Countries › Peru › Guide › 15. Exiting › Closing down and employees: collective termination, final pay and worker rights

Closing down and employees: collective termination, final pay and worker rights

Last verified: 2026-10-28 · Status: Stable

Dissolution, liquidation and bankruptcy are legal objective causes to end all employment contracts, so a closing company does not need individual just causes. Final pay must include CTS (proved paid within 48 hours), proportional gratificación and proportional vacation pay; staff dismissed outside the legal routes can claim 1.5 monthly salaries per year of service, up to 12. In an insolvent liquidation workers rank first, and they have first option to buy the company's assets using their unpaid claims.

USD figures use S/ 3.452 per US dollar, the banking system selling rate published by the Superintendencia de Banca, Seguros y AFP for 27 October 2026, from the Banco Central de Reserva del Perú statistics series PD04640PD. UIT amounts use the 2026 UIT of S/ 5,500 set by Decreto Supremo Nº 301-2025-EF, as listed in the SUNAT UIT table. Conversions are for orientation only.

Key facts

Indemnity for arbitrary dismissal	1.5 monthly salaries per year of service, max 12 textDS 003-97-TR art. 38, as of 2026-10-28 · in force
Closure as cause for terminating all contracts	Dissolution and liquidation, and bankruptcy, are objective causes textDS 003-97-TR art. 46 c), as of 2026-10-28 · in force
Deadline to prove CTS payment after termination	48 hoursDS 003-97-TR art. 51, as of 2026-10-28 · in force
Minimum workforce share for collective dismissal on economic grounds	10 %DS 003-97-TR art. 48, as of 2026-10-28 · in force
Payment of truncated gratificación with all benefits	48 hoursDS 005-2002-TR art. 5, as of 2026-10-28 · in force
First ranking claims in liquidation	Workers pay, benefits and pension contributions textLey 27809 art. 42.1, as of 2026-10-28 · in force

The rule

1. Objective causes for collective termination are force majeure, economic, technological, structural or similar reasons, the dissolution and liquidation of the company and bankruptcy, and insolvency restructuring.Texto Único Ordenado del Decreto Legislativo Nº 728 (Decreto Supremo Nº 003-97-TR, 27 March 1997), Ministry of Labour compendium, Art. 46, 1997-03-27 official text · verified 2026-10-28

2. For dissolution and liquidation or bankruptcy, employment ends once the competent body agrees the dissolution under the Companies Law, or in out of court liquidation or bankruptcy, with the notice period provided in the insolvency rules. Workers have first option to buy the assets and facilities to continue or replace their source of work and may apply their unpaid pay and benefits to the price.Texto Único Ordenado del Decreto Legislativo Nº 728 (Decreto Supremo Nº 003-97-TR, 27 March 1997), Ministry of Labour compendium, Art. 49, 1997-03-27 official text · verified 2026-10-28

3. Collective termination for economic, technological, structural or similar reasons (used when only part of the business closes) must cover at least 10 percent of all staff and follows a procedure: information to the union or workers and the labour authority, negotiation, a sworn statement with an expert report by an auditing firm, conciliation meetings within three business days, and a decision within five business days, deemed approved if silent. The employer may request perfect suspension of work during the procedure.Texto Único Ordenado del Decreto Legislativo Nº 728 (Decreto Supremo Nº 003-97-TR, 27 March 1997), Ministry of Labour compendium, Art. 48, 1997-03-27 official text · verified 2026-10-28

4. The employer must prove full payment of the CTS (severance fund deposits) within 48 hours of the termination, and must notify workers dismissed for economic reasons and make their benefits available.Texto Único Ordenado del Decreto Legislativo Nº 728 (Decreto Supremo Nº 003-97-TR, 27 March 1997), Ministry of Labour compendium, Art. 50 and 51, 1997-03-27 official text · verified 2026-10-28

5. Workers who leave with at least one full month of service receive a proportional gratificación for the full calendar months worked in the current semester, based on pay of the month before termination, paid with all benefits within 48 hours.Decreto Supremo Nº 005-2002-TR, regulation of Ley Nº 27735 (3 July 2002), Art. 5, 2002-07-03 official text · verified 2026-10-28

