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02. Employment Contracts

Minimum requirements

The contract is an act that is based on the will of the contracting parties. The Political Constitution in its article 62 establishes the freedom of contracting, providing that the resolution of contracts does not proceed by Law, but rather that it is resolved in the jurisdictional venue or through arbitration, as agreed in the instrument. The employment contract, specifically, is governed by Legislative Decree N° 728 Labour Productivity and Competitiveness Law (LPCL), which in its Titles I and II establishes the rules covering hiring mechanisms for an indefinite term as a rule and for a fixed or determined term as an exception. The exercise of this right is based on the will and at the same time on legality because, although the object of the contract can be freely agreed upon, moreover, inalienable aspects that the Law and the Constitution establish cannot be agreed voluntarily.

Fixed-term/Open-ended Contracts

The employment contract finds a definition in what is established in article 4 of the LPCL, where its existence is presumed for an indefinite period if it is verified that the provision of the service is carried out personally, subordinated and remunerated. Indeed, the general rule within the Labour Regime of private activity is the hiring of personnel for an indefinite period, however, due to the nature of the service to be provided, the law has exceptionally provided for fixed-term hiring, that is, temporary contracts. or subject to modality.

The law allows hiring fixed-term workers if justified by the temporary nature of the service to be provided. To enter into a fixed-term contract, it is necessary to prove that the service to be provided by the worker is, by its nature, of a temporary nature, whether it is ordinary or complementary work. This must be specified in the contract, specifying the facts that support the temporary contract and be in a position to document them.

If the employee decides to dispense with the services of a worker hired for a fixed term before the expiration date agreed in the contract without there being “just cause” for it, he must pay as compensation one and a half ordinary monthly remuneration for each month stopped working until the contract expiration. The maximum limit is twelve monthly remunerations in accordance with current legislation.

On the other hand, fixed-term employment contracts will be considered indefinite, with the consequent modification of the rapid regime, in the following cases: i) if the worker continues to work after the expiration date of the stipulated term, or of their extensions if they exceed the maximum limit; and, ii) when the worker demonstrates the existence of simulation or fraud of the rules that regulate fixed-term contracts.

Trial Period

The trial period is three months, after the trial period, he reaches the protection against arbitrary dismissal applicable to his contract. The extension of the period proceeds when a longer period of training or adaptation is required, justified by the nature of the work or the degree of responsibility and with a maximum term of up to 6 months in the case of qualified or “trusted” workers and up to 1 year in the case of management personnel.

Notice Period

In Peru, when the worker decides to terminate employment, he or she can request exemption from notice of 30 calendar days prior to the termination date, to which the employer may or may not exempt him or her, and must respond in writing within the following 3 days. If the period of 3 days to respond passes without the employer responding, and the worker has requested exemption from notice, said exemption is understood to be tacitly granted and the termination occurs on the fourth day after receiving the letter of resignation. In case of expiration of the contract, an advance term is not necessary, since the parties know the date of its termination, at the time of signing it.

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