Employment Law Overview Peru

Introduction

The labour legislation in Peru regulates the conditions, benefits, rights and obligations inherent to an employment contract. However, it is important to specify that there are certain sectors that, depending on the nature of the activity or the conditions under which it is carried out, are subject to special labour regimes, such as mining, ports, civil construction, among others.

However, it should be noted that said legislation will be applicable whenever we are faced with a labour relationship, for which the concurrence of three (3) essential elements must be verified:

(a) Personal provision of services;

(b) Remuneration paid in favour of the employee;

(c) Relationship of subordination, by which the employer is the one who directs, regulates and sanctions the activity of the worker (for example, through the establishment of a work schedule, own guidelines for the performance of their functions, application of sanctions, among others).

In Peru, labour law is based on principles, which can be defined as maximally universal practical-normative statements that are at the top of the normative legal order, being the most important in Peruvian Labour Law:

• Protective Principle: seeks to compensate for the existing inequality in reality, between the worker and the employee.
• Principle in dubio pro operator: in case of doubt a rule is interpreted in favour of the worker.
• Principle of inalienability of rights: its objective is to prohibit the worker from renouncing his labour rights recognised by the Constitution and current laws to his own detriment.

Labour rights in Peru are set forth in its Constitution; the Law of Productivity and Labour Competitiveness; the Procedural Labour Law; the Law on Collective Labour Relations; the Law on Days of Work, Hours, and Overtime; and the Regulations on Safety and Health in the Workplace; as well as in sector-specific legislation and ratified international conventions.

Peru’s Constitution expressly guarantees that work, in its various modalities, is the object of priority attention of the State, which especially protects the working mother, minor and disabled. It also sets forth that the Peruvian State promotes conditions for social and economic progress, especially through policies to promote productive employment and education for work. No labour relationship can limit the exercise of constitutional rights or ignore or reduce the dignity of the worker.

In addition it guarantees freedom of association and provides for collective bargaining and the right to strike. It also addresses forced labour, discrimination, protections for women and children in the workplace, minimum wages, working hours, and protection from arbitrary dismissal.

Peru’s Law of Productivity and Labour Competitiveness of 1997 seeks to improve worker skills and training, increase workers’ earning capacity, consolidate regulations on employment contracts, and strengthen existing social benefits. The law regulates work contracts, employee training, domestic service work, and programs to redirect business activities towards more productive markets in the urban and rural sectors.

The Procedural Labour Law of 2010 governs the procedures for labour court proceedings, as well as procedures for arbitration.

Key Points

1. In Peru, the first obligation that the employer has with his worker is to formalise the employment relationship through the signing of the respective employment contract, which establishes the general conditions of the contract, otherwise it will be considered as an indefinite term relationship.
2. The maximum legal working day is eight hours a day or 48 hours a week. In addition, at least 24 consecutive hours of rest each week, which will preferably be granted on Sunday.
3. The worker is entitled to receive, in the months of July and December, the bonus for National Holidays and Christmas, which will be equivalent to the remuneration regularly received by the worker.
4. The employer must deposit in a banking institution, at the worker’s choice, in the months of May and November, 1/6 of the computable remuneration received by the worker during the months of April and October.
5. The worker is entitled to 30 calendar days of vacation rest for each full year of service. The amount of vacation pay is equivalent to what the worker would have received if he continued working.
6. If the worker has children under 18 years of age or of legal age who are pursuing higher or university studies, with a maximum of six years after reaching the age of majority, he has the right to receive the family allowance, equivalent to 10 % of the current minimum living wage.
7. If the employer generates profits and has more than 20 workers, the employee has the right to participate in the distribution of profits, which will be made: 50% based on the days actually worked and the other 50% on depending on the remuneration of each worker. Profit sharing has a limit of 18 monthly remuneration and is distributed considering percentages legally established.

Legal framework

The labour law in the Political Constitution of Peru, in force since 1993, establishes in its article 1 that the defence of human dignity is the duty of society and the State, by virtue of this, the following articles establish principles and rules, in particular referring to labour rights.

