In Official Gazette La Gaceta No. 24 of February 8, 2024, law 10437 was published with the primary aim of providing protection – within the scope of employment – to individuals who report national or transnational acts of corruption, as well as to witnesses.
This protection extends to individuals working in both the public and private sectors.
An act of corruption is defined as when a public official or someone performing public functions directly or indirectly accepts bribes in exchange for performing or omitting any act in their official capacity. It also includes:
– Offering bribes.
– Acts to evade performing official duties.
– Fraudulently benefiting from or concealing assets resulting from such acts.
– Participation as author, instigator, or accomplice in such acts.
– Committing offenses or acts of corruption, or money laundering.
Reports can be made verbally or in writing, concerning incidents in both public and private domains. Retaliation in employment is defined as any act, direct or indirect, by an employer or their representatives, aimed at causing unjustified harm to the whistleblower, witnesses, or related third parties.
Acts such as suspension, dismissal, sanctions; demotion, unfavorable changes (duties, schedules, workplace, remuneration, etc.); restrictions or discrimination in promotions; negative evaluations of performance; coercion, intimidation, harassment, or isolation at work; discrimination or unfair treatment; early termination of fixed-term contracts, non-renewal of contracts, cancellation of permits or licenses; reputational, professional, financial, social, psychological, or physical harm; and generally any other form of retaliation against whistleblowers, witnesses, or relatives up to the fourth degree of consanguinity or affinity are prohibited.
To receive this special protection, the individual must have reported an act of corruption, whether actual or reasonably believed to have occurred.
Protected individuals include employees, former employees under any employment type (temporary, permanent, volunteer, consultant), applicants for positions aware of such acts, anonymously reporting individuals, and those intending to report provided they do so within a reasonable time determined by a judge. This protection also extends to coworkers.
This protection may cease only if the individual commits a serious labor offense or if there exists an objective cause related to organizational, economic, or technological aspects that prevent the employment relationship, subject to prior submission of a request for contractual cessation to the Labor Inspection.
Judicial procedures are expedited (Article 540 et seq. of the Labor Code), with the burden of proof on the employer to justify the objective cause of termination or any measure accused of discrimination under this law. Precautionary measures may include ceasing persecution, non-interference with the use of work tools, suspending administrative actions, temporary relocation, transfer, or exchange, reinstating the person to their position and employment conditions, or any other measures deemed appropriate.
Compensation is awarded for damages incurred. However, this does not absolve individuals from liability for their actions, whether committing labor offenses or making false accusations (libel, defamation, or slander). Legal assistance for those protected by this law is provided free of charge.
IN THE PRIVATE SECTOR: Establishing Procedures
Companies with over 50 employees must establish a suitable reporting channel, easily accessible and allowing for anonymous and electronic reporting. They must facilitate the submission of reports, periodically publicize information on reporting methods and follow-up, ensure confidentiality, and offer protection measures against potential employment retaliation.
Confidentiality is maintained during and after the reporting process, regardless of its outcome.
Employers found guilty of retaliating against whistleblowers for reporting acts of corruption face fines ranging from 1 to 100 base salaries if retaliation occurs internally or publicly reported, and from 100 to 1,000 base salaries if retaliation occurs against those reporting in a criminal proceeding. The judge determines the penalty based on the severity of the offense, circumstances of the retaliation, impact, recurrence, market position of the offender, negligence in remedying the act, and other factors.
LEGAL REFORMS:
Articles 540 (with an added paragraph 9), 404, and 545 of the Labor Code are amended to include the protections outlined in this law as discriminatory causes and subject to prior dismissal proceedings. Additional amendments to other laws were also made.
This law was enacted on January 29, 2024, with a 12-month period for regulation, and was published in the aforementioned La Gaceta.
Sylvia Bejarano Ramírez
Associate
Erick Brealey Bejarano
Associate
CENTRAL LAW in Costa Rica
