The employer must establish a real and serious reason to dismiss an employee.
It may be:
- a personal reason, notably a fault (disciplinary ground), poor performance, disablement of the employee when the employer is unable to relocate / redeploy him to another position or make reasonable adjustments to his post; or
- an economic reason, such as economic difficulties, technological changes or the absolute necessity of restructuring to safeguard competitiveness. The economic reason is analysed at the level of the group’s companies established in France operating in the same business sector. The redeployment obligation for economic dismissal is limited to jobs available “in French territory in the company or in other companies of the group, the organisation, activities, and operating location of which allows mobility of some or all of the personnel“;
- the refusal to amend the employment contract following a collective performance agreement
According to the Constitution, the law offers employees protection against unfair dismissal. This protection not only encompasses union members or any given class of workers, but all those who work at least four hours a day and have exceeded the probationary period. These employees may not be dismissed without fair reasons, as expressly provided for by law. If the reason for dismissal is not one of a number of ‘fair reasons’ included in the law, an employee has the right to choose one of the following alternatives:
- Bring a claim against the employer for reinstatement; or
- Bring a claim against the employer to receive compensation due to unfair dismissal.
The following are considered fair reasons, as provided for by law, that allow employers to dismiss employees:
i. Reasons related to capability:
- The employee loses his physical or mental faculties or becomes suddenly incompetent in a manner detrimental to his job performance; the employee performs poorly compared to the average performance of other personnel and the employee; or the employee unjustifiably refuses to undergo a medical examination related to the performance of duties.
- Court conviction for an intentional crime.
ii. Reasons related to major faults or misconduct that are specifically provided for in the law:
- Failure to comply with duties.
- Decline in performance.
- Misappropriation or attempted misappropriation of the goods or services of the employer.
- Disclosure of confidential information or provision of false information that may be detrimental to the employer.
- Unfair competition.
- Attendance in the workplace under the influence of alcohol or drugs.
- Committing violence, severe indiscipline, or intentional damage to the employer’s goods.
- Unjustified absences of more than three consecutive days or five non-consecutive days and repeated delays.
Nevertheless, according to Peruvian law, the first three months of services constitute an employee’s probationary period. During this time, the employee is not legally protected against dismissal and therefore may be dismissed by the employer without invoking any reason or complying with any formality.
The law authorises parties to establish a probationary period of a maximum of six months for qualified employees or persons of trust who work closely with senior staff and have access to the company’s confidential information. In these cases, the term of the probationary period in the contract must reflect the requirement for training, adjustment requirements or the position’s level of responsibility.
An employment agreement can be terminated by the employer and the employee can be dismissed in two different ways: with cause, when the employee has committed one of the breaches specified in the labour laws, or without cause, when the employee is dismissed at the employer’s discretion, due to redundancy or other reasons that do not necessarily need to be specified.
The difference between dismissal with cause and without cause lies in the severance payments that the employer must make to the employee upon dismissal (see below).
The labour legislation determines that an employee can be dismissed with cause for the following reasons:
- sexual harassment or inappropriate behaviour;
- the employee competes with the employer’s line of business or carries out other business prejudicial to the employee’s work, on his / her own or through third parties, without the permission of the employer;
- the criminal conviction of the employee, resulting in the employee being incarcerated and not able to attend work;
- poor performance;
- frequent drunkenness or drunkenness at work;
- disclosure of company secrets;
- insubordination or indiscipline;
- the employee abandons his work;
- insult, defamation or slander, or physical offence, carried out at work against any person, except in legitimate self-defence or in defence of a third party;
- insult, defamation or slander, or physical offence, carried out at work against the employer or superior, except in legitimate self-defence or in defence of a third party;
- frequent gambling;
- losing the professional qualification necessary to perform work due to the employee’s fault; and
- being involved in actions contrary to the national security, as duly evidenced through an administrative proceeding
The following employees have the right to stability, and cannot be dismissed without cause from their employment:
- pregnant employees cannot be dismissed without cause from the date the pregnancy is confirmed until five months after giving birth to the child;
- an employee who suffers an accident at work and is prevented from attending work for at least 15 days cannot be dismissed without cause for a period of one year, counted from the date the employee returns to work; and
- an employee elected president of the internal commission for accident prevention cannot be dismissed without cause from the date he registers to run for the position until one year after the end of his / her tenure.
In addition to dismissal of the employee with cause or without cause, the employer and the employee can amicably agree to terminate the employment agreement. In such a case, lower severance payments are due (see below).