Thus, in article 2, numeral 14, it establishes that every person has the right to “contract for lawful purposes” having as limits the Law and public order. In article 22, it defines work as a duty and right as it constitutes the basis of social welfare and a means of fulfilment of the person. In article 23, it establishes work as an “object of priority attention of the State” through labour education and the promotion of employment. Article 24 consecrates the right to “fair and sufficient remuneration” that seeks material and spiritual well-being for the worker and his family. In this context, the Political Constitution obliges the governments of the day to permanently evaluate the determination of the minimum living wage with the participation of representative organisations of workers and employers organised in the National Labour Council.

In article 25 of the Political Constitution, the maximum working day is established as eight hours a day or forty-eight hours a week. The dilemma implies, on the one hand, the ordinary working day and the possibility of establishing extraordinary working hours, in any case, which must be compensated by the employer. Article 26 establishes three labour principles that, through the principle of constitutional irradiation, configure and align labour law in general, these principles being the following:

1. Equal opportunities without discrimination.
2. The inalienable nature of the rights recognised by the Constitution and the Law.
3. The interpretation favourable to the worker in case of insurmountable doubt about the meaning of a rule.

Article 28 of the Political Constitution of Peru guarantees the exercise of labour rights of a collective nature, such as unionisation, collective bargaining and the right to strike. Rights that, as provided in the regulations, must be exercised in accordance with the rules of the democratic, constitutional and social State of law. Finally, article 29 grants workers the right to participate in the company’s profits, that is, in the annual profits after their tax returns.

In Peru, labour legislation is scattered, even though we have the general rule of regulation of the Single Ordered Text of Legislative Decree N° 728, Labour Productivity and Competitiveness Law (Supreme Decree N° 003-97-TR). However, it does not cover the heterogeneity of types of activity that exist in our system. The existence of labour regimes in private activity is recognised, but with special characteristics, as well as others that are not and are governed by their own regulations. Article 45 of said Law states that workers under special regimes will continue to be governed by their own rules.

Law N° 29783 “Law on Safety and Health at Work” aims to promote a culture of prevention of occupational risks in the country. For this, it has the duty of prevention of employers, the role of inspection and control of the State and the participation of workers and their union organisations, who, through social dialogue, ensure the promotion, dissemination and compliance of the regulations on the matter.

New Developments

On 27 April 2023, the term granted to employers to adapt their internal processes to new regulation of teleworking expires. Therefore, since 28 April, all Peruvian employers which adopt teleworking must follow regulations set forth in Law No. 31572, Law of teleworking and Supreme Decree No. 002-2023-TR.

The law recognises teleworking as a valid way to carry out work, inside or outside the country, providing that the teleworker enjoys the same rights as the personnel who work in person.

Employer and employees must agree on the provision of teleworking services in the employment contract (which can be fixed-term or indefinite, full-time or part-time) or, subsequently, through a private agreement. In any case, the document must be stored in a digital medium that ensures its integrity and authenticity. The document agreeing the change of service modality must define (i) whether it will be total or partial, (ii) the period, (iii) the minimum notice period for the worker to attend in person to company’s premises, (iv) the work schedule, (v ) the teleworker’s domicile, (vi) the communication, supervision, control mechanisms, the applicable digital platforms and technologies, (vii) the affidavit prohibiting the use of third parties for the provision of services, among other aspects.

Regulation also recognises the obligation of the employer to provide work tools, the internet to the teleworker and to assume the cost of electricity, unless the worker takes charge of what is indicated in exchange for financial compensation. It is also allowed to agree otherwise.

Regarding the reversibility of teleworking, the teleworker can request the employer to change the modality of the provision of his work face to teleworking, or from teleworking to work at company’s premises, which is evaluated by the employer, being able to deny said request in use of his directing power, evidencing the reasons of such denial within 10 business days of request. It is provided that the employer, exceptionally in use of his directing power and for duly supported reasons, could change the mode of rendering services from working at company’s premises to teleworking, or vice versa. This change must be made prior notice in writing or by e mail to the worker or teleworker, at least 10 business days in advance.

The Law also states that employer is responsible for granting safety and health at work by informing teleworker all the risks that may arise from labour duties. Teleworker should allow employer´s entrance to his workplace. Also, teleworker could use a self-examination format which would be approved by Ministry of Labour.

New regulation also establishes that the teleworker must comply with a work schedule unless legally excluded from it and that the employer must recognise his right to digital disconnection and respect his rights to privacy and secrecy of communications. The teleworker must be available to the employer during the working day and fully comply with his obligations.