Extra-legal benefits: acquired right and expectation of right

In order to determine whether a benefit is an acquired right or not, it is essential to determine how it was granted.

Acquired rights are those that enter definitively and permanently in the patrimony of their holder. These refer to a consummated circumstance in which a previously alien property or a previously non-existent right becomes part of the patrimony of a person, providing him/her with a tangible advantage or benefit (res. 2765-97 of the Constitutional Chajmber

In relation to acquired rights, the Second Chamber of the Supreme Court of Justice has established the following:

“the acquired right does not admit uncertainty or eventuality; it is not an expectation, but rather the clear, certain and definite certainty, of a fully consolidated legal situation. The situation of certainty or firmness, generates for the right holder the guarantee of the administrative order to satisfy his needs, in the course of the service relationship that links them and, specifically, those whose effect is a certain patrimonial benefit... A right is understood as acquired, once the necessary and sufficient factual assumptions for its birth or acquisition have been fulfilled, in accordance with the law in force at the time they were fulfilled, so that, by virtue thereof, it has been immediately incorporated to the patrimony of the holder.” (res: 2001-00637, Second Chamber of the Supreme Court of Justice. San José, at ten hours and twenty minutes of October twenty-sixth, two thousand and one).

Therefore, in case the employer does not want a benefit to become an acquired right in the future, it is necessary to condition it to certain factual and temporal parameters from its granting and preferably in writing. In relation to the possibility of conditioning an extralegal right, the Second Chamber has established the following:

VI.- Based on what is stated in the preceding recital, for the Chamber no acquired right or consolidated legal situation has been violated to the detriment of the plaintiffs. It must be taken into consideration that one of the requirements, precisely, for the payment of the travel allowance, from the beginning of its recognition has been that the person is permanently assigned to work in places other than the territorial district of the seat of its functional center. In this sense, it should be understood in the decision of this Chamber number 331 of 10:30 a.m. on July 4, 2003, according to which: “The granting of the plus, then, is not given with definitive effects, but as long as the factual conditions that allowed its concession, which are duly regulated, are maintained. Consequently, if at any time the factual assumptions provided for in the norm are not met or are no longer met, the bonus cannot be granted. Consequently, it is not a permanent or definitive right, but depends on the fulfillment of the indispensable conditions that allow it to be granted”. As considered in the aforementioned antecedent, if the plaintiffs do not comply or fail to comply with that factual presupposition of the rule, they cannot derive the consequence provided therein, namely, the respective salary recognition.” (res: 2015-001260, Second Chamber of the Supreme Court of Justice. San José, at nine hours and thirty-five minutes of November eleventh, two thousand and fifteen).

Therefore, when conditioning it, the employer must foresee the possible scenarios in which it is no longer possible to give the benefit, being able to indicate, among other aspects, the following:

a. The temporary or factual reasons that justify the granting of the benefit.
b. That it is a benefit that is conditioned, for example, to economic, financial, organizational, productive, market, opportunity or convenience criteria.
c. That it is an extra-legal benefit, which the company has voluntarily decided to grant.
d. That it is a benefit that can be temporarily or indefinitely suspended, modified or eliminated at any time, by unilateral decision of the company.

In general, any extra-legal benefit can become an acquired right, if it is not conditioned from its creation. Conditioning a right or benefit during the term of the employment contract or when it has already been created and implemented without conditions, always entails a high risk of possible contingencies. In such cases the discussion will deal with acquired rights and the eventual nullity of any unilateral change regarding the conditions of the benefit and the unwaivability of the rights.

In the same way, the worker may also have an expectation of entitlement in those cases in which, although the enjoyment of the benefit has been conditioned to certain conditions from the beginning, the worker has never been repeatedly reminded of the possibility that the benefit could be suspended or eliminated over time. The aforementioned may be especially relevant in cases in which the worker has a high seniority and has enjoyed and known about the benefit for a long time. In these cases, it could eventually be argued that the employee's expectation can be consolidated by the continuous enjoyment and the employer's inertia to remind the employee that the benefit was subject to conditions.

- Elimination of a vested right

In the event that a benefit has not been conditioned since its granting so that an acquired right has been consolidated, it is not possible for the employer to eliminate it unilaterally for the considerations already indicated, so that the options to be implemented may be one of the following:

- Modification of the contract by mutual agreement that contemplates a partial settlement of benefits. In order to calculate the basis for the partial settlement, the loss caused would be taken into account. However, in the case of a modification by mutual agreement, it is necessary to have the employee's consent.
- Change of the benefit for a similar one. In order to apply the change, it would be necessary to have the employee's consent.
- Dismissal with employer's liability. If it is indispensable to apply the change and the employee is not willing to accept the modification or elimination of the benefit, even if there is an indemnity payment, then it is possible for the employer to proceed with the termination of the employment contract with employer's liability, which entails the payment of the full dismissal benefits.

In the event that the benefit was conditioned to the fulfillment of certain conditions and the company reserved the unilateral power to modify or eliminate it at any time, it may be unilaterally terminated by the employer.

Although it is not possible for the employer to unilaterally affect the enjoyment of an acquired right, in case it is not sustainable for objective reasons to continue with the recognition of a benefit, it is possible to introduce changes in the future, for new employees, but under certain conditions. In this sense, in order for the change to be applied to new employees not to be considered a discriminatory practice, there must be objective motivations (e.g. economic, financial, organizational, etc.) that are demonstrable and allow the change to be justified. This is especially important when, in the end, there will be people doing the same thing, with the same responsibilities, but with different benefits. Likewise, those reasons that support the decision to eliminate or modify a benefit for future hiring, are those that the company would eventually have to demonstrate in a lawsuit or administrative claim, in which the reasonableness of the decision taken is questioned and whether or not it is discriminatory in nature.

At Bufete Godínez y Asociados, we specialize in counseling and advising employers in labor and employment law. If you need any additional information, do not hesitate to contact us by clicking here.


About the Autor

Alejandro Godínez Tobón

Alejandro Godínez Tobón

Email: [email protected]
Phones +506 2289-5250 / +506 2289-5259
View author's full profile