Peru

A. Hiring of employees (Onboarding)

1. Mandatory employer requirements

According to Peruvian legislation, when employing an individual in Peru, employers must comply with formal obligations related to: (i) its own figure as employer, and (ii) the action of contracting employees.

a. Formal employer requirements:
 

It is important to establish a legal entity in Peru to hire an employee. In this regard, a company, an individual, consortium, among others, can be considered as an employer, according to Peruvian Regulation. Notwithstanding the above-mentioned, every employer must fulfill some formalities, in order to hire employees, such as:

• Tax registration: Since its necessary for the companies to identify themselves for tax purposes, it is mandatory for the employers to be registered in the Taxpayer Registry (RUC, per its acronym in Spanish). This registry allows the employer to execute all the tax procedures needed before the Tax Authority (SUNAT).
• Use of the Electronic payroll: Mandatory platform that the employer must use to report before the Tax Authority (SUNAT) the information about its employees, pensioners, service providers, personnel in training or third parties and beneficiaries. The platform has two components: the Labor Information Registry (T-Registro, in Spanish) and the Monthly Payment Payroll itself (PLAME, in Spanish).

b. Requirements regarding the employees:

The employer must follow the following guidelines to hire employees:

• Draft the employment contract: Peruvian legislation allows both written and verbal agreements. Nevertheless, only indefinite labor relationships can be settled by non-written agreements; fixed-term labor relationships must be established by written contracts. In addition, when establishing a fixed-term contract, it is mandatory to define the objective clause that sustains the temporal hiring.
• Registration of the employee before T-Registro (one of the modules of electronic payroll), within the first day of provision of services.
• Register the employee at the selected Private Pension System. The employee can choose between National Pension System (NPS) or the Private Pension System (PPS).
• Use the Electronic Payroll System to register employees and comply with their monthly payments.

2. Hiring checks (basic requirements)
 

a. T-Registro:
 

It is mandatory to register the employee’s registration within the first day of work, regardless of the type of contract and the number of days worked. Likewise, employees must find the physical or electronic record of registration that is made in the T-Registro on the business day following the start of the provision of services.

b. Pension newsletter:
 

The employer must give those employees not affiliated with a pension system who enter a workplace for the first time a copy of the “Information Bulletin” approved by Ministerial Resolution No. 226-2007-TR where they are informed about the characteristics of pension systems.

This document must be delivered to the employee within 5 business days of joining and they will have a period of 10 days from delivery to express in writing their willingness to join a system. Finally, the employee has 10 additional days to ratify or change the decision.

If the employee does not choose a system within the deadline, the employer can affiliate him to the adjudicator AFP that is under the provisions of article 6 of Supreme Decree 054-97-EF.

c. Withholding and payment of contributions to the Pension Regime:
 

It is the employer's obligation to make the withholding and the corresponding payment for contributions to the National Pension System (NPS) or the Private Pension System (PPS) of its employees.

When the employee enters the labor market for the first time, they must indicate whether they wish to register in the NPS or in the PPS. When the employees are already affiliated with the PPS, they must indicate to their new employer the AFP in which they are affiliated.

When an individual enters into an employment relationship and is not yet affiliated with a pension regime, the employer must ensure that the employee registers with the Pension System and chooses between the NPS or PPS within ten (10) calendar days from the start of the employment.

If the employee’s affiliation status cannot be verified through the Secure and Transparent Affiliation Platform (PAST), the employer or withholding agent is required to request a physical or electronic copy of the employee’s affiliation certificate.

d. Withholding and Payment of Contributions to the Pension Regime – Foreign employees

It is the employer’s obligation to withhold and pay the corresponding pension contributions to either the National Pension System (NPS) or the Private Pension System (PPS) for foreign employees who are not yet affiliated with a pension regime and who maintain a regular immigration status or are in the process of applying for refugee status.

Foreign employees who enter into an employment relationship must register with the Pension System and choose between the NPS or PPS within ten (10) calendar days from the start of the employment activity.

Once affiliated, the foreign employee must submit a physical or electronic copy of their affiliation certificate to the employer, as applicable, to enable the withholding and payment of the corresponding pension contributions. If the affiliation status cannot be verified, the employer or withholding agent is required to request the affiliation certificate.

