Mutual agreement termination in Peru: what to sign and what not to

What mutual agreement termination is

“Termination of the employment relationship by mutual dissent” (mutuo disenso) is one of the causes of extinction of an employment contract recognized in Article 16 of Supreme Decree N° 003-97-TR (the consolidated text of Peru’s Labor Productivity and Competitiveness Law). Unlike an unfair dismissal, which is a one-sided decision made by the employer, mutuo disenso is presented as a bilateral agreement: both the worker and the employer freely decide to end the employment relationship.

The law is brief but clear on one formal point: under Article 19 of the same law, “the agreement to end an employment relationship by mutual dissent must be recorded in writing or in the final benefits settlement.” In other words, a verbal understanding is not enough; it must be documented in a signed record.

Why this arrangement creates risk for the worker

In practice, some employers use mutuo disenso as an alternative to a dismissal that would be costly or legally risky for the company (for example, when there is no clear just cause to fire the worker). By framing the exit as “by mutual agreement,” they try to avoid paying the unfair-dismissal indemnity and reduce the chance the worker will sue afterward.

This can lead to undue pressure: surprise meetings, documents presented for immediate signature, ambiguous wording, or veiled threats of a “for-cause” dismissal if the worker refuses to sign. Peruvian labor case law (Supreme Court cassations and criteria discussed around Constitutional Court rulings) has in various cases held that, if it is shown the worker’s consent was not genuinely free, the mutual-agreement termination can be declared invalid and the end of the relationship treated as a disguised dismissal, entitling the worker to the corresponding indemnity.

What can never be waived

Article 26 of the Peruvian Constitution recognizes the non-waivable nature of labor rights recognized by law. This means that even if a worker signs a mutual-agreement termination document — even one drafted clearly and in good faith — they cannot validly “waive” benefits already earned during the employment relationship, such as severance pay (CTS), bonuses, truncated vacation pay, or pending profit-sharing. A clause stating “I have nothing further to claim” does not erase those debts if amounts were actually miscalculated or left unpaid.

What to check before signing

Before signing any mutual-agreement termination document or a settlement that includes one, it’s worth checking: that the text is clear about the voluntary nature of the agreement; that it isn’t being used to cover up a dismissal; that you’re given reasonable time to review it (ideally with legal advice); and that the calculation of your labor benefits settlement is complete and correct before you sign. If you notice pressure, threats, or inconsistencies, you can go to SUNAFIL or consider a labor claim to have a court determine whether what really happened was an unfair dismissal disguised as a mutual agreement.