Peru’s Supreme Court Annuls Ban On Outsourcing Core Business Activities

In a recent landmark decision for employers in Peru, the Supreme Court has annulled Decree 001-2022-TR which prohibited the outsourcing of core business activities. The ruling restores Peru’s outsourcing framework. The employment team at Ius Laboris Peru played a key role in the case. We explore the details below, with insights from Luis Vinatea, Partner at Ius Laboris Peru.

On 6 April 2026, Peru’s Supreme Court delivered one of the country’s most significant case law decisions in the last 20 years. By annulling Supreme Decree No. 001‑2022‑TR, the Court clarified the scope of the country’s outsourcing framework and removed a restriction that had reshaped workforce strategies for many employers. The decision has immediate and practical implications for organisations operating in Peru.

In this article, we outline the background to the dispute, explain the Court’s reasoning and assess the practical impact for organisations operating in Peru. In doing so, we share insights from a recent interview with Luis Vinatea of Ius Laboris Peru who successfully pursued the annulment actions on behalf of the claimants. The full interview with Luis (in Spanish with English subtitles) can be found here.

Background to the dispute

Peru’s outsourcing framework dates back to 2008, when Law No. 29245 was enacted. The law allows organisations to engage third parties to carry out and manage any stage of the production process, provided the contractor operates autonomously, uses its own resources and respects workers’ rights. Workers also retain the right to challenge any infringement of their employment rights before the courts or the labour inspectorate.

As Luis Vinatea explains, outsourcing under this framework became well established:

“From 2008 […] outsourcing was regulated without significant issues and became an established part of the employment and business landscape in Peru.”

However, that position changed in 2022, when Supreme Decree No. 001‑2022‑TR amended the regulations under Law 29245. The Decree introduced a prohibition on outsourcing activities considered part of an organisation’s ‘core business’. As Luis notes, the impact of the change was significant:

“In other words, if a company carried out an activity as part of its core business, that activity could not be outsourced or transferred to a third-party company to carry out those tasks. That prohibition, as set out in the Decree, not in the law, had no basis in the existing legislation, and this gave rise to significant controversy.”

The claims pursued

This restriction was widely challenged by business groups and professional organisations. Three types of proceedings were pursued: 

• More than 500 ‘amparo’ claims were filed challenging the constitutionality of the measure, with the aim of shielding the organisations bringing those claims from its effects. 

• Administrative complaints were also lodged (around 500 in total) seeking a general declaration of the Decree’s illegality. 

• Finally, eight ‘popular action’ claims were brought with a view to having the Decree declared both unlawful and unconstitutional.

The three types of proceedings that were pursued reflect the significance and far-reaching nature of this dispute. Ius Laboris Peru were instructed to represent several of these claimants.

Our firm, and I personally, had the responsibility of contributing to the design of this strategy and taking part in the defence of these cases - in the constitutional sphere, in the administrative sphere, and in the ‘popular action’ proceedings.

Luis Vinatea 

The Supreme Court decision

The three fronts produced different outcomes, but the most significant of all, the ‘popular action’ claims, were resolved on 6 April 2026 by the Supreme Court. The Court found that introducing the concept of ‘core business’ created a restriction that was not permitted by statute.

In particular, the Court found that the decree breached the principle of legal hierarchy. Under this principle, executive regulations may only implement what legislation expressly authorises. They may not introduce new obligations or limitations on their own authority.

Impact of the ruling

The effect of the Supreme Court’s decision is the complete annulment of the Supreme Decree and with it, the restoration of the framework established by Law 29245. 

The ruling addresses long‑standing concerns raised by the business community, which had warned that the ban created legal uncertainty and negatively affected formal employment structures. For Luis, the ruling is significant not only for its outcome, but also for bringing a lengthy and complex dispute to a close:

“This ruling is highly significant because it brings to an end a dispute that has lasted more than four years and, as noted, involved hundreds of administrative and judicial proceedings. […] In Peru today, it is entirely permissible to outsource any stage of the production process, provided this is done through an autonomous company that meets the requirements set out in the law and, above all, that workers’ rights are respected.”

Takeaway for employers

Employers in Peru may again outsource activities that form part of their core business. Organisations should review existing outsourcing arrangements and future workforce strategies in light of the restored legal framework and ongoing compliance requirements.