Foreign employees covered by international social security agreements in force in Peru are exempt from mandatory affiliation.

e. Registration for Social Health Security (EsSalud)

The employer has the obligation to enroll its employees and their beneficiaries in the Social Health Security Contributory Regime. Affiliation is carried out by filling out employee data through the T-REGISTRO, information that is sent by SUNAT to ESSALUD.

f. Information about the job position
 

It is the employer's obligation to guarantee, timely and appropriately, training and training in health and safety in the center and workplace or specific function, as indicated below:

- At the time of hiring, whatever the modality or duration.
- During the performance of work.
- When changes occur in the job function or position or in technology

g. Medical examination
 

It is mandatory to perform a medical examination on employees once every two years; and it is optional to perform it at the end of the labor relationship. But, for employers that perform risky activities (such as mining, construction, electricity, etc.), it is mandatory to perform a medical examination of employees before, during, and at the end of the labor relationship.  The cost of the medical exam is fully assumed by the employer.

h. Criminal background check
 

Based on the provisions of the National Authority for the Protection of Personal Data (ANPD, per its acronym in Spanish), if information on criminal, police and judicial records is required, the employer must request it from the person holding the data, provided that the need for such information is justified. The information and the purpose of the treatment must be indicated.

Likewise, to avoid any contingency, it is advisable for applicants to request the Single Labor Certificate issued by the Ministry of Labor and Employment Promotion through the platform https://www.empleosperu.gob.pe/CertificadoUnicoLaboral/, which includes official information from the Peruvian State.

i. Reference and education checks
 

Employers must fulfill the updated educational status of their employees in the electronic form, following the guidelines established in the instructional booklet issued by the Ministry of Labor and Employment Promotion.

The document located at the link http://www.trabajo.gob.pe/tregistro_situacioneducativa contains the guidelines for individually or massively recording the information on the employee’s completed studies.

j. Trainings

The employer is obligated to train its new hires in Health and Safety at Work and Prevention of Sexual Harassment. These trainings are mandatory by law.

k. Contracting of Mandatory Life Insurance (Seguro de Vida Ley)

The employer is required to contract the mandatory life insurance (Seguro de Vida Ley) from the first day the employee begins work and is registered on the payroll.

This obligation applies to all employees in the private sector, regardless of the employment regime, industry, or type of activity.

The employer must register the insurance policy contract in the Virtual System of the Ministry of Labor.

l. Contracting Complementary Risk Work Insurance (SCTR)

The contracting of the Complementary Risk Work Insurance (SCTR) is mandatory for companies engaged in high-risk activities, as defined in Annex 5 of Supreme Decree No. 009-97-SA.

This insurance must be contracted for all employees at the worksite.

3. Types of labor contracts
 

Employees may enter into the following types of labor contracts:

a. Open-ended contracts
 

According to Peruvian legislation, the general rule for labor hiring is indefinite term contracts. Article 4° of Unique Orderly Text of Legal Decree 728, Law of Labor Productivity and Competitivity, settles that it is assumed that all labor relations are indefinite, unless there’s an objective cause that sustains a fixed-term labor relation. Note that open-ended contracts don’t need a written agreement to be formalized.

b. Fixed-term contracts
 

According to Peruvian legislation, fixed-term labor contracts are allowed but as an exception, to attend certain temporal justified needs of the employer. Article 53° (and following) of Unique Orderly Text of Legal Decree 728, Law of Labor Productivity and Competitivity, regulates the kinds of fixed-term contracts:

1. Start of new business activity contract: Attends the arising of the start of a new business activity. A new activity is understood to include both the start of productive activity and the subsequent installation or opening of new establishments or markets, as well as the start of new activities or the expansion of existing ones within the same company. The maximum duration of this contract is three years.
2. Market needs contract: Respond to temporary increases in production caused by substantial variations in market demand, even when these are routine tasks that are part of the company's normal activity and cannot be fulfilled with permanent personnel. The maximum duration of this contract is five years.
3. Business reconversion contract: Due to the replacement, expansion, or modification of the company's activities, and in general, any technological change in machinery, equipment, facilities, means of production, systems, methods, and production and administrative procedures. The maximum duration of this contract is two years.
4. Occasional activities contract: Attend temporary needs other than the usual activity of the workplace. The maximum duration of this contract is six months per year.
5. Substitution contract: Replace a permanent employee of the company whose employment relationship is suspended for any justified reason provided for in current legislation, or due to the effect of conventional provisions applicable in the workplace. The duration of this contract will depend on the circumstances.
6. Emergency contract: Cover the needs caused by unforeseen circumstances or force majeure, coinciding with the duration of the emergency. The duration of this contract will depend on the circumstances.
7. Specific task or service contract: Cover the needs of a previously established objective and a determined duration. Very specific contract that will adjust to specific and well-determined needs. The duration of this contract will depend on the circumstances.
8. Intermittent contract: Cover the needs of the company of activities that are permanent but discontinuous. The duration of this contract will depend on the circumstances.
9. Season contract: Cover the needs of the company or establishment's business, which are met only during certain times of the year and are subject to repetition in equivalent periods in each cycle depending on the nature of the productive activity. The duration of this contract will depend on the circumstances.

