Employer substitution and its regulation in Nicaragua
During the work relationship, workers may feel threatened by different situations and factors that generate uncertainties in the work environment. One of these factors may be the “employer substitution” figure. In this article we are going to explain what employer substitution and its regulation consists of in Nicaragua.
In general terms, employer substitution consists of the change, substitution or replacement of the employer, allowing the validity of employment contracts to be maintained in the event of a change or substitution of the employer. In addition, it has the benefit of not requiring the modification of the terms and conditions of the employment contracts in force at the time of the change of employer.
Along the same lines, the Nicaraguan Labour Code states: “Article 11. The substitution of the employer does not affect labor relations. The substituted employer shall be jointly and severally liable with the new employer, up to a term of six months, for the obligations derived from the labor relations and the law, born before the substitution date, once the work is concluded, only the responsibility of the new employer shall subsist”. From its part, the figure has been also recognized and addressed in SENTENCE No.: 08/2015 of January nineteen of two thousand and fifteen of the NATIONAL LABOR COURT OF APPEAL.
Consequently, the employer substitution does not have any effect on the employment contracts signed with the former employer, therefore, these will continue to have full validity and application as if there had been no substitution.
In conclusion, employer substitution should only involve informing the employee that, from that moment on, the ownership of the company changes. Likewise, the substitute employer must respect the terms and conditions established in the labor contracts, Internal Regulations or any internal policy of the substituted employer towards the workers.
Valeska Fonseca Torrez
Associate
García & Bodán
Nicaragua