behavior.
For poor performance to be considered a breach, it must stem from a conduct that is within the employee’s control. In other words, the breach materializes when an employee is fully capable of performing their duties within expected efficiency standards but, for reasons attributable solely to them, chooses not to do so. Additionally, this failure is not isolated or sporadic but instead reflects a sustained pattern of conduct over time.
If, on the other hand, an employee—after having been properly trained—fails to achieve the expected results and has never reached the performance level of peers carrying out the same functions, then dismissal without employer liability is not appropriate. In such cases, the employee’s underperformance is not due to a conscious choice, but to an inability to meet the expected performance standards.
In that scenario, the company should assess its recruitment and selection processes to ensure it is hiring individuals who possess the necessary competencies to perform the job at the required level and efficiency.
Returning to poor performance as a just cause for dismissal, if a company wishes to invoke this ground, it must ensure it has a performance evaluation system in place—one that allows for the objective measurement of the employee’s performance—and tools to support performance improvement, with the goal of helping the employee reach the expected standards.
The employer must correctly identify which type of poor performance is sanctionable. If it is determined that the issue arises from the employee’s attitude or will, then—pursuant to the principle of good faith—the employer must attempt to provide the employee with resources to help improve their results. After these are implemented, and the employee’s performance is monitored, the employer must document whether there has been improvement, or whether disciplinary action is warranted due to the failure to improve.
Our labor legislation lacks specific provisions regarding which tools an employer may use, and even less standards exist on how such tools should be implemented. However, mechanisms such as follow-up plans, retraining, or Performance Improvement Plans (PIPs) are good examples of measures an employer can adopt—together with the appropriate reprimands—to address these situations when the employee fails to improve after undergoing such programs.
The existence of a clear metric or evaluation showing unjustified and unacceptable underperformance, along with a well-documented follow-up plan evidencing the employer’s good-faith efforts to help the employee improve, are essential prerequisites to consider invoking just cause for dismissal based on underperformance.
If the company does not have a robust structure for performance evaluation and continuous improvement, dismissing an employee for poor performance can be highly risky. In such cases, the alternative would be to proceed with dismissal with employer liability, provided that the decision cannot be interpreted as discriminatory against the employee.
Francisco Salas
Co-Founding Partner at BDS Asesores