Note that all fixed-term contracts must be written and contain a clause describing the objective cause that justify its subscription; specially because temporal labor relations are the exception to the hiring rule. In case the objective cause is not duly described, the consequence is the voidance of the fixed-term contract and the establishment of an indefinite term labor relation.

Both open-ended contracts and fixed-term contracts generate the same labor benefits for the employees such as legal gratifications, compensation for length of services (CTS), paid time off (30 days) and profit sharing, when applicable. The key difference is that only employees with open-ended contracts may claim reinstatement in cases of arbitrary dismissal. Employees with fixed-term contracts may also be entitled to severance compensation, but they do not enjoy the same reinstatement protection unless the contract was fraudulently executed or the dismissal falls under nullity grounds.

c. Part time contracts
 

This contract is used when the workday is less than four daily hours on average during the week. In such cases, the employee is not entitled to certain statutory benefits, such as severance pay (CTS) or compensation for arbitrary dismissal.

However, part‑time employees are entitled to a minimum of six (6) working days of paid vacation per year, in accordance with ILO Convention No. 52. The contract and its extensions should necessarily be entered into in writing.

d. Remote work
 

Telework Law aims to regulate the modality of non-face-to-face work in public administration entities, institutions and private companies. Teleworking is a special modality for the provision of work applicable to employees subject to any type of labor regime, characterized mainly by the subordinate performing tasks without the physical presence of the employee.

The employer must grant the equipment and the Internet access service. It can be agreed that the teleworking employee provides their own equipment and internet access, which must be fully compensated by the employer, unless agreed otherwise. Compensation for the cost of internet access and electricity consumption must be assumed by the employer as long as teleworking is carried out at the employee’s home, unless agreed otherwise.

It is mandatory to sign a written agreement (included in the employment contract or in some additional document) in which the modalities and conditions of teleworking are regulated (total/partial, permanent/temporary). Also, the conditions to revenue the teleworking have to be listed in the agreement.

Finally, the employer must guarantee Health and Security condition for the teleworking activities.

e. Foreigners employment contracts

The employment of expatriates is subject to two statutory limitations. First, the proportion of expatriate employees shall not exceed 20% of the total local workforce listed on the employer’s payroll. Second, the aggregate remuneration of expatriate employees shall not exceed 30% of the total remuneration of local employees on the same payroll. Employers may seek exemption from these restrictions, in accordance with the grounds and procedures set forth by applicable law, such as:

• Specialized professional or technical personnel.
• Management or executive personnel.

The employment agreements must be entered in writing and for a maximum period of three years and are subject to renewal. The labor contract must be duly signed by both parties and registered at the Labor Ministry (the approval is automatic).

Additionally, there are other scenarios that are exempt from the aforementioned legislation, as these individuals are considered national personnel:

• Foreign personnel from a country that has a labor reciprocity or dual nationality agreement with Peru (e.g. Spain).
• Foreign personnel from a country comprehended in bilateral or multilateral agreements (e.g., Mercosur, CAN).
• Others as established by law.

In the cases mentioned above, being exempt from the Labor Immigration Law, the foreigners must be hired as Peruvian personnel.

It is worth mentioning that the hiring of foreign personnel (exempt or not) is subject to the acquisition of an enabling Immigration Status by the beneficiary citizen, which is obtained by following a migration procedure before the Immigration Authority.

4. Main employment obligations:
 

a. Probation period
 

For regular employees, the probation period is three months. For employees who have the qualification of “trust employees” (i.e., employees who work in direct contact with the employer, having access to confidential information), the probation period will be a maximum of six months.

And for those employees who have the qualification of “management employees” (i.e., employees acting on behalf of the company and representing it in front of the other employees) the probation period will be a maximum of 12 months.

Even though the probation period is mandatory by law, the extension to six or twelve months for special qualified position has to be settled in a contract clause.

b. Working Day / Workday

Peruvian legislation has established a maximum limit of 48 working hours per week. This has been settled in the Constitution, laws and regulations, and applies for regular employees whose working time can be supervised by the employer.

