This content is from: Local Insights

Labour topics in 2012

This year will probably become one of the most important regarding labour regulation changes in Peru. There are several matters to which companies, trade unions and employees in general should pay special attention.

Jaime Cuzquén Carnero

This year will probably become one of the most important regarding labour regulation changes in Peru. There are several matters to which companies, trade unions and employees in general should pay special attention.

With respect to labour trials, the application of the new oral procedural model introduced in 2010 will be extended to include Lima and the most important regions of Peru. For companies, it is essential to take preventive action, such as the improvement of internal files, internal training of representatives to act before a judge and the other party, and training for directive personnel and employees on various labour issues, because the oral model has been created to obtain guidance and certainty of results on behalf of the parties.

Workers and unions will have the opportunity to achieve, in less time, the attention to their claims. The speed of the process and the incentive to conciliation will lead to a refocusing of the labor procedural strategies.

The authorities have also announced that supervision through labour inspections will be increased with more personnel and budget, as well as much more important economic sanctions. A National Superintendence of Labour will be created. It is also essential to know how to respond to a labour inspection and how to attend a disciplinary administrative procedure.

The topics subject to more supervision will be, among others, health and safety at work, freedom of association, profit participation, bonuses, compensation for time of services, and overtime. Workers and trade unions have in the Labour Inspection a gradually better tool that enforces their rights and punishes employers.

Last year a new law on the subject of health and safety at work was introduced. In addition, the Ministry of Labour has become the competent entity to supervise this matter, including the possibility of establishing compensation in case of accidents at work and occupational diseases. Another important issue in this law is a new criminal sanction to legal representatives, due to responsibility, in the case of injuries resulting from accidents at work and occupational diseases.

Current health and safety regulation for mining, hydrocarbons, electricity, industry and construction will be adapted to the new law. Companies must improve their standards of occupational risk prevention. The cost of injury to a worker is not only economic but also affects a company's prestige and productivity.

The General Labour Law Project has considered the consensus reached several years before by employers, workers and the Ministry of Labour. It will generate, among other matters: i) an increase of costs in relation to dismissal (greater compensation); (ii) joint and several liability of a group of companies; (iii) elimination of some fixed-term labour contracts; and, (iv) regulation of dismissal according to jurisprudential trends from the Constitutional Court.

Finally, the trend towards greater protection of freedom of association will be maintained. To form a union requires only a decision of 20 employees and its registration is almost automatic with the Ministry of Labour. There is a public promotion of the Ministry of Labour with regard to the rights of freedom of association and collective bargaining. New free trade agreements will enter into force during 2012, and they include the above-mentioned rights as the core of the protected labour standards.

For employers it is advisable to promote good labour practices; but most important is to comply with the law. For employees and unions, collective bargaining is the best tool to get benefits above the law but without affecting the competitiveness of the company. Collective agreements of more than one year in duration should generate a best-case scenario for a company's labour relations.

Jaime Cuzquén Carnero

© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.

Instant access to all of our content. Membership Options | 30 Day Trial