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21 March 2001
The relationship between employee and employer is regulated by a variety of laws and regulatory instruments, specifically:
Applicable regulations tend to favour the employee. If there is doubt about a factual or legal situation, the issue will usually be decided in favour of the employee. Real and actual working terms and conditions will usually overrule any agreed written terms and conditions.
In practice, internal work regulations (prepared by the employer, and registered and approved by the Ministry of Labour and Social Security) constitute the main regulatory instrument. The regulations incorporate terms and conditions that relate to almost all the issues of labour relationships. They are mandatorily applied to companies employing large numbers of employees.
The following are the main topics covered by law, some of which are described in the internal work regulations in more detail.
Every employee of a company must enter into an employment agreement which contains the specific clauses and provisions regulating the provision of services.
Agreements may be for a definite or indefinite term. In every contract that is for an indefinite term, there will be a probationary
period of at least three months (although a shorter period may be agreed). During
this period, and without prior warning, either party may terminate the agreement.
Salaries cannot be lower than the government established minimum, determined according to diferent employee categories. The Minimum Wage Decree is published in the official government newspaper (La Gaceta). Employees are usually paid on a weekly, bi-weekly or monthly basis.
All employees are entitled to a minimum of two weeks' holiday each year, after being in employment for 50 weeks. In the event of termination of the employment agreement before the employee has worked for 50 weeks, he/she will be entitled to at least one day's vacation for each complete month worked, which must be paid immediately. The employer may change the provision of two weeks to a system that awards holiday according to the time worked by the employees, or any other system that gives greater benefits to the employee.
The employer can dictate the time of year when an employee can take holidays, but this must be done within 15 weeks of the 50-week employment mark being reached.
Employees will normally take an uninterrupted holiday period. It may be divided into two periods, provided there is provison for such in the employment agreement. Vacations cannot be accumulated, except where the employee carries out technical tasks of a confidential nature (or other similar tasks) which makes replacement of the employee difficult.
Employees are entitled to an annual Christmas bonus, equal to one-twelfth of the ordinary and extraordinary salary received in the previous 12 months (prior to December 31) or lesser time worked. The bonus will be given within the first 20 days of December. If the employment agreement has been terminated, the bonus will be paid proportionally and immediately.
Sexual harassment or persecution in the workplace is prohibited and strongly penalized. 'Harassment' is defined as any type of repeated sexual conduct that is unsolicited by the person receiving it, which results in a detrimental effect on the employee's:
Conduct may also be considered to be sexual harassment where it has occurred only once, but the victim has been affected in any of the above ways.
Any person who has claimed to be a victim of sexual harassment or who has appeared as a witness for the victim should not be subject to any detrimental change in his/her employment. However, any employee who makes a false claim of harassment may be charged with defamation or slander (where the conduct corresponds in nature), as provided for in the Penal Code.
Any person filing a claim for sexual harassment can only be dismissed for just cause by seriously failing to perform the duties contained within the employment agreement (as per Article 81 of the Work Code). If such a situation should occur, the employer must handle the dismissal in front of an employment tribunal. The onus of proof rests on the employer, who must prove that the fault exists.
Punishable conduct committed by an employee may be dealt with by the following disciplinary measures:
These penalties do not have to be applied strictly in the order in which they
appear above, but rather in keeping with the seriousness of the fault and on
a case-by-case basis.
Verbal or written warnings must be imposed within eight days of the date on which the punishable conduct occurred or when the employer learnt of the conduct. Suspension or dismissal must be imposed within one month of the day on which the conduct occurred or when the employer representatives became aware of it.
The Labour Code states that the following are examples of employee conduct that is just cause for the immediate termination of an employment contract, with no liability for the employer:
After the first three months of employment, both employee and employer must
give written notice to the other party prior to terminating the working relationship
(unless termination is because of just cause). The maximum notice that must be given
(or paid as indemnification) is one month.
If the employer terminates the working relationship without just cause within the first three months, the employer must pay severance to the employee commensurate with the period of employment. Severance is generally equivalent to 22 days of salary per year, up to a maximum of eight years.
For further information on this topic please contact Jorge Arce Lara at Bufete Zurcher Montoya & Zurcher by telephone (+506 222 6633) or by fax (+506 221 9127) or by e-mail (email@example.com).
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