Puerto Rico Law 80- The Wrongful Discharge Act

Firing an employee in Puerto Rico for misconduct has legal consequences.  The discharge may be deemed wrongful, discriminatory, retaliatory or in violation of some other law. You need to consider both sets of employment laws – Puerto Rico and  federal legislation. Risk is considerable and in some cases  may require job reinstatement. Before you discharge an individual, reflect on the following issues (and seriously consider consulting with an employment attorney before making any decision).  This self-audit may avoid  future wrongful discharge claims. First, a primer on  Puerto Rico Law 80 –  wrongful discharge act (Act no. 80 of May 30, 1976).

Puerto Rico Law 80 and employment contracts

While there is no employment-at-will in Puerto Rico, employers can  lawfully hire workers for temporary, fixed or indefinite terms. Fixed terms will cease either by mutual consent, at the expiration of the stipulated period or as per provisions of the contract.

Employees hired for an undetermined period are subject to the provisions of Puerto Rico Law 80.  The Act protects employees from being discharged without cause after their probationary period expires; period that ranges from  nine to twelve months (the latter for  exempt employees).  Law 80 provides the guidelines for determining just cause.

Broadly,  just cause can imply any number of situations such as:  having an employee engaging in a pattern of improper or disorderly conduct; failing to work in an efficient manner, or working belatedly and negligently, or in violation of the standards of quality of the product produced or handled by the establishment;  repeatedly violating the reasonable rules established for the operation of the establishment, provided a written copy of the rules had been given to the employee; a full, temporary or partial closure of the operations of the company; reorganizations, reductions in work force resulting from lower production, sales and profits.  Puerto Rico Law 80 disfavors termination for isolated incidents unless they endanger the operation.

Additional Considerations

Why are you are terminating the worker? If it’s for disciplinary reasons or violation of some policy, ask yourself:

  1. Can you prove that the act was committed by the worker?
  2. Is the disciplinary measure fair (and consistently applied to others)?
  3. Regardless of (1) and (2) is  the worker  protected by a specific law such as age, sex, disability, workers compensation, pregnancy, color, political views, religion, retaliation and if he/she is,  can you show  that the condition protected plays no role in the decision to terminate?

Here are some key questions to address:

  • Is the applicable policy or rule breached in  written form?
  • Have you provided  the worker with a copy of the policy?
  • Do you have evidence of having provided a copy (such as a signed acknowledgment form)?
  • Is the violation contained within the rule or policy? What is the penalty if any?
  • Do you have a specific disciplinary process? Are you follow it?
  • How serious is the  breach of conduct? Is it a first offense? A discharge for a first offense is unjustified unless it’s of a serious nature and puts the business at risk.
  • Have you calculated the amount of the indemnity under Law 80 – Puerto Rico? It is aavisable to know what is your legal exposure under the law in case you are not able to prevail in a wrongful discharge claim.

If you are discharging a worker for performance, the process is similar. How clear were the objectives and goals? Were they reasonable? Can you show that the worker was aware of them?  Are they in written form?  Was the employee given ample opportunity and support to reach these goals?

Is the Worker protected by a specific law? In Puerto Rico, employers can discharge workers at will but must pay an indemnity if the discharge is without cause (Law 80  Puerto Rico). However the employer must be careful not to breach other employment laws that prohibit employment discharges for a specified reason. Example of these laws include firing a person for his/her age, color, gender, national origin, religious beliefs,  disability, retaliation and enjoying protected leaves.  While a  discharge for cause may be an adequate defense in many cases, a initial analysis of the applicability  of these laws is a wise precautionary measure. Typical issues you might consider include:

  • Is the worker of a foreign nationality, ‘minority’ or professes a particular religion?
  • Is the worker currently under a particular leave?
  • Is the worker older than most? Older than 40?
  • Is the worker the only female? Has she been harassed?
  • Is the worker disabled or perceived to be disabled?
  • Is the worker a victim or perceived to be a victim of domestic violence?
  • Is the worker currently under a protected leave such as pregnancy, Family-Medical, jury, military or workers compensation?
  • Is there any protected condition that the worker may invoke to sidetrack the case from a simple discharge to a major discrimination claim?

How are you conducting the termination?  Puerto Rico Act 80 does not specify how you should fire a worker but the manner in which you do so could bring additional risk if not handled properly.

For more information on act no. 80 of may 30, 1976 and other Puerto Rico employment laws, contact RA Fleming.