PERU Law and Practice Contributed by: Alvaro Echeandía, Alfred Kossuth Wieland, Pilar Santillán Meza and Rodrigo Varillas Cueto, Thorne, Echeandia & Lema Abogados
private sector, regardless of the nature of their relationship, whether it be training or civil. 4.2 Characteristics of Employment Contracts The characteristics of an employment contract depend on whether it is an indefinite-term or a fixed-term contract. As a general rule, if the activity to be contracted satisfies a permanent need of the company, it must be hired for an indefinite term; however, the labour law provides exceptions to this rule, provided that the contract corresponds to the type regulated as temporary, occasional, or for specific work or service, and complies with its legal requirements for use. In these cases, the employer must conclude the contract in writing, state the term and objectively support the temporary nature of the contract to avoid labour fraud, the sanction for which is the conversion of the contract to an indefinite one. The labour law also regulates the possibility of hiring a part-time worker, defined as those whose workday, divided into five or six days (depending on the company’s usual working hours), aver - ages less than four hours a day. Such contracts must be concluded in writing and submitted to the Administrative Labour Authority for registra - tion. 4.3 Working Time The ordinary working day is limited to eight hours daily or 48 hours weekly. However, certain workers are not constrained to this limit, such as managerial, trusted staff, trusted personnel, and those employees whose work is not under direct supervision (eg, work outside the employ - er’s premises). Overtime For workers who are subject to the maximum limit of the ordinary working day, overtime is paid
at a rate of 1.25 times the regular remuneration for the first two hours and 1.35 times for any additional hour. Working on a day of rest or holi - day is compensated with a 100% surcharge or with the corresponding financial compensation. 4.4 Termination of Employment Contracts According to the labour law, the employment contract is terminated for the following reasons: • the death of the worker or employer (if a natu - ral person); • the voluntary resignation or retirement of the worker; • the termination of service or work; • the fulfilment of the resolutory condition and the expiry of the term in contracts legally concluded under modality; • mutual dissent between worker and employ - er; • permanent absolute disability; • retirement; • dismissal, in the cases and manner permitted by law; and • termination of the employment relationship Collective dismissal for objective reasons is carried out when at least 10% of the payroll is affected, following the procedure established by law, and reporting to the Administrative Labour Authority, which decides on its approval. According to the labour law, termination for objective reasons includes the following cases: fortuitous event or force majeure; economic, technological, structural, or similar reasons; the dissolution and liquidation of the company, and bankruptcy; and asset restructuring. for objective reasons. Collective Dismissals
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