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On December 30, 2019, the Peruvian government issued Emergency Decree No. 044-2019 (UD), which is focused on reinforcing the inspection capacities of labor authorities. It introduces serious penalties for noncompliance, including criminal liability for employers and temporary closure of the workplace.
This is a reaction to two workplace fatalities at a transnational fast-food chain in Peru. The main issues addressed by the UD are the following:
Temporary closure
Temporary closure has been introduced as both a preventive measure and an administrative sanction. Consequently, the labor authorities are entitled to order a temporary workplace closure in the following cases: (i) fatal accident of an employee (or contractor) in the workplace and (ii) obstruction of inspective work involving fatal accidents.
When the closure is applied as an administrative sanction, it can last up to 30 calendar days and include an area of the economic unit or the whole economic unit where the safety violation occurred. If the employer proves that it has implemented improvement measures, the closure time can be reduced by up to 15 days.
The above is currently in force after the regulations of the UD were published on February 10, 2020.
Criminalization of safety violations
An employer that deliberately violates the occupational safety and health (OSH) rules and endangers the life, health, or physical integrity of its employees can be imprisoned for between one and four years. However, if deliberate noncompliance of OSH standards causes the death or grave injury of an employee or third party and this result could have been anticipated, the agent can be imprisoned for between four and eight years in cases of death and three to six years in cases of serious injury. These criminal sanctions are now in force.
Companies may want to update their health and safety management systems and verify their compliance with all current OSH rules in order to prevent workplace accidents from triggering sanctions such as temporary closure or criminal liability.Companies may also want to verify their compliance with health and safety regulations with respect to their contractors and/or subcontractors, as well as consider adding an indemnity clause to services agreements with such contractor companies.
The legal implications of the UD and its regulations are unknown, as more specific guidelines are expected to be issued by the government in order to clarify ambiguities regarding the scope and application of these new measures and sanctions. It is clear, however, that achieving and maintaining compliance with OSH rules will represent a new challenge for all employers in Peru, given that the noncompliance could lead to the temporary closure of the workplace or even criminal sanctions.
Written by Daniel Francisco and Iván Blume of Rodrigo, Elias & Medrano and Roger James of Ogletree Deakins
© 2020 Rodrigo, Elias & Medrano and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.