| Update Applicable to: | Effective Date |
| All Employers in Puerto Rico | See Details Below |
What happened?
On June 26, 2025, the Puerto Rico Supreme Court issued a decision in Méndez Ruiz v. Techno Plastics Industries, Inc., reaffirming that employers must have just cause to terminate employees under the island’s unjust dismissal law (Act No. 80 of 1976).
Overview:
The Supreme Court of Puerto Rico reaffirmed that employers must have just cause employees to terminate or else pay severance under the island’s Unjust Dismissal Law (Act No. 80 of 1976).
Compliance reminders for employers in Puerto Rico:
- Puerto Rico does not recognize at-will employment.
- Employers must have documented legitimate reasons for termination.
- If no just cause is proven, employers are liable for severance under Law 80.
Additional Information:
What Happened: An employee who had suffered a workplace injury was reinstated and worked for over two years while continuing treatment. She was later terminated while on a medically recommended rest period. The employer claimed the 12-month job reservation period under Puerto Rico’s Workers’ Compensation Act had expired and her absences were no longer protected.
Supreme Court Decision: The Court ruled that expiration of the 12-month reserve period does not justify termination if the employee has already returned to work and been reinstated. Because the employer failed to provide another valid reason for dismissal, the termination was deemed unjust under Law 80.
The Court also clarified that:
- A relapse after the reserve period does not justify termination if the employee had been actively working.
- The case differs from prior rulings where employees were never reinstated before the reserve period expired.
Source References
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