As the week ended, the government was preparing legislation (a supreme decree) that would facilitate the suspension of labour contracts given the economic difficulties facing firms. This would deny workers the right to remuneration so long as the suspension lasts. Known as licencia sin goce de haber, this would apply to workers in certain circumstances. It would mean that the working relationship between firm and employee would not be broken, only suspended.

Legislation in force since 1994 (during the time of Fujimori) allows firms to suspend contracts in cases where an employer is unable to continue paying some or all of his/her employees. The labour ministry is obliged to inspect the company concerned to evaluate whether the measure is justified.

Confiep, the private-sector confederation, has in recent weeks urged the government to enable employers to suspend work contracts up to a maximum of 180 days. Confiep has constantly tried to put pressure on the Vizcarra government to ‘flexibilise’ labour legislation to make it easier for companies to fire workers at will.

It would appear that it is seeking to take advantage of the Cofid-19 crisis to this end. The reaction of trade unions, predictably, is to fight such proposals and to protect job stability at all costs.

A number of lawyers point out that the assurances given by Labour Minister Sylvia Cáceres that firms receiving state aid in other respects cannot apply for suspension of labour contracts are not reflected in the legislation.