San José, Costa Rica, since 1956

Unemployed Face Uphill Battle

Jeremy Barquero was dumbfounded when his employer for the past two years told him they were closing the office where he worked.

“At the end of the day, they gathered us together and told us they were closing down. Some of us were told we no longer had our jobs,” said the 25-year-old San José native. “It was very hard to believe. I had plans to make my career there.”

Barquero lost his job as bank clerk last November after HSBC decided to close down its branch office in the southern San José suburb of Desamparados. Since then, a job hunt has been Barquero’s 9-to-5. He has sent his résumé to more than 20 companies. So far, he has obtained only two interviews and no offers.

His case is becoming more typical in Costa Rica as the economic downturn cuts further into companies’ earnings, forcing a number of businesses to shutter their operations over the past two months.

Barquero said that of the 10 employees at the Desamparados branch of HSBC, five were relocated to other branches and the other five were let go.

The bank paid him about $1,800 – three months salary – as compensation for laying him off. In this, Barquero could be considered one of the lucky ones.

Costa Rican labor laws oblige employers to provide severance of at least one month’s salary for each year worked, up to a maximum of eight years.

At least two companies so far this quarter, however, have suddenly closed their operations, leaving their workforce on the street without any type of compensation.

Sábila Industrial S.A., the owner of an aloe plant located in Liberia, in the northwestern province of Guanacaste, that processed the aloe for medicinal and cosmetic products, shut its doors late in January, leaving about 143 employees out of work overnight.

Judicial Branch spokeswoman Andrea Marín said on Tuesday that eight former Sábila Industrial employees had filed lawsuits against the company with the

Labor Court

last week.

On Wednesday, Labor Vice Minister Eugenio Solano, who has been contacted by the legal representatives of the aloe processing company, said the company attributed its closing to the current financial crisis.

Since last Friday, the

Labor Court

froze close to ¢2 million (about $3,667) in the company’s bank account and seized plant machinery and computer equipment.

The managers of the Liberia plant fled the country, Solano said. In the absence of management, Solano has scheduled meetings with the company’s lawyer later this week in order to negotiate employee compensation.

If an agreement cannot be reached, he said, the seized goods and funds would serve to pay the employees the compensation required by law.

“That process could take up to a year,” Solano said. “But at least the workers know they’ll get paid what they are owed, plus interest.”

According to the Costa Rica’s Social Security System (Caja) office in Liberia, Sábila Industrial has been registered since 1992 and operating in zona franca(free zone) territory, where it receives tax breaks.

Annie Rivas, a security guard at the plant for six and a half months, said the company had given letters to all of its employees on Jan. 28 informing them the plant was going bankrupt.

“The next day they’re gone,” said Rivas, from the Guanacaste town of Bagaces. “The majority of the employees here were single moms.”

In addition, the company failed to pay all of the employees any type of compensation, and withheld pay for the last 15 days worked, the Labor Ministry said.

Rivas added that Seguridad Sigma, a company that provides security for the defunct, U.S.-owned processing plant, was paid for an additional 15 days of service and nothing more.

“Things are very difficult in Liberia,” Rivas said. “A lot of people are looking for work nowadays.”

The Sábila Industrial case followed other sudden closures that for many struck closer to home.

Two weeks ago, more than 120 employees from Domino’s Pizza were left jobless after the owners abruptly closed down their nine San José area establishments, allegedly using a fabricated health hazard as an excuse to evacuate the premises so they could empty the locales.

“It was Friday, January 30, when (the managers) told us we were closing at 6 in the evening, because supposedly at the production plant where they make the dough they found a bacteria,” said Henry Acuña, 31, who delivered pizzas from the Domino’s in the western suburb Escazú on and off for four years.

“The next day, we realized they had taken out all the equipment. They left the country like cowards and left us jobless,” Acuña said.

Since then, employees and a mediator from Grupo de Mozzarella and Senderos de Poás, owners of the Domino’s franchise in Costa Rica, met and negotiated a compensation package that will be disbursed in three payments starting next week, said Manuel de Freitas, a contracted negotiator acting the owners’ spokesman.

“We are responsible for resolving and rectifying certain mistakes that occurred,” de Freitas said.

The Domino’s negotiator attributed the closures to a 40 percent decrease in sales over the last seven to eight months, and the owners’ inability to raise funds to save the franchise.

While Costa Rica does not offer unemployment assistance, President Oscar Arias’ new economic protection plan will extend the period of public health care coverage from three to six months for jobless citizens.

For the former bank employee, Barquero, times are tight for him, his mother and brother, with whom he lives, since his layoff.

“Some type of unemployment aid would make things easier for us,” he said.

The San JoséMunicipality in 2007 set up the Bolsa de Empleo, a job bank that assists the unemployed by matching them with companies interested in hiring. Except, according to the office’s manager Viviana Sánchez, the amount of job offers has been drying up. About 140 would-be workers are still waiting for a match. Sánchez said the job bank sees as many as 40 job-seekers daily at their offices, which are open from 8 to 11 a.m.

Another service available to people seeking work nationwide is offered online by the Costa Rican-American Chamber of Commerce (AMCHAM).

María Eugenia Mesem, manager of the online job bank, said between January and February the chamber has received more than 50 résumés from local and U.S. candidates interested in finding a job in Costa Rica. The web site,, provides a list of member companies that might need employees down the road.

“We act as a link between the job seekers and the companies,” explained Mesem, who said the majority of the résumés received are from the United States. “After we sent our member companies the résumés, they are the ones who contact the potential employees directly.”

People who are interested in being considered for positions across Costa Rica should send their résumés to,


Alarming Numbers

While the unemployment rate for Costa Rica in 2007 was 4.6 percent, and reached 4.9 percent for 2008, Eric Vargas, strategy director at the financial advising firm Aldesa, predicts that the unemployment rate for 2009 may reach 8 percent as soon as July.

Luis Chavarría, president of the Social Security Worker’s Union (UNDECA), said that approximately 20,000 to 25,000 people lost their jobs in Costa Rica from November of 2008 to January of 2009 (TT, Feb. 6.)

–Vanessa Garnica


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