The early conciliation hearings in the alimony process

When we talk about alimony, many people think that it is an amount imposed by a third party (Judge) and that it simply must be paid, without any objection. A few years ago, the corresponding Courts received the request for alimony and the judges established a provisional alimony quota, considering only what the person filing the claim stated and presented. The defendant, at that time, only had the option of filing an appeal; however, while this appeal was being processed, he was obliged to deposit the amount that was established.

The Alimony Law mentions that conciliation can take place at any stage of the process; however, it does not expressly establish a conciliation hearing prior to the beginning of the process, as the Courts carries out actually. When consulting the topic with several judges, they indicated that this hearing is an institutional measure, established three years ago for not setting a provisional alimony amounts that were disproportionate.

What is the early conciliation hearing?

The conciliation hearing occurs immediately after the request for alimony is filed.  The defendant is informed, via phone call, that there is a child support process and is invited to participate in the early hearing. If the person says no, the claim is processed, setting a provisional alimony amount, as has been done before these hearings were implemented.

If the defendant agrees to participate, a hearing is scheduled, usually within ten days after the call. In this conciliation hearing, there will be no discussion of the merits of the case, as with any other conciliation hearing. This is an ideal space for the person requesting the alimony to explain their expenses and needs; in addition, the person obliged to pay may also expose his obligations and economic possibilities to try to reach an agreement of an amount that is fair, both for who receives the money, and for who is obligated to pay it.

It is important to indicate that the phone call made by the Court in no way replaces the notification; therefore, if the defendant does not agree to participate in the hearing, he/she must wait to be notified personally, at his/her home.

Are there disadvantages to the early conciliation hearing?

Normally, the early conciliation hearing does not present any disadvantage, rather it is favorable for the defendant, since it is a possibility that he/she has to achieve an amount of alimony that is consistent with its income and obligations. However, in practice, there are aspects that put the defendant at a disadvantage regarding the person requiring the alimony.

When the defendant receives the phone call from the court, they tell him/her that it is not mandatory to bring a lawyer, since it is simply a conciliation hearing, and when he/she arrives at the hearing, commonly finds out that the other party does have a lawyer.  This causes that the party that goes without legal representation often ends up accepting an agreement that is not reasonable and impossible to fulfill.

The best option for both parties, is to always hire a lawyer to attend any hearing.

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Temporary Suspension of Work and Employment Contracts by the Employer

In Costa Rica, there is the possibility that, under certain circumstances, work may be suspended and because of this, 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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The Affectation of Family Patrimony in Costa Rica

Article 51 of the Political Constitution of Costa Rica mentions that “family, as a natural and fundamental element of society, is entitled to the special protection of the State.” Additionally, Article 65 of the same law also states, “the State shall promote the construction of popular housing and create the worker’s family assets”. This means that it is the State’s main obligation to protect the family, as well as its assets. In this case, the affectation to the family patrimony refers to the immovable property that is used as the residence of the family, which can be urban or rural.

The owner of the property can only constitute the affectation of family patrimony and the affectation must be made in a public deed, registering it in the Property Registry. The only people who can be beneficiaries of this affectation are the spouse, minor children, ascendants and cohabitating indeed. It is not necessary that these people live with the owner of the property; however, if it is necessary for the beneficiary to live in the property and have a situation of dependence, in relation to the owner of the property.

Legal basis regarding the affectation of a family’s property

The legal basis of the family affectation can be found in article 46 of the Family Law, which mentions that the property of family affectation cannot be more than 1000 square meters in urban areas, and 10,000 square meters in rural areas. The property cannot be alienated or encumbered (sold, donated, mortgaged, among others) without the consent of either spouses or cohabitants, and after demonstration in a process of diligences of utility and necessity.

The property that is under the affectation cannot be pursued by personal creditors of the person who owns the property, unless the debts have been contracted by both spouses or by the owner prior to the registration of the affectation to family patrimony.

This affectation is not perpetual, since it can be extinguished or terminated at any time, according to article 47 of the Family Law, for the following reasons:a) Mutual agreement of the spouses or cohabitants.b) Due to death or majority of the beneficiaries.c) By judicially declared separation or by divorce. In this case, the continuation of the affectation can be arranged, as long as there are beneficiaries with right.d) By judicial order, at the request of the owner, once the process has been filed and the utility and necessity of the affectation have been proven,e) When, in fact, the property ceases to be used for family inhabitancy or for small exploitation, after verification by the Court.
This affectation has as primary objective the protection of the family patrimony, so that the family always can always have a place to live, without having to worry about disposals by a negligent owner, or any type of lien for debt.