Nevertheless, it is also possible to exclude some employees from this 48-hour limit:

• Directive employees: Personnel whose functions has a relevant impact in the results of the Company and represent it before others (employees, authorities, among others).
• Unsupervised employees: Personnel whose development of functions cannot be supervised because of the nature of the activities performed.

It is important to mention that the personnel subjected to the 48-hour limit will receive overtime payment when they exceed their worktime; likewise, the personnel not subjected to the 48-hour limit won't receive overtime payment.

Non-compliance with this regulation qualifies as an infraction classified as very serious, and fines could be imposed with amounts that vary between PEN 14,070.50 up to PEN 281,035.50.

c. Annual Leave
 

According to Legal Decree 713, employees have thirty calendar days of paid time off (PTO). This benefit is acquired when the employee has one year of service and has achieved a certain number of working hours ("vocational record"). Peruvian legislation allows the possibility of managing PTO (division, accumulation, even reduction of PTO) when there is agreement with the employees.

It is important to note that the PTO has to be used by employees within a year of being acquired; otherwise, the company would have to pay a compensation equivalent to the amount of the PTO. Having this into consideration, if the PTO is not enjoyed on time, the employee will receive a triple income: (i) payment for the work performed, (ii) payment of the holiday remuneration acquired but not enjoyed, (iii) payment of a holiday allowance equivalent to one remuneration. Non-compliance with this regulation qualifies as an infraction classified as very serious, and fines could be imposed with amounts that vary between PEN 14,070.50 up to PEN 281,035.50.

d. Annual Integral Remuneration (RIA, per its acronym in Spanish)
 

It is convenient to mention that in general the executives agree with the employer on an Annual Integral Remuneration (RIA). For its granting there are two requirements:

• It is possible to agree on such a remuneration only if the employee receives a monthly amount larger than 2 Tax Units (gross PEN 10,700).
• There must be a written agreement between the employer and employee.

e. Language requirements
 

All employment contracts in Peru should be written in Spanish. However, other languages are also allowed on the condition that the contract contains a Spanish translation.

5. Other obligations of the employer
 

a. Minimum Living Wage
 

As of January 1, 2025, the Minimum Living Wage (RMV) in Peru is set at S/ 1,130.00.

Employers are required to ensure that all employees receive no less than the current RMV, regardless of the employment regime, sector, or type of activity. This obligation applies to all employees under a formal employment relationship and must be reflected in payroll records and employment contracts.

a. Regulations:
 

The employer is obliged to have the following regulations:

• Internal Labor Regulations of the company (mandatory only for those companies who have more than 100 employees)
• The Security and Health Internal Regulations (mandatory only for those companies who have more than 20 employees).
• Policy against Sexual Harassment at Work (mandatory only for those companies who have more than 20 employees).

b. Social worker:
 

Companies who have more than 100 employees is required to have a certified social worker. The employer must verify that he or she is qualified by the College of Social Workers of Peru.

c. Salary Equality:
 

The Salary Equality Law aims to avoid possible situations of salary discrimination for reasons of gender or any other nature, through the design of salary bands based on the level of contribution of each position to the achievement of the objectives of the company.

The main considerations for companies are:

• Define an internally equitable salary structure.
• Have a table of categories and functions.
• Establish a salary policy for the management of compensation and promotions and communicate it to the employees.
• Justify the existing salary differences based on objective criteria.

The employer must establish tables of categories and functions with the following minimum content:

• Jobs included in the category;
• General description of the characteristics of the jobs that justify their grouping into a category; and
• The organization and/or hierarchization of the categories based on their valuation and the need for economic activity.

Non-compliance with this regulation qualifies as an infraction classified as very serious, and fines could be imposed with amounts that vary between PEN 13,544.50 up to PEN 270,529.50. The amount of the corresponding fines is calculated based on the number of employees affected.

Finally, it is important to consider that, in the event that the labor administrative authority determines the existence of discrimination against an employee, in addition to the fine for the very serious infraction the company should reimburse the discriminated employee for the difference in relation to the reference related to salaries and legal social benefits.

B. Termination of Employees (Off boarding)

1. Definition

Dismissal is a form of termination of the employment relationship by decision of the employer. Specifically, there are the following possibilities of dismissal under Peruvian labor law: i) dismissal with just cause related to the employee's capacity and conduct, ii) arbitrary dismissal, iii) unjustified dismissal, iv) void dismissal, v) fraudulent dismissal and vi) indirect dismissal as a result of acts of hostility.

