Labor Cassation No. 29553-2024-Loreto has reopened a discussion that appeared to have been settled by the VII Supreme Labor Jurisdictional Plenary: whether the withdrawal of trust in an employee who directly entered a position of trust allows the employment relationship to be terminated without compensation.
The case involved the head of the Human Resources Department, who worked from January 2019 to December 2023, until the company notified him that his appointment was being concluded due to the withdrawal of trust. The majority recognized his right to compensation for unfair dismissal; the dissenting opinion held that the special nature of the position was sufficient to exclude such compensation.
However, the issue should not be reduced to choosing between labor protection and business freedom. The prior question should be what type of rule each provision of the Labor Productivity and Competitiveness Law (LPCL) contains. The thesis of this commentary is straightforward: Article 43 classifies a position within the workplace, but it does not create an independent ground for termination or an exception to compensatory protection (Supreme Court of Justice of the Republic, 2026).
The structure of the LPCL makes this distinction clear. Article 4 establishes a presumption regarding the existence and duration of the employment contract; Article 43 defines management and trust personnel; Article 16 lists the grounds for termination; Article 22 requires just cause for dismissal once the probationary period has been completed; and Articles 34 and 38 establish the consequences of dismissing an employee without stating or proving such cause.
These provisions answer different questions. Article 4 makes it possible to establish what type of employment relationship exists, while Article 43 indicates when the functions performed warrant a special classification. Neither provision, by itself, grants the power to terminate the employment relationship without cost.
The traditional reasoning turns a classification rule into a termination rule: because the position requires trust, it is concluded that the subjective loss of that trust validly terminates the contract. That step is not written into the law. Trust explains the uniqueness of the position, but it does not replace the legal cause required to terminate the relationship without consequences (Supreme Decree No. 003-97-TR, 1997).
At this point, the majority decision corrects an anomaly. Withdrawal of trust is not included among the just causes for dismissal, nor is there any provision excluding these employees from the compensation regulated by Article 38. The exception adopted by the VII Plenary, although reiterated for years, ultimately created an area of unrestricted termination that the legislature had not established.
Even the LPCL itself extends the probationary period for trust personnel, which presupposes that, once this period has been completed, they are entitled to protection against unfair dismissal. The cassation ruling is therefore correct in rejecting the notion that professional classification operates as an advance waiver of such protection.
Its invocation of the right to equality, however, remains incomplete: it does not precisely identify the comparator or explain why the difference would lack objective justification. The conclusion can be supported more directly through the statutory reservation established in Article 27 of the Constitution and the structure of the LPCL: if the law did not establish an exception, the judge should not create one based on the nature of the position.
The majority, nevertheless, takes its argument too far when it states that every withdrawal of trust requires the prior procedure under Article 31 of the LPCL and links this requirement to the presumption of innocence.
That procedure makes sense when a cause related to the employee’s conduct or capacity is alleged, since there are specific allegations against which the employee may exercise a right of defense. In a withdrawal-of-trust situation, no disciplinary allegation is necessarily made; rather, a subjective business decision is expressed.
Characterizing the decision as unfair dismissal does not turn it into a sanction. The technically cleaner approach is different: the employer may decide that it does not wish to maintain a particularly fiduciary relationship, but if it does not invoke a statutory just cause, its decision falls within Article 34 and gives rise to the compensation provided for under Article 38.
The defect lies in the substantive absence of a legal cause that would permit dismissal without cost, rather than in the omission of a defensive procedure designed for allegations that, in this situation, may not even exist.
It is also appropriate to clarify the international legal support relied upon by the judgment. The decision places the right to work under Article 6 of the American Convention on Human Rights, although that provision regulates the prohibition of slavery and forced labor; the relevant regional recognition is found in Articles 6 and 7 of the Protocol of San Salvador.
Furthermore, it cites International Labour Organization Convention No. 158 as part of the protective framework, even though Peru has not ratified it. This Convention may serve an interpretative or guiding function, but it cannot be presented as a currently binding conventional obligation for the Peruvian State.
These inaccuracies do not necessarily invalidate the outcome, which has sufficient constitutional and domestic legal grounds, but they do weaken its external justification. A decision that modifies a criterion maintained by the Supreme Court should be particularly careful in identifying the source, validity, and function of each authority incorporated into its reasoning (Organization of American States, 1988; International Labour Organization, 2026).
The situation becomes even more interesting in light of Constitutional Court Judgment 138/2026, issued only a few weeks later. The majority rejected reinstatement of an employee who had occupied a position of trust from the outset; by contrast, the separate opinion of Justice Pacheco Zerga held that this inability to order reinstatement should not leave the employee without economic protection and proposed recognizing the possibility of claiming compensation.
Rather than necessarily incompatible outcomes, these decisions show that the discussion should be structured around legal consequences rather than general labels.
Labor Cassation No. 29553-2024-Loreto should therefore be read in a precise sense: it does not eliminate the category of trust nor require an employer to perpetuate a fiduciary relationship, but it prevents that category from being used to infer a power of cost-free termination that the law does not recognize.
If it is considered necessary to establish a notice period, a special compensation scheme, or an exclusion, it is for the legislature to do so. Until that happens, the category describes the position; it does not create the cause or eliminate the right to compensation.
References
Corte Suprema de Justicia de la República. (2026, April 20). Casación Laboral N.° 29553-2024 Loreto. Fourth Chamber of Transitory Constitutional and Social Law.
Organization of American States. (1988). Additional Protocol to the American Convention on Human Rights in the Area of Economic, Social and Cultural Rights, “Protocol of San Salvador.”
International Labour Organization. (2026). Countries that have not ratified the Termination of Employment Convention, 1982 (No. 158). NORMLEX.
Peru. (1997). Supreme Decree No. 003-97-TR, Single Consolidated Text of Legislative Decree No. 728, Labor Productivity and Competitiveness Law.
Judiciary of Peru. (2018). VII Supreme Jurisdictional Plenary on Labor and Social Security Matters.
Constitutional Court. (2026, May 28). Plenary. Judgment 138/2026, Case No. 04355-2022-PA/TC.
About the Author
Fiorella Guerrero Salcedo, Partner at Altoria Legal Partners
Fiorella Guerrero Salcedo is a Partner at Altoria Legal Partners with over 10 years of experience in individual and collective labor law. She holds a Law degree from Universidad San Martín de Porres and a Master’s Degree in Strategic Talent Management from Universidad de Salamanca. Fiorella has advised companies across diverse industries on labor policies, legal risk prevention, and regulatory compliance, helping strengthen workplace relations and governance. She has been a lecturer at Universidad Científica del Sur since 2022 and serves as an arbitrator in the Collective Bargaining Registry of Peru’s MTPE. She also actively contributes to labor law research, publications, regulatory analysis, and professional training.