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Suspension of the worker without salary as a substitute for dismissal without employer liability

The disciplinary suspension without salary is contained in article 68 clause e) of the Labor Code, in which it establishes the following: “Article 68.- The work regulations may include the technical and administrative rules necessary for the correct operation of the company; those related to hygiene and safety of work, as indications to prevent professional risks and instructions for providing first aid in case of accidents and in general, all others that are deemed convenient. In addition, it will contain: (…) e) The disciplinary provisions and the ways to apply them. It is understood that it is prohibited to deduct any amount from the salary of workers as a fine and that the suspension of work without pay, cannot be decreed for more than eight days or before having heard the interested party and the co-workers indicated by the affected worker; (…) “.
From the analysis of the previous article, along with the provisions of articles 66 and 67 of the same law, which regulate what refers to the Internal Labor Regulations, it is clear that, in Costa Rica, even though the disciplinary power that the employer has is recognized, It is limited in this matter, by restricting its action to the existence of an internal regulation, which must be previously approved by the Ministry of Labor and Social Security (MTSS in Spanish); however, Costa Rican jurisprudence has established that suspension of work without pay as substitute for dismissal without employer responsibility, implying that the sanctioned offense must be of equal gravity to a fault committed for dismissal without employer liability. The law defines a maximum of 8 days, in which, although the employment contract is suspended by the sanction, the worker accumulates seniority, maintaining the existence of the employment link, despite the suspensive condition of the contract.

The suspension as a disciplinary measure

It is important to stress that the suspension as a disciplinary measure should not be used lightly, because you can only resort to such a measure to sanction a fault that merits dismissal without employer responsibility, and provided that the corresponding procedure is carried out as we have already indicated.
Also, it is important to take into consideration that the sanction as a disciplinary measure is a “clean slate”; that is, imposing the suspension without pay, as a temporary measure, erases all the disciplinary history that the worker has accumulated during the employment relationship.
In addition, unless the company has internal work regulations, the employer cannot assign the suspension to specific offenses, other than those stipulated in Article 81 of the Labor Code, which details the serious offenses that justify dismissal without employer’s liability.
Referring to the sanction for suspension without pay as an alternative measure to dismissal without employer responsibility, it must be reserved for the most serious cases, and should not be seen as an intermediate sanction between a warning and dismissal; this is due to the implications of using this sanction for the employer and its employees, given the negative pecuniary impact it has on the worker, so it must be substantiated and executed in written form, safeguarding the right to defend both – employer and worker – before an eventual process or claim.

New prohibitions of discrimination in the workplace

The Labor Procedural Reform that came into force recently, introduced important changes to the Labor Code, among them, the prohibition to discriminate against workers in any of the stages of the employee-employer relationship (pre-contractual, contractual or post-contractual).
Previously, only four discrimination causes were considered: for reasons of age, ethnicity, gender or religion; causes that had been expanded by different guidelines of the Ministry of Labor; however, the Labor Procedural Reform, in addition to these prohibitions, includes the prohibition to discriminate based on race, sexual orientation, marital status, political opinion, national extraction, social origin, filiation, disability, union affiliation and economic situation of the worker, or for similar conditions that may be considered grounds for discrimination; this means that any other cause that the applicant or worker considers a discriminatory act and that is not established in the previous list, the worker can submit the complaint to the Labor Authorities (Ministry of Labor), or before the Labor Courts, a possibility already established by our legislation.
The new regulation responds to the changes experienced by society, which is increasingly diverse and plural. These are criteria that, in some cases, have already been considered by the Courts as situations in which a person should not be discriminated against for an employment opportunity, for an improvement of their working conditions, let alone be considered as causes for the termination of the employment relationship.

Considerations for hiring personnel

The considerations made by the employer should focus on the formal criteria of the position that is intended to hire, or which is already occupied by the person who was hired.
The workers who consider themselves injured should detail the facts for what they consider that they were discriminated, in addition to presenting the comparison criteria that must accompany their claim.
If it is proven that the person was discriminated for any reason, the judge is entitled to order reinstatement in their work, in addition to receive the established compensation. Likewise, the new regulations indicate that, in the case of public employment, any administrative act such as dismissal, suspension, transfer, exchange, or promotion that takes place and involves an act of discrimination may be voidable if the interested party so requests.
As a summary, we can highlight three important aspects that come with the new law, in terms of discrimination in labor matters:

