el crispito

Let me be more concrete. A worker who feels they have been dealt with unjustly by their employer can file a complaint with conciliation and arbitration, which in turn schedules an appointment for a meeting between the employee and the employer, mediated by an arbitration lawyer. A document is generated by the conciliation and arbitration office, and that document is presented to the employer by the employee, or by someone else they send to deliver the document. The employer's presence at the meeting is entirely voluntary. That is, if the employer decides to simply not show up, there is no penalty for ignoring the arbitration notice.

If the employer decides to attend the meeting, she will be in the room with the employee and an arbitration lawyer. The employee presents his argument and the employer might answer with her own argument, all in front of the arbitration lawyer, who takes notes on what both parties say. The arbitration lawyer does not seem to perform any advocacy function for either side during the meeting, instead taking notes and basically facilitating the meeting of the two sides. If a second meeting is called for, the arbitration lawyer will help schedule that meeting. The employee can take his lawyer along to arbitration meetings; the employer take a lawyer or she can send a lawyer or other representative along in her stead.

If a monetary amount is in dispute (as it usually is), the employee will ask for an amount up to the maximum permitted by law. If the employer or her representative shows up for the meeting, they will usually offer the employee only a fraction of the reward he is due by law. They might be prepared to make this offer at the first hearing, or they can request time to consider the demands before responding to the offer. If a second meeting is requested, there is again no penalty for failure to appear on either side. It is, of course, a disadvantage for the employee to miss the arbitration meetings, but it really has no negative impact for the employer to skip out on them.

Whom Does Arbitration Benefit?

If the offers made to the employee in arbitration are so low and if the employer does not even have to show up, why do people go to arbitration?

First off, it takes a long time to get a case resolved through the courts. A lot of people do not have the resources available to them to wait for a resolution that way and need some kind of immediate financial solution for paying the next month's rent, buying food or keeping the lights burning. For this reason, arbitration, which gets the employee a meeting date in three or four days compared to the six to eight weeks it will take before the first date in a court case can be scheduled, is much more attractive to people that need cash fast.

People here see the court system as corrupt, bloated and just plain worthless. The courts as a system for allocating justice historically have not been that effective in doing anything meaningful for the average José, and in fact, they usually sacrifice him in exchange for bribes from those who are more rich or powerful. Arbitration has been promoted as some force of change for the common man, and people here seem to think it will be more effective than the court system that way.

I am suspicious of that. It seems to me that a lot of people here have fallen for some propaganda put forward, either by the government, business interests or both, which tells people that arbitration is a faster, less complicated way to get what they due when their rights have been violated. In reality, it seems to be a way to give jilted employees less while making them feel like they got more.

As we discussed last time, 90% of the court cases brought by employees against their employers (or former employers) are won, eventually, by the employee. Because the cases can take a long time to be resolved, and because the employer found guilty in court has to pay full daily wages to the employee for the entire period of time the case is in court, this puts the employer at a great disadvantage if cases go to court.

If a company fires an employee without cause, the law says that they are bound to provide her with severance as described in the previous entry. This amount is due on the day they let the employee go. However, the company can easily break the law and refuse to pay the employee severance upon letting them go, betting on the idea that they will pay less if the employee has to go through the legal channels to get their due. If the employer simply refuses to pay, the employee has two options for getting the money owed to them. They can (1) take the employer to court, or (2) to try and reach a settlement through Conciliación y Arbitraje.

If the employee has no savings nor a new job that can support her while the court case is being settled, she will most likely opt for arbitration because it can provide her with some money, sooner. Because arbitration does not involve any determination of the legal validity of the arguments on either side, neither employee nor employer is found guilty or not guilty. A compromise is made to which both sides agree, and it will be neither a full vindication for a victor nor a complete punishment for the vanquished. In short, nobody leaves entirely happy. On the other hand, as compared to settling the matter in court, which is an all-or-nothing proposition, both sides get a little of what they want.

Well, maybe. Like I said, the employer could choose to just not show up for the arbitration hearings. Then the employee has no further recourse but to go ahead and take the matter to court, if he wants to get the money he is due.

After Arbitration

To file through the court, the employee has to hire a lawyer, prepare and make copies of various documents, and wait for several months for the first official hearing. Before the case is taken before a judge, a meeting is scheduled between the employer and the employee (and in which the employee's lawyer is not permitted), where the employer can make an offer to the employee to resolve the matter, like a pre-trial settlement. If the offer made is the full amount allowed by law in the three different components - the indemnización, the prima vacacional and the prima antigüedad (see previous entry) - the court case is immediately dismissed and the employee paid off. This is the amount the employee should have been paid on the day she was fired, but instead it is being paid out several months later, with no interest or other compensation for the delay paid to the employee and no fine or penalty given to the employer.

Usually, the delay in receiving the three components of the severance payment to be rewarded is compensated to the employee by the payment of the salarios caídos, a full day's pay for every day between the date of the firing and the date the decision is handed down (if it is in favor of the employee). Yet if the employer offers the full amount of the three components in the pre-trial meeting, the employee does not get any salarios caídos, despite having to wait months to get the severance package.

Betting Odds

If the offer is less than the full amount legally outlined for the three items listed above, the employee can refuse the settlement and the case goes before a judge. From then on, if the case is decided for the employee, she gets the three items listed above as well as the salarios caídos. If it is decided for the employer, she gets nothing.

If the employee can pursue the matter through the court, she is more likely to get a better settlement. As we mentioned before, 90% of the cases taken to court are decided in favor of the employee. An offer made through arbitration is faster and can be obtained without having to prove ones case, but it will also be for considerably less money. The offer made to Shawn was only 50% of the indemnización, with no prima vacacional and no prima antigüedad. If the case goes to court, the employee might win nothing, but if statistics are any indication, there is only a 10% likelihood of losing.

Since the salarios caídos is based on the time between the date of firing and the date of the court decision, it can easily be much higher than the package of the indemnización, prima vacacional and prima antigüedad. Usually those amount to about 100 or so days of pay. Yet when two months are allowed to pass before the court case must be filed, and since it can take four months between filing and the first hearing date, that is already closer to 180 days. An average case might actually go on for about 7 months. Some will go on even longer. In many cases, the salarios caídos rewarded ends up being over several times the amount due in the severance package of the basic three components. With a 90% success rate, that makes going to court a pretty good bet for jilted employees who can wait it out.