Arbitration in labour matters has increased in popularity in Peru since 2011, when Supreme Decree 014-2011-TR, which modified the Collective Labour Relations Law, entered into force. One of the arbitration processes available is facultative arbitration, which is based on the principle that one party's willingness is sufficient to commence the process. Thus, if direct negotiation between parties fails, either party can force the other to engage in arbitration.
The Constitutional Court has held on numerous occasions that employees in management positions or positions of trust can be dismissed if the employer loses trust in the employee. In these cases, the employer must pay indemnity, as loss of trust is not a legal basis for dismissal. However, a recent Supreme Court of Justice decision determined that an employee who has held such a position since the employment relationship began is not entitled to indemnity when dismissed due to a loss of trust.