As we have previously discussed, the Puerto Rico Department of Labor (PR DOL) has recently published the first edition of its Guidelines on the Interpretation of Puerto Rico's Employment Legislation (Guidelines), which includes the PR DOL's official statutory interpretation of nearly all of Puerto Rico's employment laws. The over 200-page Guidelines are divided into 15 chapters and cover a wide range of statutes. This Insight is the first in a series that will provide a chapter-by-chapter analysis of the most important topics addressed in the Guidelines, including an interpretation of key provisions of the Puerto Rico Labor Transformation and Flexibility Act, Act No. 4 of January 26, 2017 ("Act 4-2017" or "LTFA"), which made substantial changes to virtually all existing employment laws in Puerto Rico, including those governing unjustified dismissal, wage-and-hour, vacation and sick leave, unemployment, lactation leave, employment discrimination and some employee benefits.
Chapter 1 - Principles of Interpretation of Labor Legislation
The PR DOL recognizes in this chapter the LTFA's intention to overturn the PR Supreme Court's long-standing position that any questions regarding an employment statute's interpretation should be resolved in the employee's favor. The PR DOL explains that employment statutes in PR should instead be subject to the general rules of interpretation applicable to all PR statutes set forth in Article 14 of the PR Civil Code. This article provides, "[w]hen a law is clear and free from all ambiguity, the letter of the same shall not be disregarded, under the pretext of fulfilling the spirit thereof." P.R. Laws ann. tit. 31, §14. It is yet to be seen whether courts will follow the PR DOL's guidelines in this regard.
The PR DOL also recognizes the LTFA's position allowing employers to exercise the right to interpret their own rules and policies. To reserve this right, employers must expressly do so in their employment policies, in writing. The Guidelines explain that in such cases, courts shall not substitute their own interpretation for the employer's as long as the employer's is a possible and reasonable interpretation. This recognition benefits employers.
Chapter 2 - Grandfather Clause
The PR DOL here discusses Article 1.2 of the LFTA, which provides that employees hired prior to January 26, 2017 "shall continue to enjoy the same rights and benefits they enjoyed before [said date], as expressly provided in the...