2. Types of Dismissal
 

Peruvian legislation has established some causes for the termination of the labor relation. Those causes regulated in LPCL are the following:

1. death of the employee;
2. resignation;
3. termination of the service, the resolution condition or expiration of the contract;
4. settlement between employee and employer;
5. total disability;
6. retirement;
7. dismissal according to law;
8. termination by objective cause.

Regarding dismissal, LPCL has set rules and procedures for valid dismissal.

Justified dismissal

Justified dismissal occurs when the employer verifies the occurrence of the assumptions that enable dismissal due to the employee's capacity or conduct.

Capacity:

• Physical, intellectual, mental or sensory deficiencies that arise when, after making the corresponding reasonable adjustments, they prevent the performance of their tasks, provided that there is no vacant position to which the employee can be transferred and that does not involve risks for their work. safety and health or that of third parties.
• Poor performance in relation to the employee’s capacity and average performance in tasks and under similar conditions.
• The unjustified refusal of the employee to undergo a medical examination previously agreed upon or established by Law, determining the employment relationship, or to comply with the prophylactic or curative measures prescribed by the doctor to avoid illnesses or accidents.

Conduct:

• The commission of serious misconduct (regulated in article 25 of the LPCL)
• Criminal conviction for intentional crime.
• The disqualification of the employee.

In both cases, the employer must give in writing the reasons that would determine the dismissal and grant the employee a period of no less than six calendar days to formulate the defense or thirty days to demonstrate the capacity or correct the deficiency. This period will not be granted in cases of flagrant serious misconduct in which this possibility is not feasible.

The law authorizes the employer, during the dismissal procedure for reasons related to conduct, to exonerate the employee from going to the workplace, without the exoneration affecting their right to defense or the payment of their salaries or other rights that may correspond to you. This exemption must be recorded in writing.

After the defenses have been presented, the employer will proceed to evaluate them and, if he considers that the alleged faults have not been refuted, or that the defenses have not been presented within the aforementioned period of six days, the employer may proceed to dismiss the employee.

Dismissal must be communicated in writing and the cause and date of termination must be precisely indicated. The dismissal letter cannot be based on a cause other than that alleged in the dismissal notice letter, unless during its processing the employer become aware of other serious misconduct and that have not been the subject of the accusation. In the event of justified dismissal, the advance notice and the notice of dismissal shall be understood validly delivered, if it was addressed to the last address registered by the employee at their workplace (although at the time of delivery, the employee was not in the workplace); it may also be delivered to the employee in the workplace, with proof of delivery.

The employer may not later refer to a cause other than the cause attributed in the dismissal letter. However, once the previous process of dismissal begins and the employer becomes aware of some other severe misconduct incurred by the employee which was not included in the accusation, then the employer may restart the process.

Severance Pay

In the event of justified dismissals, no severance pay is due. The employee is only entitled to the payment of their remuneration and social benefits (family allowance, legal bonus, extraordinary legal bonus, compensation for the time of service and annual vacations leave) within 48 hours of the termination, as well as the delivery of corresponding documents (work certificate, income certificate and withholdings).

Arbitrary dismissal
 

Peruvian legislation has rules and procedures for dismissal; thus, it could not be accurate to say that dismissal is free. In case the employer does not follow the rules for dismissal, the consequences could be the generation of these invalid dismisses:

Arbitrary dismissal is considered as lacking a fair cause, whose cause may not be proved in a judicial proceeding.

Arbitrary dismissal has an alleged reason, but it is not proven in the judicial process. In this case, in addition to the social benefits, an arbitrary dismissal compensation will be paid to the employees.

In cases of employees with an open-ended contract, a compensation equivalent to 1,5 monthly salaries per year of services rendered, up to a maximum of twelve salaries must apply. In case of a fixed-term contract, a compensation equivalent to 1,5 monthly salaries per each month that lasts up to the termination of the contract with a maximum of twelve salaries applies. In case the employee does not accept the indemnity, they can file a judicial claim in order to request their reinstatement.

In the event of arbitrary dismissal, the regulations do not establish any procedure; nevertheless, in practice, the employer proceeds to deliver the written notice of the dismissal to the employee, making it effective immediately.

Unjustified /uncaused dismissal
 

Uncaused / Unjustified dismissal is one that does not have or express cause and in a possible judicial procedure, the consequence is the reinstatement of the employee.

