Peru

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KEY DEVELOPMENTS FOR 2024

Suspension of restrictions on outsourcing

The Antitrust Agency (“INDECOPI”) has recently issued a final ruling stating that the restrictions on outsourcing imposed by Supreme Decree No. 001-2022-TR qualify as illegal bureaucratic barriers and, as such, cannot be applied to actors in the market (i.e., enterprises in Peru), despite not repealing the regulations altogether. Though the ruling is final at the administrative level, it has not put an end to the policy-based discussion. First, INDECOPI’s resolution could still be overturned, either (i) ex-officio by INDECOPI within a year following the resolution’s issuance, or (ii) by the Judiciary if the resolution is challenged in court. Second, there is an ongoing constitutional proceeding that is analysing the legality of Supreme Decree No. 001-2022-TR. In this case, the courts will determine whether the regulations should be definitely repealed or not. If the regulations are not abolished, they will continue to be “live” but inapplicable. Employers should continue to be aware of the direction taken by the courts in respect of this matter and seek to follow the application of the regulations and/or restrictions as determined by the courts to be in full compliance with the law.

New telework regulations

In 2023, the Government issued Supreme Decree No. 002-2023-TR and introduced a series of new provisions to further expand on the new telework framework introduced by Law No. 31572 in 2022.

Among others, the new regulations include (i) pre-established rates to compensate employees for electricity and internet costs (except when agreed otherwise); (ii) a self-evaluation form for employees to assess the health and safety of their workspace; and (iii) new administrative infractions linked to telework that can be fined by the Labor Inspection Authority (“SUNAFIL”). Employers should consider providing the self-evaluation form to employees to better inform compliance with the new regulations.

Sexual harassment and other forms of violence

The strengthening of the institutions and guidelines surrounding sexual harassment in the workplace has resulted in a steady increase in the number of complaints registered with the Ministry of Labor since the introduction of the new investigation and disciplinary proceeding in 2019.

In 2023, Peru ratified the International Labour Organization’s Convention on Violence and Harassment (the “Convention”), which imposes more obligations on employers. For example, the Convention requires employers to involve their employees in the drafting of internal policies dealing with the prevention of violence in the workplace (including sexual harassment) and in the identification of potentially risky situations.

Consequently, employers will need to focus more resources on dealing with this important issue in the coming year.

KEY DEVELOPMENTS FOR 2023

Restrictions on outsourcing

Following the recent trend that sees our government moving against outsourcing and labor intermediation, the Ministry of Labor issued Supreme Decree No. 001-2022.TR, whereby it amended the Regulations to the Outsourcing Law and banned the outsourcing of core business and complementary activities.

According to Supreme Decree No. 001-2022.TR, only “main” non-nuclear activities (such as back-office activities) can be outsourced to a third party.

Many companies filed a complaint against the amendments at the Antitrust Agency (“INDECOPI”)’s Bureaucratic Barriers Commission, alleging that they impose undue and illegal market restrictions. These complaints resulted in the new regulations being temporarily suspended until the Commission issues its final decision.

It remains to be seen whether the current changes will go into effect, but it is undeniable that the trend toward limiting or prohibiting outsourcing continues.

New Telework Law

Congress has recently passed a New Telework Law which supersedes the existing legislation and seeks to regulate any and all work from home schemes currently in existence. This means that, going forward, employers will no longer be able to regulate their own home office policies, which tended to be less strict than what will now be required from companies that wish to allow their employees to work from home.

Among others, the New Telework Law will force employers to do the following:

• Provide, or otherwise compensate, the employee for internet, electricity and equipment, unless otherwise agreed;

• Be responsible for the safety and health of their workers (work accidents and occupational illnesses) while they are working from home;

• Properly justify the reasons why the company needs an employee to return to the workplace before being able to order it.

The New Telework Law will be enforceable 60 business days after the Regulations are issued by the government.

Changes to legislation regarding collective labor relations

The Ministry of Labor issued Supreme Decree No. 014-2022-TR, whereby it amended the Regulations to the Collective Labor Relations Law and introduced several changes to the established system.

In general, the changes seek to introduce new union formulas, open up collective labor relationship among independent workers, grant more power and protection to union representatives and limit the employer’s options during strikes and collective bargaining proceedings.

These changes were being discussed in the National Labor Council, where government officials, employee unions and employer organizations meet to reach tripartite agreements regarding collective labor relations legislation. The Ministry’s decision to bypass the Council and issue the amendments against what had been decided by the Council has been heavily criticized, and has led the employer organizations to suspend their participation in the Council.

KEY DEVELOPMENTS FOR 2022

Requirement for ‘at risk’ employees to compensate employers for paid leave

Since March 2020, in order to prevent the spread of COVID-19, the Government declared a State of National Emergency and a period of Sanitary Emergency, imposing various restrictions such as border closures, mandatory social isolation, as well as general limitations on the freedom of movement of persons. In order to allow companies to survive during this difficult period, the Government took certain measures to help preserve employment.

According to Emergency Decree No. 026-2020 and Emergency Decree No. 029-2020, employees from the risk group or those who could not provide physical work because of COVID-19 restrictions, whose activities are/were not compatible with remote work, are entitled to paid leave subject to future compensation. Currently, there is a debate as to how to compensate relevant employers for what may be a significant number of days spent on leave.

