According to this new criterion, the failure of a company to grant paid vacation leave to an employee in the year immediately following the year in which they acquired the right is a violation, which cannot be remedied by payment of vacation remuneration and indemnity. Consequently, the company may be sanctioned by SUNAFIL if the infraction is discovered during an inspection (SUNAFIL has four years from when the infraction was committed to inspect it).

The court reasoned that allowing payment of vacation remuneration and indemnity in lieu of providing actual vacation entitlement is not in accordance with our legal system because it unjustifiably equates two issues that have a different legal nature: the economic benefits paid in the employment relationship and working time.

This criterion conflicts with the one provided in Superintendence Resolution No. 167-2019-SUNAFIL, which establishes that, "The non-enjoyment of the effective vacation rest is remedied by the payment made by the employer of the concepts referred to in Article 23 of Legislative Decree No. 713".

Recommendations

• Review the personnel's vacation records to schedule vacation leave in a timely manner and avoid the expiration of the corresponding leave.
• When it is identified that employees will not use their vacation leave on time, promote the timely signing of vacation reduction agreements (vacation "buyouts") to reduce the amount of vacation leave that may expire.
• When expired vacation leave is identified, proceed with the payment of vacation pay and vacation indemnity as soon as possible. This eliminates incentives for employees to file complaints against the company.

We hope that this information is of relevance to you and your company. Should you require further information, please do not hesitate to contact us.

Click here to read the Spanish version.

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