Void dismissal
 

Some employee´s situations enable them to enjoy special statutory protection against dismissal. When the dismissal is based on the following situations, it will be considered as void:

• Membership in a union or participation in union activities.
• Be a candidate for employees representative or act/have acted in that capacity.
• Filing a complaint or participating in proceedings against the employer before the competent authorities, unless it constitutes severe misconduct.
• Discrimination based on sex, race, religion, opinion, language, disability or any other nature.
• Pregnancy, if the dismissal occurs at any time during the pregnancy period or within 90 days after the birth. It is presumed that the dismissal is due to pregnancy, if the employer does not prove the existence of a fair cause to dismiss, in this case. This shall be applicable provided that the employer has been notified of the pregnancy prior to its dismissal and does not enervate the faculty of the employer to dismiss for fair cause.
• The employee is a carrier of HIV/AIDS. People with HIV/AIDS may continue to work while they are able to fulfill their obligations.

If the claim is judicially founded, the employee shall have the right to be reinstated without affecting their previous category, unless the employee chooses compensation, in which event the employment relationship shall no longer exist.

Reinstatement implies that the employer needs to pay the employee all remuneration due as from the day of dismissal until the moment of reinstatement.

Fraudulent dismissal
 

Fraudulent dismissal occurs when the employee is dismissed with a perverse intention and sponsored by deception, therefore, in a manner contrary to the truth, as happens when notoriously non-existent, false or imaginary facts are attributed to the employee. Likewise, it will be a fraudulent dismissal when an offense not legally foreseen is attributed to the employee.

The consequence of this dismissal is the reinstatement of the employee.

Indirect dismissal – Act of hostility
 

Acts of hostility are acts or omissions by the employer or its representatives that disturb or cause inconvenience to the employees and are usually aimed at the employee’s resignation.

Acts of hostility comparable to dismissal are the following: (i) Lack of payment of salary in the corresponding opportunity (except for reasons of force majeure or fortuitous case duly verified by the employer); (ii) Unmotivated reduction of salary or category; (iii) Transfer of the employee to a place different from that in which he usually provides services, with the purpose of causing him harm; (iv) Non-observance of hygiene and safety measures that may affect or endanger the employee's life and health; (v) Act of violence or severe misconduct in the grievance of the employee or its family; (vi) Acts of discrimination based on sex, race, religion, opinion or language; (vii) Acts against morality and all those that affect the employee’s dignity; and (viii) Acts of sexual harassment according to the law.

In the event of indirect dismissal, if the hostility persists despite the citation to the employer, employees can initiate a lawsuit to stop hostility or request the termination of the employment contract and the arbitrary dismissal compensation (amounts mentioned in the previous paragraph).

In the event of indirect dismissal, the employees, before initiating a lawsuit, must summon the employers in writing, stating the corresponding act of hostility, granting them a reasonable period of time not less than six calendar days to carry out a deposition or amend their behavior. If the hostility persists despite citation, employees can initiate a lawsuit to stop hostility or request the termination of the employment contract and the arbitrary dismissal compensation.

3. Legal means for employees
 

The term to act judicially in the cases of void dismissal, arbitrary dismissal and hostility expires after thirty (30) business days from the date on which the event occurred.

The statute of limitation does not harm the employee's right to demand within the prescriptive period (four years as from the termination of the employment relationship) the payment of other amounts owed to him/her by the employer.

4. Specific Rules for Executives
 

For executives, the same rules apply as for other employees.

Employees who entered directly into a position of trust or management can be fired due to withdrawal of trust. In this regard, various court rulings agree that they don´t have the right to reinstatement or compensation for arbitrary dismissal. Notwithstanding, it’s important to note that this type of dismissal and its implications have not been regulated in labor law.

5. Collective Dismissals
 

Termination by objective causes is also known as “collective dismissal” and is applicable in the following cases:

• Fortuitous event and force majeure.
• Economic, technological, structural or similar reasons.
• Dissolution and liquidation of the company, and bankruptcy.
• Estate restructuring subject to the General Law of the Insolvency System.

To make this type of termination effective, the procedure established by law must be followed, which involves a notice to or the approval from the Labor Authority.

In cases of economic, technological, structural or similar motives, collective termination must involve at least 10% of the total number of employees of the entity.

Get in touch
 

Pierre Angel Mendoza
Peru
pimendoza@deloitte.com | +5112118585