Much is often said about the termination of an employment contract without employer liability when the employee breaches their obligations or commits serious misconduct. However, Costa Rican labor legislation also contemplates the employee’s right to terminate the employment relationship when the employer fails to comply with its obligations.
The possibility for an employee to terminate the employment relationship with employer liability is regulated under Article 83 of the Labor Code.
The following constitute just causes that entitle the employee to terminate the employment contract:
a. When the employer fails to pay the employee the full salary due, at the agreed or customary time and place, without prejudice to deductions authorized by law;
b. When the employer engages, during the course of employment, in acts lacking probity or honesty, behaves in a manner contrary to morality, or resorts to insults, slander, or physical aggression against the employee;
c. When an employer’s dependent or a person residing in the employer’s household, with the employer’s express or tacit authorization, commits any of the acts described in the preceding paragraph against the employee;
d. When the employer, directly or through family members or dependents, maliciously causes material damage to the employee’s work tools or equipment;
e. When the employer or their representative in charge of directing the work engages in insults, slander, or physical aggression against the employee outside the workplace and outside working hours, provided that such acts were not provoked and render coexistence and harmonious performance of the contract impossible;
f. When the employer, a member of their family, their representative in charge of directing the work, or another employee is affected by a contagious disease, provided that the employee must remain in immediate contact with such person;
g. When there is a serious danger to the safety or health of the employee or their family, whether due to unhygienic conditions at the workplace, excessive unhealthiness of the region, or the employer’s failure to comply with legally mandated safety and prevention measures;
h. When the employer, through inexcusable imprudence or negligence, compromises the safety of the workplace or of the persons present therein;
i. When the employer violates any of the prohibitions contained in Article 70 of the Labor Code;
j. When the employer commits any other serious breach of the obligations imposed by the employment contract;
k. When the employer engages in discriminatory acts against an employee living with HIV. The rule contained in the final paragraph of Article 81 of the Labor Code also applies in favor of employees.
In addition to the foregoing grounds, another situation may be added: when the employer unilaterally modifies any essential element of the employment contract, a situation known as abusive ius variandi.
It is important to note that, through jurisprudential development, Costa Rican courts have established that, in accordance with the principle of good faith, the employee’s right to terminate the employment relationship may not be exercised immediately. Instead, it requires the exhaustion of the conciliation process, meaning that the employee must inform the employer of their intention to terminate the employment contract if the breach persists, thereby granting the employer an opportunity to correct or remedy the non-compliance.
In this regard, the Second Chamber of the Supreme Court of Justice, in decision No. 934-2007, issued at 2:50 p.m. on December 4, 2007, stated:
“On the other hand, regardless of the seriousness of the alleged breach or any of the other grounds considered by the claimant to terminate the employment contract with employer liability, it was fair and reasonable that, prior to bringing the relationship to an end, the employee should have informed the employer of the irregularities which, in his view, infringed his labor rights, and that he should have warned that, should the situation not be resolved, he would terminate the employment contract. It is a principle of labor legislation, set forth in Article 19 of the Labor Code and which the courts may not disregard, that employment contracts bind not only as to what is expressly stated therein, but also as to the consequences derived therefrom, in accordance with good faith, equity, custom, usage, or the law. For this reason, this jurisdiction has repeatedly held, in application of that provision, that an employee may not abruptly terminate the employment contract due to any employer breach without first granting the employer the obligatory opportunity to make the pertinent corrections. In other words, it is not the mere breach by the employer that entitles the employee to terminate the employment contract, but rather that, before leaving their employment, the employee must carry out the corresponding steps before the employer so that the latter may correct or remedy the grievance that infringes the employee’s rights. Only after the employer insists on maintaining a position that is harmful to those rights does the employee acquire the authority to rescind the contract without liability on their part.”
Regarding this issue, it should be noted that judicial criteria may evolve over time, particularly when the composition of the courts changes. Although this criterion currently remains in force, it does so by a divided vote of three to two justices.
An example of this is decision No. 2151-2025, issued at 2:41 p.m. on July 9, 2025, in which Justices Sánchez Rodríguez and Varela Araya expressed the following dissent:
“We disagree with the position of the majority of this Chamber regarding the obligation imposed on the employee to warn the employer to comply with its obligations before terminating the employment contract with employer liability. We consider that there is no provision in our legal system requiring employees to exhaust conciliation mechanisms before validly terminating the employment relationship with employer liability.”
As for the time limit available to employees to terminate the employment contract with employer liability, it is six months, in accordance with Article 416 of the Labor Code, which provides:
Article 416. The rights and actions of employees to terminate their employment contracts for just cause expire after six months, counted from the moment the employer gave rise to the cause for termination, or from the moment the employee became aware of such cause.
In this regard, a recent decision of the Second Chamber of the Supreme Court of Justice confirmed this limitation period in cases of abusive ius variandi:
“Likewise, the evidence establishes that the change in working hours was justified by valid functional and budgetary reasons, namely, to reduce excessive overtime payments. In exchange, compensation was granted, as the claimant has received, since October 2016, an additional 20% for ‘variation of working hours,’ which has been paid regularly and without objection for years. This generates tacit acceptance of the variation, in accordance with Article 416 of the Labor Code, which establishes that employees’ rights and actions to terminate employment contracts for just cause (due to abusive ius variandi) expire after six months.” (Decision No. 1783-2025, issued at 3:02 p.m. on June 11, 2025, Second Chamber of the Supreme Court of Justice).
Therefore, although the requirement to exhaust conciliation mechanisms prior to terminating the employment contract with employer liability remains a debatable issue and may evolve in the future depending on the composition of the court deciding the case, if such termination is pursued, it must be exercised within the six-month statutory period.
At Bufete Godínez & Asociados, we are a law firm specialized in Labor Law in Costa Rica, focused on corporate advisory services and comprehensive labour risk management. Our team of labour lawyers advises national and multinational companies on regulatory compliance, disciplinary processes, terminations, collective bargaining, internal policy design, prevention of contingencies, and legal representation in judicial and administrative proceedings.
If you are looking for a labor law specialist in Costa Rica for strategic support, up-to-date criteria, and practical solutions, we can help. Click here to obtain more information and schedule a consultation with our experts.
About the Autor