6. Workers who leave after completing a year and its attendance record without taking vacation receive the full vacation pay; an incomplete year is paid in twelfths and thirtieths for months and days worked.Decreto Legislativo Nº 713, descansos remunerados (dated 7 November 1991), Art. 22, 1991-11-07 official text · verified 2026-10-28

7. A dismissal with no stated cause, or one whose cause is not proven in court, is arbitrary and entitles the worker to an indemnity of 1.5 ordinary monthly salaries per full year of service, capped at 12 salaries, with fractions of a year in twelfths and thirtieths, payable after the probation period.
Example: Worker with 5 years at S/ 6,000 a month: S/ 45,000. / Worker with 5 years at US$1,738 a month: US$13,036.Texto Único Ordenado del Decreto Legislativo Nº 728 (Decreto Supremo Nº 003-97-TR, 27 March 1997), Ministry of Labour compendium, Art. 34 and 38, 1997-03-27 official text · verified 2026-10-28

8. Workers rehired within a year after a collective termination for force majeure or economic reasons have a preference right; the employer must give 15 days' written notice of new hires for the same or similar posts or pay the arbitrary dismissal indemnity.Texto Único Ordenado del Decreto Legislativo Nº 728 (Decreto Supremo Nº 003-97-TR, 27 March 1997), Ministry of Labour compendium, Art. 52, 1997-03-27 official text · verified 2026-10-28

9. In insolvent liquidation, workers' pay, social benefits and unpaid pension contributions rank first, ahead of secured creditors and taxes.Ley Nº 27809, Ley General del Sistema Concursal, as amended by Decreto Legislativo Nº 1050 (dated 26 June 2008), Art. 42.1, 2008-06-26 official text · verified 2026-10-28

Item	Rule	Deadline
CTS	Pay any undeposited CTS	Prove payment within 48 hours
Proportional gratificación	Full months in the current semester, one month minimum	With all benefits within 48 hours
Vacation	Full pay for completed years not taken; twelfths and thirtieths for the incomplete year	With final settlement
Indemnity	Only if the dismissal is arbitrary: 1.5 salaries per year, max 12	On claim
Asset purchase option	Workers can buy assets using unpaid claims	During liquidation

Final settlement items on closure (DS 003-97-TR, DS 005-2002-TR, DL 713)

Worked example

Worked example: a worker earning S/ 6,000 (US$1,738) a month leaves on 31 October 2026 when the company dissolves. Proportional gratificación for July to October (4 of 6 months): S/ 4,000 (US$1,159). Truncated vacation record of 9 months since the last anniversary: 9 twelfths, S/ 4,500 (US$1,304). Plus any CTS accrued since the last deposit. If instead the company dismissed the worker without using the dissolution route and lost in court, the indemnity after 5 years would be S/ 45,000 (US$13,036).
These figures exclude employer contributions and the EsSalud bonus on gratificaciones; see the statutory benefits page.

Step by step

Adopt and register the dissolution agreement first; it is the objective cause for terminating all contracts.
Give written notice to each worker of the termination and its cause.
Compute final pay: CTS balance, proportional gratificación, vacation and any pending pay.
Pay within 48 hours of termination and keep proof of the CTS payment.
Issue work certificates and update the electronic payroll; terminate pension and health registrations.
If only part of the business closes, follow the art. 48 procedure for economic reasons with the labour authority.

Common traps

Dismissing staff before the dissolution is agreed, or without following the art. 48 procedure for a partial closure, exposes the company to arbitrary dismissal indemnities and reinstatement claims.
Unpaid benefits rank ahead of banks and SUNAT in an insolvency and workers can apply them to buy assets, which affects any planned asset sale.
Directors and liquidators who distribute cash to shareholders while labour debts remain unpaid face personal liability.

Sources

← Closing a Peruvian branch of a foreign companyClosing with SUNAT: RUC deregistration, limitation periods and inactive company strike off →

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