1.The burden of proof of an employer discriminatory act by the worker. The worker’s allegation of discrimination does not imply a presumption of truth, since Article 409 says that “whoever alleges discrimination must specifically indicate the factual support on which he bases his argument and the terms of comparison that substantiate his claim.” If the worker complies with this procedural obligation, then the burden of proof is shifted to the employer, as provided in article 478 paragraph 10): “In any case, the employer will have to prove his statement, when there is no agreement on: … 10) The justification of the objectivity, rationality and proportion of the measures or behaviors identified as discriminatory in all claims related to discrimination.”
2.The limitation period for alleging an employer discriminatory act. There are three terms that could apply: a six-month term, in accordance to article 416, counted from the moment when the employer gave reason for the separation without having terminated the employment relationship; the same semiannual term, since the discriminatory dismissal was given, to challenge said termination and seek reinstatement, according to also article 416; or, the one year term from the termination of the employment contract, in accordance with article 413 of the Labor Code.
3.The establishment of grounds for dismissal for serious misconduct in article 410, in accordance to article 81, subsection l), for “all workers who, in exercise of their daily labors related to recruitment, selection, appointment, movement of personnel or any other another form, incur in discrimination.”, so that the people who oversee the recruitment and selection process, and in general the administration of labor relations in a workplace, can commit a serious fault that justifies the termination without liability of their contract, if they in any way incur in any form of discrimination in their work.

A special mention must be made to the procedural mechanism against discrimination that included the Labor Procedural Reform. From article 540 of the Labor Code, a process of guardianship was established, which, at first, is given in cases of violation of special privileges, but the same article allows to be used in cases of labor discrimination, so in urgency or simplicity of the case, or the seriousness of the act, the law indicates a very short procedure.
Based on the foregoing, it is clear that the reform is sensitive, so the organizations and individuals, who hire personnel, should review their recruitment processes, as well as the disciplinary procedures used in the work centers to avoid presenting situations that may be considered discriminatory acts.

NOTE: This article, which is based on regulations in Costa Rica, is issued for informational purposes, not for advice. It is distributed to help you know your rights and obligations according to the law, and is published by: ERP Lawyers & Associates.

The payment of the tax to corporations for the 2018 period

This past January 31st, the deadline for the payment of the tax on corporations expired, amount that is updated every year according to the base salary established by decree annually, which for this year is four hundred thirty one thousand colones (₡431,000.00).

It is important to remember that companies that are inactive, must pay a total of fifteen percent (15%) of the base salary; active companies that generate an income no higher than one hundred twenty (120) base salaries, must pay a tribute of twenty five percent (25%) of the base salary; those companies that have an income between one hundred and twenty (120) and two hundred and eighty (280) base salaries, must pay thirty percent (30%) of the base salary; and finally, companies with a gross income greater than 280 base salaries must pay a tax of fifty percent (50%) of the base salary.

Those said payment percentages were established by law, so they apply every year, the only thing that will change is the corresponding amount, depending on the base salary established each year.

The consequences of not paying these taxes are quite serious for the companies, since, first, they generate late interest rates, which are fixed by the Tax Authorities, but never may exceed twenty percent (20%) of the amount owed; and, if the corporations are in default, the National Registry does not issue certifications of any kind, nor register documents in favor of the delinquent company. Besides, the default payment constitutes a legal mortgage and/or preferential pledge on the assets of the delinquent company.

In addition, the delinquent corporations cannot participate in administrative contracting processes. It should also be remembered that those companies that have more than three periods as delinquent, risk a dissolution ex officio. The only companies that are exempt from paying this tax are those that are registered as small and medium enterprises (PYMEs in spanish).

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The reasons for the enactment of the Minority Investor Protection Law

On August 4, 2016, the Costa Rican Congress approved the Minority Investor Protection Act, Law No. 9392 that came into force on October of that same year,  filling an important legal vacuum within corporations in Costa Rica and that also places our country at the levels of best practice and standards of the Organization for Economic Cooperation and Development.

Regulatory authorities, worldwide, have made enormous efforts to improve the rules that govern the capital markets, this to make its operation efficient, credible and reliable. These efforts sought to increase the transparency of the markets as well as to safeguard the interests of investors, especially small investors, because of their disadvantaged position in the power relationship.

Responsibility to protect the rights of the small investors

It is up to each country to protect the rights of the investors through regulations that encourage the implementation of good practices of corporate transparency, which provide better access to information and ensure protection for minority investors against possible conflicts of interest. The World Bank, in its publication “Doing Business 2015: Beyond efficiency”, placed Costa Rica that year in the 181st position, almost at the bottom of the ranking in terms of investor protection. By 2017, our country jumped to position 119, which shows a great advance, effort and work by the authorities to protect these investors.

