Saturday, August 18, 2018

Expert warns of outmigration if Puerto Rico becomes at-will-employment jurisdiction

By on May 31, 2018

SAN JUAN – The version of the Puerto Rico Senate bill that would repeal Act 80, or the wrongful termination law, that the House appears to be inclined to approve, would virtually create a subset of workers without any labor protections.

The version of the bill passed by the Senate Wednesday evening would strip newly hired individuals and created companies from the benefits of Act 80, which ensures that workers who were wrongfully dismissed receive a severance payment among other stipulations. These new workers would not have a right to compensation if fired from their jobs.

Without Act 80, the island becomes an at-will-employment jurisdiction, whereby an employee can be dismissed by an employer for any reason, or without having to establish “just cause” for termination, and without warning.

The president of the Association of Labor Relations Practitioners of Puerto Rico, Natalia Colón, warned that the legislation would promote outmigration because many individuals would opt to work stateside for more money even if the state is an at-will employment jurisdiction. “Many workers will rather make more money even they can get fired easily,” she said.

However, she also warned that many courts have already established causes of actions against employers brought by employees working in states with the at-will employment doctrine.

For instance, she said, a worker can sue the employer if the firing was in violation of their employment agreement.

An employee can also sue for damages if the cause for the firing constitutes a violation of public policy. For instance, Colón said if a company fires a worker to hire a new one, who would be exempt from Act 80 protections, “would be a violation of public policy and there would be a cause of action.”

Workers could have a cause of action if fired as in an “act of bad faith.” For instance, if a worker is fired from the job five months before being entitled to obtain retirement benefits. “That would be a capricious and arbitrary act by the employer,” she said.

Employees in at-will jurisdictions are also protected by federal laws against job discrimination.

Asked if she believes Puerto Rico’s economy will grow as a result of the repeal of Act 80, Colón said that would be accounting for only one factor. She noted that most employers have cited the high cost of energy and the slow permitting process as the main impediments to doing in business in Puerto Rico. “Nowhere do they say it’s the labor factor,” she added.

House Speaker Carlos Méndez has said he plans to hold hearings next week on the repeal of Act 80 and that many representatives are inclined to approve the Senate version of the bill.

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