The law provides for the right of private-sector workers to form and join unions of their choice subject to the union’s registration with the government. Public servants may not form unions but may form associations that can bargain collectively on behalf of members.
The law provides for the right of private-sector workers to strike. The Administrative Career Law grants public-sector employees the same right, when the strike has been deemed legal and when a minimum percentage of workers cover essential positions, as set out in the law. The right to strike does not apply in areas deemed vital to public welfare and security, including the police. The law provides all private-sector and public-sector workers the right to bargain collectively, prohibits employer antiunion discrimination, and protects workers engaged in union activities from loss of employment or discriminatory transfers. It requires reinstatement of workers terminated for union activity.
The law places several restrictions on these rights, including requiring Panamanian citizenship to serve on a trade union’s executive board, requiring a minimum of 40 persons to form a private-sector union (either by company across trades or by trade across companies), and permitting only one trade union per business establishment. The International Labor Organization continued to criticize the 40-person minimum as too large for workers wanting to form a union within a company. The government, private sector, and unions reiterated their support for keeping the figure at 40 individuals.
Similarly, 50 public servants are required to form a worker’s association. Member associations represent public-sector workers such as doctors, nurses, firefighters, and administrative staff in government ministries. The law stipulates there may not be more than one association in a public-sector institution and permits no more than one chapter per province.
In the private sector, the Ministry of Labor’s Labor Code provides that if the government does not respond to a registration application within 15 days, the union automatically gains legal recognition. In the public sector, unions gain legal recognition automatically if the General Directorate for Administrative Public Sector Careers does not respond to registration applications within 30 days.
A majority of employees must support a strike, which must be related to improvement of working conditions, a collective bargaining agreement, or in support of another strike of workers on the same project (solidarity strike). In the event of a strike, at least 20 to 30 percent of the workforce must continue to provide minimum services, particularly public services as defined by the law, such as transportation, sanitation, mail, hospitals, telecommunications, and essential food materials.
Strikes in essential transportation services are limited to those involving public passenger services. The law prohibits strikes for the Panama Canal Authority’s employees but allows unions to organize and bargain collectively on such issues as schedules and safety. It also provides for arbitration to resolve disputes. By law the National Federation of Public Servants (FENASEP), an umbrella federation of 21 public-sector worker associations, is not permitted to call strikes or negotiate collective bargaining agreements. Individual associations under FENASEP may negotiate on behalf of their members. FENASEP leaders noted that collective bargaining claims were heard and recognized, but they reported a lack of changes afterwards, particularly regarding firings without cause. FENASEP discussed structural changes with President Varela to promote equity and provide adequate treatment of the public sector as a sector with established rights like that of unionized groups. During the year FENASEP focused on the following problems: the lack of job stability, the lack of a policy for salary beyond the minimum wage, salary gap and equal pay for men and women, and the lack of indemnity pay for unjustified firings. In 2014 FENASEP assisted in the reinstatement of 40 percent of labor leaders whom the previous administration fired without cause.
Supreme Court decisions recognize that collective agreements negotiated between employers and unorganized workers have legal status equivalent to collective bargaining agreements negotiated by unions. Executive decrees provide that an employer may not enter into collective negotiations with nonunionized workers when a union exists and that a preexisting agreement with nonunionized workers cannot be used to refuse to negotiate with unionized workers. The labor ministry’s Manual of Labor Rights and Obligations provides that unorganized workers may petition the ministry regarding labor rights violations and may exercise the right to strike.
An executive decree protects employees from employer interference in labor rights, specifically including “employer-directed unions,” and mandates that workers be able freely to choose unions, without penalty.
The government lacked sufficient mechanisms to ensure that laws prohibiting employer interference in unions and protecting workers from employer reprisals were adequately enforced. Fines ranging from 100 balboas to 2,000 balboas ($100 to $2,000) can be imposed on employers engaging in antiunion interference, with the fines doubled each time an employer is found to repeat the act of interference. The Ministry of Labor continued its participation in the Labor Foundation, which brings together organized labor, employers, and the government. Since the beginning of the Varela administration in July 2014, the government approved 15 of 17 applications it received for union formations and denied two based on evidence of company owners’ influence. The three main focal points for Ministry of Labor during the year were to create jobs, to ensure that persons with disabilities had access to the workforce, and to address unjustified firings and payment of back salaries owed to workers.
In addition to the court system, the Conciliation Board of the Labor Ministry has the authority to resolve certain labor disagreements, such as internal union disputes, enforcement of the minimum wage, and some dismissal issues. The law allows arbitration by mutual consent, at the employee’s request, or at the request of the ministry in case of a collective dispute in a public service company. It allows either party to appeal if arbitration is mandated during a collective dispute in a public service company. The separate Labor Foundation’s Tripartite Conciliation Board has sole competency for disputes related to domestic employees, some dismissal issues, and claims of less than 1,500 balboas ($1,500).
For public-sector workers, the Board of Appeal and Conciliation in the Ministry of the Presidency hears and resolves complaints. The board refers complaints it cannot resolve to an arbitral tribunal, which consists of representatives from the employer, the worker’s association, and a third member chosen by the first two. Tribunal decisions are final.
Although private-sector unions widely exercised the right to organize and bargain collectively, antiunion discrimination, loss of employment, and discriminatory transfers occurred. Union leaders continued to express concerns about government actions, such as auditing union budgets. There were allegations that Ministry of Labor representatives revealed the names of workers attempting to form a union to their companies, which allegedly then terminated these employees. Employers in the retail industry frequently hired temporary workers to circumvent legal requirements for permanent workers. In lower-skilled service jobs, employers often hired employees under three-month contracts for several years, sometimes sending such employees home for a month and later rehiring them. Employers also circumvented the law requiring two weeks’ notice for discharges by dismissing some workers one week before a holiday. Article 222, Item 1, of the labor code states that employers have the right to dismiss any employee without a justifiable cause before the two-year tenure term. As a result employers frequently hired workers for one year and 11 months and subsequently laid them off to circumvent laws that make firing employees more difficult after two years of employment. This practice is illegal if the same employee is rehired as a temporary worker after being laid off. While employees often encountered this situation during the year, they rarely reported the illegal practice.
While most labor leaders approved of the public-sector conciliation board, some lawyer groups criticized it as a route for circumventing the judiciary, leaving interpretation of labor laws to the discretion of persons who might lack expertise and opening the labor-dispute resolution system to political pressure.