Law 157 of August 3, 2020, establishes temporary employment protection measures for companies affected by COVID-19.

To whom does it apply? 

• Companies that closed, completely or partially, their operations from the beginning of the State of National Emergency until December 31, 2020 (the “Period”).
• Employees whose contracts have been suspended by tacit or express authorization of the Ministry of Labor, during this period.

Restarting operations

The employer may progressively restart its economic activity by gradually reinstating its employees with suspended contracts, taking into consideration the recommendations of the Special Committee on Health and Hygiene and applicable health standards. Suspensions of contracts may be extended, month by month, until December 31, 2020. The hiring of new workers is not permitted unless the companies require new job positions.

Working day

The employer who has reactivated its operations may establish work shifts different from those in force in the company but must inform the workers of such changes. Companies that have maintained their operations since the declaration of the State of National Emergency may not change their shifts, except by mutual agreement and in accordance with the provisions of the Labor Code, internal regulations and collective agreements.

Termination of the working relationship

The termination of the employment relationship by mutual consent, dismissal or by a unilateral decision of the employer within three months following the reinstatement of the suspended employee, obliges the immediate cancellation, in a single payment, of the total benefits to which the employee is entitled. Special requirements are established in cases of termination of employment by mutual consent.

Other measures

The Law establishes guidelines for the calculation of the second installment of extraordinary payment for the XIII month, seniority premium and indemnity, when applicable, as well as the calculation of the maternity leave. In addition, it establishes that the gradual reinstatement of employees with suspended employment contracts may not be used as a measure of retaliation or discrimination. If it is proven that the employer has incurred in this prohibition, sanctions with fines ranging from B/. 500.00 to B/. 1,000.00 for each discriminated worker.

This Law shall become effective as of August 3, 2020, date on which it was enacted.

For further information, please contact María del Rosario de Roux.