Definition of collective dismissal (number of employees concerned):
Economic, technological and structural reasons: concerning more than 10 % of the workers.
See art. 48 LPCL.
[In addition to economic, technological and structural reasons, the LPCL foresees 3 other objective causes for termination of employment, which are not dealt with under this section, namely: a) fortuity and force majeure; b) dissolution, bankruptcy, liquidation proceedings; c) Patrimonial restructuring (See Supreme Decree No 014-99-ITINCI approving the Unified Text of the Law of Patrimonial Restructuring)
Prior consultations with trade unions (workers' representatives):
art. 48 a) and b) LPCL: In case of collective dismissal grounded on economic, technological and structural reasons, the employer first has to notify to workers' representatives and provide them with the relevant information regarding the reasons of the retrenchment and the names of affected workers. Then workers' representatives and employer shall undertake a consultation on alternatives to dismissal (suspension, reduction of working hours...).
If the parties reach an agreement, it will become enforceable.
Notification to the public administration:
Art. 48 a), c), d), e) LPCL.
After consultations with the trade unions begins, the employer shall file an application before the the Labour Administrative Authority [Autoridad Administrativa de Trabajo] based on an expert report that justifies the need for the dismissal.
Once the workers or their representatives have reviewed the report, they have 15 days to present their own expert report. There shall then be a meeting between the employer and the trade unions or workers' representatives under the auspices of the Labour Administrative Authority in order to find agreement on the retrenchment's modalities. In the absence of agreement on the modalities of the retrenchment, the Administrative Authority will issue an binding decision which can however be challenged within 3 days.
Notification to workers' representatives:
Approval by public administration or judicial bodies:
Art. 48 e) LPCL.
Approval is only mandatory in the absence of agreement on the modalities of the retrenchment between the employer and the worker's representatives. In such cases, the Labour Administrative Authority will issue an binding decision.
If an agreement is reached however, it will be legally enforceable.
Approval by workers' representatives:
If there is an approval by the worker's representatives the collective dismissal will take place according to the agreed modalities. In the absence of such approval, the Labour Administrative authority will issue a resolution (art. 48 LPCL).
Priority rules for collective dismissals (social considerations, age, job tenure):
Employer's obligation to consider alternatives to dismissal (transfers, retraining...):
Mandatory consultations on alternatives to redundancies (such as temporary suspension of work, reduction of working hours..): art. 48 b) LPCL.
Priority rules for re-employment:
See art. 52 LPCL: Workers dismissed for fortuity and force majeure or economic, technological and structural reasons have preferential rights to be reinstated if the employer decides to hire, directly or through third persons, new staff to fill similar posts, within a year of the collective dismissal. In the event of non-compliance, the worker is entitled to request, through legal channels, corresponding compensation in accordance with the law.