The Doing Business Index is a decision-making instrument for investors, mainly foreigners, when assessing the feasibility of conducting a business, based on ten indicators that cover the life cycle of a business. The Doing Business method defines the minority shareholder as one who has a percentage equal to or less than 10% of the share capital.

Under this scenario, in order to increase protection for investors, especially minority shareholders, it was necessary to carry out punctual reforms to the Code of Commerce, in its articles 26 and 189, as well as the Civil Procedure Code in its article 426; which allowed the country to be at the level of the best international practices in this matter

Achievements of the Minority Investor Protection Law

The Minority Investor Protection Law has helped to strengthen the small and medium-sized associated companies under the guise of consortiums for the benefit of better conditions that meet their needs, since there was not an adequate legal framework to protect them as minority investors.

The article 26 of the Commercial Code, in its first paragraph, is amended to incorporate a right of minority shareholders to examine those transactions that involve the disposal of assets of the company – or the constitution of guarantees through them – provided that such operations represent a value equal to or greater than 10% of the total assets of the respective company. In this regard, it is also important to notice that the Law also requires, through paragraph 32 ter of the same Law, that these transactions must always be approved by the Board of Directors.

It is important to point out that the Law decreases the percentage of corporate capital necessary to request a Court order to conduct an audit of the company, of 20% – as it was established – to 10%. In addition, the Law adds a new second paragraph to Article 189 of the Commercial Code to establish, explicitly, the duty of diligence and loyalty of corporate directors and other administrators, as well as their duty to act in the best interest of the company, taking into account that it counts the interests of shareholders, employees and the public.

Finally, the Law reforms article 426 of the Civil Procedure Code regarding the abbreviated process; a process through which the challenge of corporate resolutions taken at a meeting of shareholders, or at a board of directors is known. In this sense, the Law extends the power of the parties to request the Judge to present documents from the defendant company.

New modifications to the Traffic Law

The Traffic Law, object of multiple critics by a large sector of the Costa Rican citizenship, was reformed in 2017, and the changes entered into force on July 17th. This new reform of the law establishes provisions, prohibitions and fines not previously contemplated by said Law.

What are the most important modifications to the Law?

Within these modifications there are reforms and additions to several articles of the Traffic Law; nevertheless, here we break down the ones of greater transcendence:

*The driver who does not carry a driver’s license will pay a fine of twenty-one thousand nine hundred and ninety-two colones with sixty eight cents (¢ 21,992.68); and a driver who is driving a vehicle without the corresponding license must pay a fine of one hundred three thousand six hundred seventy seven-colones with seventy seven cents (¢ 103,679.77).
*The circulation of vehicles with mirror or limousine type polarized windows is prohibited, except for the factory polarization that allows visibility in and out of the vehicle. In case of non-compliance, the fine is one hundred three thousand six hundred seventy seven-colones with seventy seven cents (¢103,679.77).
*A fine of three hundred six thousand eight hundred and fifty colones (¢ 306,850.00) is imposed on that person who refuses to take a breathalyzer test.
*The result of a breathalyzer test can be disputed and a second test is entitled; however, if, in the second test, the result is positive, the person must pay the fine.
*Producing noise, emission of gases, fumes or pollutant particles that exceed the established limits, will be considered serious and therefore a category A fine will be applied. It will be of the same amount indicated above (¢ 306,850.00).
*Those drivers exceeding the maximum capacity of people inside the vehicle, must pay a fine of one hundred three thousand six hundred and seventy-nine colones and seventy-seven cents (¢103,679.77).

Following the same line, the reform of the Traffic Law also prohibits parking:

*In front of entrances or exits of schools, hospitals, clinics, fire stations, Red Cross, public or private parking spaces and garages.
*On roads or sidewalks in a way that impedes free transit, impairs visibility or endangers the safety of others.
*In places marked with yellow stripe.
*At less than 5 meters from a hydrant or pedestrian crossing areas, less than 10 meters from an intersection at urban roads or less than 25 meters from an intersection at non-urban roads.

In addition to these modifications made upon the prohibitions and amounts of the fines, there are also new reasons that authorize the traffic officials to carry out the removal of the plates, such as:

*When the right of circulation or compulsory insurance has not been paid.
*When a public transport unit equipped with a ramp or platform circulates with the device in poor condition.
*When the vehicle is used to provide public transport service without the respective authorizations.
*Produce noise or emissions of polluting gases, fumes or particles that exceed the established limits.
*When the vehicle obstructs public roads, the circulation of people and vehicles, sidewalks, bike lanes or when it remains badly parked.

