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10 July, 2008
On 28 May, 2008, Peru’s National Assembly passed an outsourcing law, giving full labour rights to contract workers. On 23 June, President Alan García signed the measure into law three days before the bill was set to expire.
There was considerable pressure by employers’ groups to scuttle the bill for fear it would restrict labour market flexibility.
The new outsourcing law will affect 400,000 contract workers, according to the General Confederation of Peruvian Workers (CGTP), one of Peru’s major national labour centres.
Foremost, the law closes down outsourcing “front companies,” which some companies had used to avoid their responsibilities to workers. The new law also holds companies accountable for social security and other benefit payments for one year following the expiration of the outsourcing contracts.
The law sets stricter conditions for registering outsourcing companies, which will now have to have more than one client, and establishes a register of businesses using outsourcing companies, so that the Labour Ministry can monitor and inspect them.
The government’s support of the new law reveals that it is no longer willing to turn a blind eye to the mining industry boom caused by soaring mineral prices, resulting in windfall corporate profits.
The new contract labour law was passed primarily due to pressure from the ICEM’s Peruvian mining union affiliate, FNTMMSP. The ICEM commends the Peruvian union for its diligent work, particularly on behalf of the 85,000 contract workers who work in the country’s important mining industry.