Employers should be aware of their obligation to grant paid leave subject to compensation to employees within the COVID-19 risk group for the duration of the health emergency when it is not possible for them to provide their services remotely. Employees and employees should seek to agree the compensation payable in accordance with Article 26 of Emergency Decree No. 029-2020. The paid leave could be offset against vacation, overtime, work during a rest day, or even against monetary benefits. If the parties fail to reach an agreement, the employees must compensate any pending hours after the conclusion of the State of Emergency.

Recently, the Labor Inspective Tribunal has issued more than one decision stating that it is possible to deduct any pending paid leave from the settlement of statutory benefits.  Employers should bear this in mind to the extent they are still seeking compensation from relevant employees.

Employees required to be vaccinated before entering the workplace

On December 18, 2020, the Peruvian Government passed Law No. 31091, which “guarantees the population’s voluntary access to vaccines against the SARS-CoV-2”. Whether the COVID-19 vaccines should be mandatory or not was discussed while drafting the Law. It was argued that the Constitution’s stance on free determination would not allow mandatory vaccination of the population. 

However, Supreme Decree No. 179-2021-PCM and later, Supreme Decree No. 005-2022-PCM were issued generally stating that that employees must be vaccinated in order to work in person as of 10 December 2021 and certain rules regarding non-vaccinated employees (remote work and furlough, etc.). The employer must verify the compliance with the mandatory vaccination for those rendering presential (face to face) work at the workplace. Vaccination is not required for teleworking or telecommuting.

In light of the above, employers must prohibit employees from entering the workplace if they are not fully vaccinated.  If an employee is not vaccinated and the employer finds that his duties are compatible with remote work, the employer should allow it. If remote work is not possible, then the employer is allowed to apply a furlough.

Proposed changes to outsourcing of services

In recent years, there have been a persistent movement against outsourcing and labor intermediation (agency employees) that -without success- have tried to prohibit their use. Currently, a bill was filed that "optimizes essential public services, promotes business activity and guarantees the rights of workers hired under labor intermediation and outsourcing regimes".

This bill seeks: (i) the prohibition of the regulation of outsourcing and intermediation in the case of essential public services, (ii) the prohibition of labor outsourcing for core business activities (iii) the regulation of employees profit sharing; and, (iv) modifications in the collective relations. Employers should continue to monitor developments in this area of law and ensure compliance if these changes come into force

KEY DEVELOPMENTS FOR 2021

Elevated risk of anti-employer regulation

Currently, the Peruvian political scene is chaotic. The Congress is heavily inclined to demagogy and the left leaning Executive does not seem strong enough to oppose populist initiatives. Promotional (with lesser benefits) labour regimes are under siege, and may succumb to the relentless attack that they have been enduring for several years.

Rise of illegal ("informal") labour relationships

In Perú, 65% of all labour contracts exist outside the law, with no benefits of social coverage for the employees. We fear that such a number will only rise, as unemployment has increased due to the COVID‑19 crisis, and because the State continues to punish law abiding employers (as our clients) with excessive regulation.

KEY DEVELOPMENTS FOR 2020

New legislation relating to workplace sexual harassment

The Peruvian Government has recently passed a comprehensive reform of the current anti-harassment framework in order to provide further protection to victims of sexual harassment in the workplace. Amongst other things, the definition of sexual harassment has been broadened to include sexist behaviours and comments, and the structure of investigations into possible sexual harassment cases has changed by introducing strict deadlines and formal obligations that must be complied with.

Equal Pay

In order to eliminate wage discrimination between men and women, employers in Peru must rank their job positions by implementing an objective valorisation system to assign salaries based on an 'equal pay for job of equal value' basis. However, the law does not address how any pay disparities identified using this method should be dealt with.

Measures to strengthen employees' health and safety at work

As a result of a series of fatal work accidents in well-known companies, a number of legal measures have been introduced to increase health and safety for employees in the workplace. For example, the Criminal Code has been amended to assign criminal liability to managers who neglect their health and safety obligations, the labour inspection authority can close workplaces as a penalty for non-compliance, and it is now mandatory for employers to provide life insurance coverage to their workers from the start of the employment relationship.

KEY DEVELOPMENTS FOR 2019

Reforms to paid leave

The Legislative Decree No.173 came into force on 13 September 2018 and has made several changes to paid leave.

The changes include:

• allowing leave to be taken in advance by borrowing from the following year’s entitlement, provided that there is a written agreement in place between the employer and employee;
• splitting the 30 day holiday entitlement at the written request of the employee. The first period of 15 days can be taken as one continuous period or in periods of seven or eight uninterrupted days. The second 15 days can be taken in periods of less than seven calendar days provided a minimum of one day is taken; and
• reducing the employee’s holiday entitlement from 30 day to 15 days by making a payment in lieu of 15 days holiday as compensation.

Key developments in paternity leave

Law 29409 will come into force on 6 July 2019 and provide father’s with a right to take 10 consecutive days paid paternity leave after the birth of the child. In cases of premature or multiple births, the employee will be entitled to 20 consecutive days paid leave and in cases of births with congenital disease, severe disability or serious complications for the mother the employee will be entitled to 30 consecutive days paid leave.

Leave will start either from the date of the birth of the child, the date of discharge from the hospital or three days before the due date. If the mother dies during childbirth the father will be entitled to take the mother’s maternity leave.

An employee is also entitled to request that his paternity leave is extended by using his holiday leave provided this request is made no less than 15 calendar days before the due date.