Compliance with the Traffic Law is vital to avoid the growing wave of road deaths as well as accidents that result in severe material damage.

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Alimony obligation with children of legal age

Child support is a day-to-day issue in many families; however, there is an observation to be made regarding the alimony which is not normally discussed, and is that of alimony in favor of children of legal age. It is common to think that, once they turn 18, they lose the right to receive an amount for child support; however, this is not so.

Article 173, subsection 5 of the Family Code establishes that, if the child is of legal age but under twenty-five years old, studies with a reasonable academic load and obtains good grades, he/she has the right to continue receiving or to request alimony from the father or mother. It also indicates that the person of legal age can be a beneficiary for alimony, if he / she has not finished his/her studies to acquire a profession or occupation trade, but this right cannot go beyond the age of twenty-five.

It is important to mention that, when the children reach eighteen years old, the parent obligated to pay alimony is not exonerated ex officio from the payment of said amount; if he/she wants to break free from this responsibility, first, he/she must present before the respective Court a beneficiary exclusion incidentin case of paying child support to more than one child; or else, an exoneration incident, in case of paying alimony to only one beneficiary. Child support does not automatically disappear when the beneficiaries reach eighteen years of age; it is the defendant’s obligation to manage the exclusion incident or exoneration incident, as the case may be.

Changes in the child support process once the beneficiary turns eighteen

Here are changes in the alimony process when the beneficiary reaches legal age and these must be considered, as they are of vital importance. When the beneficiary reaches the age of eighteen, he/she is able responsible for its own acts and with that, the father or the mother of the beneficiary is no longer the representative. The beneficiary must inform the respective Court that he/she wants to continue receiving alimony and will be responsible for withdrawing the money and carrying out any side-process that the main process requires. Only in special cases, such as when it is proven that the beneficiary has a disability, is that a representative for the child is allowed after the age of eighteen.

Reasonable academic load

As mentioned above, one of the assumptions for a person of legal age to continue receiving alimony is that he/she has good grades and that he/she has a reasonable academic load appropriate for his/her age. This situation is at the discretion of the Judge, since there is no definition in our legal system of what a reasonable academic burden is. Judges have received the discretionary obligation to decide the content of these legal concepts. The Judge is obliged to make an evaluative judgment between the effort that the beneficiary must develop in his/her studies, as well as the amount and difficulty of the subjects, his age, his learning conditions, possible learning limitations, and any other external element that allows to establish that the load and the results obtained in the studies, are acceptable to continue receiving alimony.

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Family interrelation regime: the new concept of visiting regimes.

When separation occurs between two parents, or if there was never a coexisting relationship at all, there is always the question or doubt about which parent will have the custody of the underage children. The ideal, always, is to reach an agreement between both parents when the separation is going to take place, since the friction generated by situations like these only causes harm to the children themselves; however, in many cases, there is not such agreement because the separation did not occur in good terms, and both parents want to exercise custody, so the situation becomes a war of power and pride between parents.

In the absence of a voluntary agreement between parents, the best option would be to look for an arrangement through an attorney, if no arrangement is subscribed, a Family Judge will determine both the aspects related to the custody, upbringing and education of minors, as well as the interrelation regimebetween the minors and the parent who does not have custody.

Interrelation right between minors and parents

The family interrelation regimen is not a right that belongs only to parents, but also a right that the minor has of spending time with both parents. This is regulated both in our legal system, and in different international instruments aimed at protecting the rights of minors, such as the Convention on the Rights of the Child, the Convention on the Civil Aspects of International Child Abduction, and the Inter-American Convention on the International Return of Children.

The right to a family interrelation regimen, or a visiting regime, as it was previously known, is conceived as an ideal way to strengthen the affection and the relationship between parents and children, since in very few cases is it possible to establish shared custody, due to the multiple requirements that must be met for this to be possible. The family interrelation regime aims to maintain the family union in circumstances where there’s deterioration in the relationship between the parents, since a separation or a divorce should not affect the relationship that the parents have with their children.

It is important to remember the right that minors have to interact with both parents, as well as with their respective families. When establishing a regime of family interrelation, whether agreed between the parties or set by a Court Authority, the best interest of the minor must always be taken into account.

But there are cases in which an interrelation regime is not convenient, due to a previous case of domestic violence or a dangerous habit of the parent that could put at risk the physical and emotional wellbeing of the child. When the physical and emotional health of the child is at risk, the right of the parent to an interrelation yields to the imminent danger that the minor may face, since in this, as in all judicial processes where minors are involved, the Judge must always seek to respect the best interest of the children, due to their vulnerability.

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