How to temporary suspend a labor contract in Costa Rica
14 June, 2018




Temporary Work Suspension and Employment Contracts by the Employer

In Costa Rica, there is a possibility that under certain circumstances, a work contract may be suspended and because of that, the labor contract may be due to the worker’s own situations or the employer’s.

There are situations in companies that prevent the production or provision of services, and that is why Costa Rican legislation provides the temporary suspension of the employment contract in special cases clearly indicated, which lead to stop, for a period of time, the provision of service of one or several worker. Therefore, the employer ceases the payment of salaries, without this implying the termination or extinction of the rights and obligations that come from the contracts (we insist: it only implies that the worker is not obligated to work or to remain in the workplace, and the employer is not obligated to pay the salary).

Causes for suspending an employment contract

In this regard, the grounds for the suspension of the contract by the employer are:

  1. The lack of raw materials, provided that this is not the employer’s fault;
  2. When there is a situation of major force or fortuitous event that seriously affects the activity of the company;
  • When the employer dies or is incapacitated, demonstrating that this fact does not allow the normal execution of the activity.

Should any of the above causes arise, the procedure may be initiated to receive the approval to suspend the contracts before the National Directorate of Labor Inspection of the Ministry of Labor, for which, in accordance with the provisions of Article 75 of the Labor Code, are fixed three days, since the cause of suspension arose.  However, the Manual of Legal Procedures of the Labor Inspection establishes that said term should not be understood as an expiration, since it can be initiated with the process, as long as the situation generating the suspension prevails.

Procedure to temporary suspend a labor contract

The procedure of these cases begins with the review of documents and continues with a visit to the work place. In this act, workers and/or employers’ representatives may be interviewed; that is why it is very important to have the proper documentation and updated information in the workers’ files.

What the National Directorate of Inspection solves has no further appeal; if the request is accepted, the temporary suspension of the employment contracts will be declared. In case of rejection, workers can choose to terminate themselves, and for the same reason, the labor contracts with employer liability.

In those cases where the suspension are authorized, the employer must inform when they can resume the contract, since the Ministry of Labor will have the responsibility to contact the workers to notify them of the resumption of their duties. If the employee does not show up within a period of 15 days after the communication, the employment relationship can be terminated without employer liability.

In general, the most significant effect of the suspension of the employment contract is the employer’s possibility of exempting himself from paying wages to workers during the period of suspension. However, employers should be careful with regard to other obligations, such as the risk insurance and the Social Security, because it is precisely these types of obligations that employer must maintain up to date in order to not harm the worker, and also, to not expose themselves to sanctions or claims before administrative or judicial institutions.

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If you require legal advice in the area of labor law, ERP Lawyers & Associates offers a team of lawyers with extensive expertise in this area. Contact us and receive personalized services.