At a glance
- The Supreme Court has ruled that the five-year document retention period does not limit an employer’s evidentiary obligations in labour proceedings.
- Employers remain responsible for proving compliance with labour obligations, even where older records are no longer retained.
- Failure to produce relevant documentation may be treated as obstructive conduct and create adverse presumptions against the employer.
- The decision, now binding jurisprudence, departs from earlier case law that treated the five-year limit as relevant to evidentiary enforceability.
In Labour Cassation No. 36773-2023 La Libertad, the Fourth Chamber of Constitutional and Transitory Social Law of the Supreme Court (Court) has established a new binding jurisprudential criterion regarding the preservation and evidentiary use of labor documentation. The Court clarified that statutory time limits on document retention do not exempt employers from their burden of proof in labor disputes.
Under current labor regulations, employers are required to retain certain employment-related documents, such as payslips, attendance records and other employment records, for a period of five years. However, the New Labor Procedural Law places the primary burden of proof on employers to demonstrate compliance with labor obligations. Where an employee provides reasonable indications in support of their claim, the employer must rebut this with evidence.
In practice, the interaction between these rules had created uncertainty, with some employers assuming that documentation older than five years was not required to be maintained or produced in litigation.
The Court addressed this issue in a case concerning a claim for overtime payments covering the period from 1991 to 2020. The employer argued that it could not produce attendance records older than five years, relying on statutory retention limits. The Court rejected this position, holding that document retention rules are intended to simplify administrative obligations and do not establish an 'expiry' of evidence in judicial proceedings.
The Court further held that where an employee presents reasonable indications of entitlement, an employer’s inability or refusal to produce relevant documentation may be interpreted as obstructive conduct. This may lead courts to draw adverse presumptions against the employer.
However, the Court emphasised that this does not result in the automatic acceptance of employee claims. Judges must assess each case based on reasonableness, taking into account factors such as the nature of the role, working patterns, changes over time, and other available evidence.
This decision, now recognised as mandatory jurisprudence, marks a departure from earlier rulings of the Second Chamber, which had treated the five-year retention period as a relevant benchmark for limiting evidentiary obligations in relation to historical employment records.
Recommendations
- Review existing document retention policies, particularly in relation to working time, attendance and overtime records.
- Identify potential risk areas where historical documentation may be incomplete or unavailable.
- Consider implementing or enhancing digital archiving systems to improve traceability and long-term accessibility of employment records.
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