As I have lamented on a number of times in the past, Panama's labor laws are challenging for business, especially if you are in the hospitality industry. Imagine trying to run a hotel where staff gets paid 50% more if they work on a Sunday even if you could give them another day off during the week. If that were not bad enough, the law demands a 150% payment if they work on holidays. Yet it is holidays when hotels are the busiest. Again, you cannot just give them an alternate day of the week off in exchange. These and many other in-flexibilities make Panama's labor code a detriment to both the workers as well as investors.
In a meeting I had last year with the minister of commerce he was clear that the labor code was an issue they would not tackle anytime soon, but today, La Estralla carried a story where a number of business organizations have gotten together and made an issue regarding labor laws and it seems to be getting some attention, at least for the Ministry and Economy and Finance.
Here is a machine translation of the story.
PANAMA. The proposal to relax the labor
code in Panama is championed by the business associations that for
years have requested a change to make the country more competitive.
The changes outlined by the Minister of Economy and Finance, Alberto Vallarino,
include among other things, the revaluation of Sunday as the only day
off, cost overruns generated by days 24 hours 7 days a week and
overtime pay .
Under the
current legal text, workers who work a Sunday or any day of weekly
rest, the employer is obligated to pay an additional 50% of that day.
In the case of national holidays or mourning, the mark of the day will be 150%.
Processing Zones
Both Alfredo Burgos, executive director of the National Council of Private Enterprise (CONEP) as the president of the Union of Industrialists (SIP), Juan Francisco Kiener support the motion that the Sabbath is not only on Sunday and set the same to special laws processing zones.
Burgos believes the country is not competitive by not allowing the transfer of employees from one position to another. Also considers unfair to dismiss a worker needs a proven causal aspects that have changed in the special areas.
The executive estimated that the income of employers
and employees should be linked to productivity, an aspect that is not
taken into account in the current code "now if a salary increase, then
it can not be lowered."
Next Monday will
meet CONEP Working Committee to begin addressing the issue in order to
sort the priority issues and critical, and then communicate to the
government.
THE INDUSTRIAL
IAPA president, Juan Francisco Kiener,
adding that among the issues that are less competitive high minimum
wage per capita for the region.
The operator called to copy the model
used processing zones in Costa Rica and Colombia, where a company, even
its location is considered a special area.
He clarified that although the
unions do not have an official document known to apply the mechanism of
processing zones, where the Sabbath is not just on Sunday.
Kiener pointed out that there is an international court ruling that
allows workers who do not wish to participate in a strike, to continue
working. Discard the reform point to stop paying overtime and holidays.
The ruling referred to by Kiener refers to one given in 1999 by the International Labour Organization (ILO) in favor of CONEP, a document that would base the government to propose changes to the code.
"Reforms must address the measurement of worker productivity as a key element to grant wage increases," said Fernando Arango, president of the Chamber of Commerce.
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