When a Peruvian labor court overturns a dismissal, it is rarely because the judge believed the employee over clear evidence. More often, the employer made a mistake that the law does not forgive: the wrong route, a missing step, a vague letter, a delay nobody could explain. For international companies, these mistakes tend to originate outside Peru, in global processes designed for jurisdictions where termination is a matter of notice and money.
This article groups the most frequent errors by phase, explains what each one triggers, and suggests how to prevent it. It is a companion to our guide to termination of employment in Peru and our overview of dismissal for serious misconduct.
Phase 1: choosing the route
1. Treating a business decision as a just cause
Article 22 of the Productivity and Competitiveness Law (the consolidated text of Legislative Decree 728, or LPCL) requires a just cause related to conduct or capacity for employees working four or more hours a day. Eliminating one position in a restructuring is not such a cause. Only a collective termination covering at least 10% of the workforce, under a procedure before the Ministry of Labor and Employment Promotion, allows terminations for economic, technological or structural reasons. Individual position eliminations are usually handled through negotiated exits.
2. Disguising the real reason
When the real reason is a reorganization, some companies build a performance or misconduct case after the fact. This is among the most dangerous mistakes. The Constitutional Court, in Exp. 976-2001-AA/TC (Llanos Huasco, 2003), identified the fraudulent dismissal, based on non-existent, false or imaginary facts or on fabricated evidence, as a category where reinstatement is available.
3. Assuming “expiry” ends the relationship
A fixed-term contract that has become indefinite under article 77 of the LPCL (for example, because the employee kept working after the term, the objective cause was not genuine, or the contract was used fraudulently) cannot be ended by invoking its expiry date. Similarly, a probationary period extended beyond three months without a written agreement, or beyond the permitted limits, does not protect a termination without cause.
Phase 2: before the notice of charges
4. Overlooking protected status
Article 29 of the LPCL makes a dismissal null when it is motivated by union activity, standing as a worker representative, a complaint against the employer, discrimination, pregnancy or the period after birth. Special laws protect employees with HIV/AIDS or disabilities, and Law 32431 added dismissals motivated by a cancer diagnosis, including for employees on probation, part-time staff and trust positions. Under Supreme Decree 008-2026-TR, if the employee had disclosed the diagnosis and the employer cannot prove an unrelated just cause, the dismissal is presumed linked to it.
Watch out
Screening for protected status should happen before the first letter, not after the employee’s lawyer raises it. The remedy for a null dismissal is reinstatement with back pay.
5. Letting the investigation drift
The immediacy principle in article 31 requires the employer to act within a reasonable time after learning of the misconduct and completing its investigation. Weeks spent waiting for a regional committee, a translation or a global legal sign-off are hard to justify. How to structure the file quickly is covered in documenting workplace misconduct.
Phase 3: the procedure
6. Vague or incomplete charges
A notice of charges that alleges “loss of confidence” or “breach of policy” without specific facts, dates and a statutory ground does not allow a real defense. And because article 32 prevents the employer from later relying on a different cause, whatever is not charged is lost. See the notice of charges before a dismissal in Peru.
7. Short or illusory response periods
The minimum is six calendar days for misconduct and thirty for capacity. Giving 48 hours, or wording the notice as a decision already taken, undermines the procedure. So does ignoring the employee’s response. The standards are explained in the employee’s right of defense before dismissal.
8. Unpaid “suspension pending investigation”
The law allows a release from attendance during the procedure only if the employee continues to be paid. An unpaid suspension before any finding is, in substance, a sanction without procedure.
Phase 4: the decision and after
9. A dismissal letter that says too much or too little
The letter must state precisely the cause and the date of termination. Adding new facts, relying on a different statutory ground, or omitting the cause altogether all weaken the case. If the employee refuses to receive it, delivery through a notary, a justice of the peace or, failing both, the police should be documented.
10. Mishandling the exit payments
Delaying the final settlement, failing to issue the certificate the employee needs to withdraw CTS (a severance fund the employer deposits twice a year into a bank account in the employee’s name), or mixing an exit incentive with statutory benefits creates separate claims and damages credibility in any dismissal case.
Cross-border mistakes worth a separate mention
Some errors are specific to groups managed from abroad and cut across all four phases.
Letting a regional policy override Peruvian procedure. Regional HR manuals often provide for immediate termination for defined offenses, short response windows or decisions made by a committee without hearing the employee. Where the manual and Peruvian law conflict, the manual does not protect the Peruvian employer in court. It should carry a Peru annex that states the statutory steps expressly.
Letters drafted and signed by expatriate managers. An expatriate who is not a registered representative of the Peruvian entity may lack authority to act as employer in disciplinary matters, and a letter in English gives the employee an argument that they could not understand the charges or the decision. Both are simple to fix in advance through powers of attorney and Spanish-language templates.
Announcing decisions before the procedure. A global town hall or internal memo announcing that a Peruvian role “will be eliminated” or that an employee “has been terminated for cause” before the letters are issued is evidence that the outcome was decided in advance, whatever the procedure later shows.
Key point
A useful internal rule: no communication about a Peruvian termination, internal or external, before the Peruvian route has been classified and the first letter has been reviewed locally.
What each mistake can trigger
| Mistake | Likely characterization | Main exposure |
|---|---|---|
| No cause stated or business reason only | Dismissal without cause | Severance or reinstatement |
| Cause invented or evidence fabricated | Fraudulent dismissal | Reinstatement |
| Cause not proven or procedure defective | Arbitrary dismissal | Statutory severance |
| Prohibited motive (union, pregnancy, cancer, etc.) | Null dismissal | Reinstatement with back pay |
Statutory severance is one and a half ordinary monthly salaries per full year of service, capped at twelve (LPCL article 38). The employee has 30 calendar days to challenge a dismissal (article 36). The full exposure analysis is in unfair dismissal in Peru.
Illustrative scenario
Illustrative scenario
Illustrative scenario: an engineering firm headquartered in Italy decides to close its Peruvian business development unit. The expatriate country manager, who is not registered as a legal representative of the Peruvian entity, emails the unit’s three employees a letter in English citing “persistent underperformance” and ending their employment effective immediately. One of them had informed HR two months earlier of a cancer diagnosis.
In a single step, the company combines several mistakes: a business decision disguised as performance (mistake 2), no capacity procedure with thirty days to improve, a signatory without clear authority, letters in English, and a protected employee now covered by a statutory presumption. The lowest-risk path at that point is usually to withdraw the letters, reinstate the employees on pay and restart with negotiated exits, prioritizing a respectful agreement with the protected employee, or keeping her in a suitably adapted role.
Preventive recommendations
- Require a Peruvian legal classification for any termination approved abroad.
- Screen for protected status before any communication.
- Set a target timeline from investigation closure to notice of charges.
- Issue all letters in Spanish, signed by a representative with authority under the Peruvian entity’s powers.
- Keep a checklist per case covering route, protected status, procedure, delivery and exit payments.
Our terminations and exits practice reviews individual cases before execution and helps international groups build Peru-specific steps into their global processes.
Key takeaways
The errors that undermine dismissals in Peru are predictable, which means they are preventable. Choose the right route, check for protected status, act promptly, charge specific facts, respect the response period, write a precise letter and close out the payments properly. Companies that follow that sequence rarely lose a well-founded case; those that import at-will habits frequently do.