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Supreme Court rules on the legality of job tenure pacts

14 March, 2025

Introduction

The Supreme Court Through Cassation No. 11726-2020, in which it analyzes the validity of job tenure pacts and their impact on workers’ rights and evaluated fundamental aspects such as the inalienability of remuneration, the proportionality of penalty clauses and the freedom of the worker to decide on his or her continuity in employment.

The case involves a healthcare worker who, after receiving special training funded by his employer, was required to remain with the company for a period equivalent to the length of his training. However, the worker resigned before completing the agreed term, which led the employer to demand the reimbursement of the wages received during his training.

Supreme Court analysis of the permanence pact

The permanence pact is an agreement between employer and worker whereby the latter commits to working in the company for a specific period of time after receiving training financed by their employer. Its purpose is to ensure that the investment in professional training benefits the company and is not lost with the worker’s premature departure.

In its ruling, the Supreme Court emphasized that these agreements must respect the fundamental rights of the worker, especially the right to remuneration that cannot be waived. It also stressed that, although the worker is free to resign, any penalty imposed must be proportionate and in accordance with the principles of equity and labor justice.

Scope and restrictions

The permanence agreement in question contained a penalty clause, which obliged the worker to return the remuneration received during his training period if he decided to resign before the agreed deadline.

However, the Court ruled that this penalty was unconstitutional, as the salary is an inalienable right protected by the Constitution and cannot be subject to repayment. Nevertheless, the ruling left open the possibility for the employer to claim compensation for damages arising from the breach of the agreement, provided that such claim complies with the requirements established in the Civil Code.

Lack of regulation on permanence agreements

One of the problems identified in this ruling is the lack of specific regulation on non-compete clauses in Peruvian labor law. Currently, these agreements are governed in a supplementary manner by the Civil Code, which generates uncertainty about their correct application and limits.

Specialists such as Paul Cavalié, a professor at the PUCP, and Arturo Trelles, a labor lawyer, agree that it is necessary to establish clear rules to balance the protection of workers’ rights and the safeguarding of the employer’s investment in training and specialization.

Application of the Ruling and Recommendations

Although this cassation does not constitute a binding precedent, it does offer a benchmark for how similar cases could be resolved in the future.

In this sense, the ruling clarifies that the return of salaries received cannot be demanded, but a reasonable and proportional penalty could be established in case of non-compliance with the permanence agreement. In this way, it seeks to guarantee that employers can protect their investment in training without violating the fundamental rights of workers.

Conclusion

This Supreme Court ruling represents an important step forward in the interpretation of job tenure agreements, highlighting the need to balance the rights of the worker with the interests of the employer. The ruling reaffirms the protection of the right to remuneration, limiting the use of disproportionate penalty clauses, but allowing the possibility of claiming compensation when non-compliance causes verifiable damage.

Furthermore, it highlights the urgency of specific regulations on long-term employment contracts, in order to provide greater legal security for both employers and workers. Until a clear regulatory framework is established, it will be essential for companies to design these agreements in a balanced way, guaranteeing their legal validity and avoiding provisions that could be declared unconstitutional.

 

Source: https://es.linkedin.com/posts/roberto-vilchez-sanchez_cas-11726-2020-jun%C3%ADn-activity-7239301044646678530--lYG