A resolution issued by the Supreme Court on May 23, 2013, overruling a people’s action brought by CONCYSSA’s Single Union of Potable Water and Sewer Maintenance Workers against the Labor Ministry to challenge several articles of the Regulations under the Outsourcing Law, has only been published on March 19, 2014.

On October 05, 2011, the Superior Court of Lima declared the people’s action groundless, whereupon the Union filed an appeal. The most outstanding aspects of the resolution issued by the Supreme Court can be summarized as follows:

1) It is possible to confine the Outsourcing Law only to the provision of services or performance of work related to the main activities of user companies. In the opinion of the Supreme Court, supplementary work can be carried out only through labor intermediation agreements, not through outsourcing agreements. We do not share the Supreme Court’s opinion because all activities can be outsourced. However, what is interesting in all this is that the outsourcing of supplementary work may end up being regulated only by the Civil Code.

2) The existence of a plurality of customers is not a requirement to be met in order for work to be validly outsourced; it only shows that they exist. This statement should be analyzed together with other elements, like economic activity, background information, moment at which business activities began, type of activity being delegated, and size of the third party and user company.

3) It is possible for the user company to provide the employees of a third-party company with the facilities or equipment required for the performance of the services or work entrusted to said third-party company, when it is reasonable to do so. In the opinion of the Supreme Court, the reasonable thing to do will be determined on a case-by-case basis by the judge, tacitly considering that the challenged articles of the regulations in question are legal.

4) It is possible for the employees of the third-party company to share work areas at the user company’s workplace, but said employees should be clearly separated, both physically and functionally, from the user company’s personnel.

This resolution sets a binding precedent for work inspectors and judges nationwide, which required compliance with requirements other than those considered by the Supreme Court. It may be convenient to show this resolution when any aspect that the resolution precisely considers legal is challenged.