10 of April, 2025

All companies have to face a labor lawsuit at some point. The degree of preparedness to tackle them can vary greatly, but there are many ways to improve your company’s capacity to respond to these situations before they occur.

Even with good practices, attractive benefits, and concern for the quality of life of employees, companies will always run the risk of receiving a labor lawsuit.

On the other hand, if they are bad organizations that constantly violate the rights of their employees, they will surely know a lot about complaints and lawsuits.

Labor lawsuits that are not properly managed can lead to various consequences, such as the closure of the company, economic losses, and the loss of customer loyalty.

Therefore, it’s important that the organization is prepared for any eventuality that may arise with employees.

Most common labor lawsuits

Most of the legal actions that lead to a lawsuit are related to work. These can come in many different forms and at any time, but let’s focus on the most common types of labor lawsuits you might encounter.

Labor lawsuit for dismissal

If the worker does not accept the dismissal, they have a period of 20 business days to file a conciliation slip in the Labor Court.

If an agreement is not reached in the SMAC, then it’s necessary to file the corresponding labor lawsuit.

For unpaid overtime

This overtime claim is raised in the case of the worker having employed more than the maximum day established in the collective agreement or applicable employment contract and no agreement has been reached.

To initiate this judicial process, the employee will file a claim for compensation for unpaid overtime with the conciliation of the amount and, in the case that an agreement has not been reached, a lawsuit against the employer in the labor courts.

Lawsuit for workplace and/or sexual harassment

Employees who are victims of workplace harassment or serious discrimination can request in the Labor Court the termination of their employment contract and demand additional financial compensation in respect of damages.

Change in professional category

In this case, it’s about salary differences that the employee should have had for the functions really performed being superior.

The worker may have a claim for professional classification when the employer assigns functions superior to those performed by members of the same professional group and, therefore, remunerated according to the collective agreement.

Labor lawsuit for challenging sanctions and salary

The worker has 20 business days to challenge the sanction, being able to do so through prior conciliation (SMAC) and subsequent lawsuit before the courts, if an agreement is not reached.

Significant modification of working conditions

The employer can modify the working conditions, including the working day, time distribution and schedule, work regime, work time restrictions and performance systems.

The worker must agree with these changes or otherwise, has 20 days to challenge the decision.

How to protect company interests in the face of a labor lawsuit

Complying with the law and taking necessary measures when dismissing an employee is neither an easy nor simple task. It requires setting clear objectives, defining the reasons for dismissal, communicating with the person involved and their union representative appropriately and making sure that all legal procedures are correctly followed.

In the event that a company confronts a legal problem, it must seek out a qualified lawyer promptly. Also, bear in mind an employee cannot be fired for filing a suit against the company.

A company can and should act to defend itself against a labor lawsuit or go to arbitration if the matter has not been resolved.

Thus, the first step to handle a labor lawsuit will be to gather all the documentation that will support its defense:

Certifications accrediting that procedures have been adjusted to current legality: a solid employment record is the basis for demonstrating your employment record and income. It should contain:

1) Contracts.

2) Wage proofs.

3) Proofs of social security contributions and responsibilities.

4) Issued wages or income.

5) Personal data and certifications.

6) Payroll receipts.

7) Attendance records.

8) Administrative records.

9) Employer’s quotes.

Evidence that verifies and confirms the reasons justifying the end of the employment contract.

Once the labor lawsuit is resolved, carefully examine the operation of the company and its working environment.

Review the reasons for the lawsuit to take necessary measures to prevent its repetition. Consider your business in the long term.

Even if at no time you have done anything wrong, it’s worth making some adjustments to minimize all kinds of risks.

How to respond to a labor lawsuit

When a labor lawsuit is filed, the employer usually has a couple of options at its disposal. The first option is to accept the employee’s lawsuit. In this case, if it’s accepted by the court, the claim will be accepted and the employee will receive the corresponding compensation.

There’s another option: to reject the lawsuit and present evidence in your favor. A notification is sent to the complainant with the response and evidence. The worker will have 10 days to comment on the evidence or offer others, after which an arbitrator or judge will make a decision.

Manage labor lawsuits more efficiently

In case of having to face a labor lawsuit, it’s best to be informed. For that, it’s vital to have tools that allow having all the documentation that backs your company.

To have all the evidence at hand, it’s necessary to digitalize employee information, contracts, and other aspects related to human resources management. And this is precisely what the human resource management software offers. Request a free demo for 14 days.

Customer-oriented, both internally and externally, specializing in the definition and implementation of HR policies, as well as talent management, recruitment, and retention. Strong leadership, communication, negotiation, organization, and team coordination skills. Over 12 years of experience in Human Resources.

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iriserrador

HR Content Specialist

What to do in the face of a labor lawsuit