Supreme Court recognizes payment of accrued wages in cases of unjustified and fraudulent dismissal

14 April, 2025

Introduction

The Supreme Court of Peru has broadened the scope of Article 40 of Supreme Decree No. 003-97-TR, recognizing the right to payment of accrued wages in cases of unjustified and fraudulent dismissal, in addition to those already covered by null dismissals. This decision marks a significant change in Peruvian labor case law.

Context of the case

The case originated with a lawsuit filed by a worker who was dismissed in September 2005 by means of a notarized letter. The worker filed an appeal for legal protection, alleging the violation of his fundamental rights. In January 2007, the Constitutional Court upheld his claim and ordered his reinstatement in a position of equal level, but with less physical demands. The reinstatement was formalized in December 2007.

Subsequently, the worker filed a new lawsuit before the labor court, requesting payment of wages and employment benefits corresponding to the period between his dismissal and his reinstatement. The items claimed included bonuses, family allowances, profits, vacations, allowances, compensation for length of service, and legal interest.

Analysis by the Supreme Court

The Supreme Court analyzed whether Article 40 of Supreme Decree No. 003-97-TR, which establishes the payment of lost wages in cases of null dismissal, was applicable to a case in which reinstatement occurred through an amparo proceeding. The Chamber concluded that unconstitutional dismissals—including those that are unprosecuted, fraudulent, or harmful to fundamental rights—lack legal validity, which allows the employment relationship to be considered valid for the entire time the worker was separated.

In addition, it cited case law from the Constitutional Court that recognizes the possibility of applying said article outside the strict framework of the dismissal nullity process. In this regard, the Court pointed out that denying the payment of remuneration in these cases would imply incomplete protection and unequal treatment in similar cases.

In this context, both companies and advisors must assess the impact of the ruling on their defense and labor management strategies. Having accounting and tax advice in Peru or a business lawyer in Lima becomes essential to mitigate legal risks.

Practical implications

This ruling means that workers who are reinstated to their jobs after an unjustified or fraudulent dismissal are entitled to receive payment for the wages they did not receive during the period of separation. This includes salaries, bonuses, family allowances, profits, vacations, bonuses, compensation for length of service, and legal interest.

For employers, this decision represents a significant change in labor case law, as it broadens the circumstances in which accrued remuneration must be paid. It is essential that companies review their dismissal policies and procedures to ensure compliance with the new legal interpretations and avoid potential labor contingencies.

Conclusion

The recent Supreme Court ruling expands the protection of Peruvian workers’ labor rights by recognizing the payment of accrued remuneration in cases of unjustified and fraudulent dismissal. This decision reinforces the importance of ensuring fair dismissal processes that respect fundamental rights, promoting a more equitable and secure work environment for all.

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