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Labor Guide

It has been approved the new law of Telework in Panama, with the purpose of regulate the employment relationship from the employees that performs their functions outside the offices of the employer, from their home address or from a different place rather than the offices of the employer.

This employee, as the word indicates it, performs in a subordinated way accordingly to the instructions of the company or the employer, who will control and supervise their performance, using the Information and Communications Technology (ICT), meaning the resources, computer tools, applications, net works and programs.

The employees that initiate their employment relationship by Telework must subscribe an employment contract, signed in three (3) originals and registered at the Ministry of Employment and Labor of Panama, as established in the law. Said contract must establish the proper agreement from the employee to work by Telework. Between their declarations, in the contract, between others, the employee must confirm that they have the proper installations to perform their functions by Telework.

If the employment relationship already and it has been requested to be change to telework, the employee can accept or decline this change in their employment relationship. Once the parties agree to change to Telework, an amendment to the employment contract must be subscribed and registered in the Ministry of Employment and Labor of Panama, including the declarations included in the law.

Important elements to consider in this law:

  • Telework can be performed partially or complete;
  • The extraordinary journeys will be governed based in what is established in the Labor Code;
  • It can be reversed; hence, the employer can request the employee to be reincorporated in the office;
  • The employee can approve consent to work as a guard, being “on call” for any emergency or situation, outside of their working hours;
  • The employee and employer will agree in the expenses that must be covered by the employer in the domicile of the employee, nevertheless, the expenses will not be considered as part of the salary of the employee.
  • The employer must assume, if needed, the extra expenses of bandwidth speed or network speed in the residence of the employee, in order for the employee to perform their labor activities.
  • The Panama Social Security will cover the professional risk, only if the employee is in the offices of the employer or in their transit from or to the offices of the employer. However, will cover sickness because of the work carried out at the worker’s home or where he performs his duties.
  • The Law establishes that the employer is responsible of the health and professional security of the Teleworker.
  • The Teleworker will have all the rights and obligations, established in the Labor Code, as an employee.
  • Once the employment relationship ends, the Teleworker must return the employer, in the best state, all the technological equipment that was given by the employer to the employee to perform their duties.

 

(2) SUSPENSION OF THE EFFECTS OF THE EMPLOYMENT CONTRACT AND OTHER ALTERNATIVES TO HANDLE THE LABOR MATTERS DURING THE COVID-19 IN PANAMA.

By means of the Executive Decree No. 81 of March 20, 2020, it has been established the existence of the Pandemic COVID-19 and the declaration of State of National Emergency, constituting, for the purposes of applying the temporary suspension of the effects of the employment contract, as a fortuitous event of force majeure.

  • This event implies the non-provision of the service, hence, the non-payment of salary.
  • A request must be send to the Ministry of Labor, who will decide, in the next three (3) business days, the approval or deny of the request.
  • If this term expires and the Ministry of Labor does not decide, it is understood that the request has been approved for all the legal effects.
  • In case the request is denied by the Ministry of Labor, the employer must reintegrate the employees and their payment, at the expense of the employer, as well as the unpaid wages.
  • The suspension of the employment contract does not imply its termination, nor the exempt of the other obligations of the employer or the employees, previously arisen in the employment contract, nor will affect the seniority of the employee.

For this request will be needed:

  • Note or memorial that justifies the suspension of the employment contracts, signed by the legal representative or by the legal attorney of the company, requesting the suspension up to one (1) month, extendable.
  • Copy of the Operation License.
  • Copy of the last pre-elaborated payroll for the Social Security, previous to the closing of the company.
  • Ideal proof of the financial impact.
  • List of employees, which contracts will be requested to be suspended, specifying their complete name, id number, social security number, residential address, occupation, gender, age, telephone number and e-mail address.
  • The memorial/request with all the attachments must be send to the following e-mail address: solicitudes@mitradel.gob.pa.

Ideal Proof.

In the best of our knowledge, it will be needed for those companies that are within the exceptions of the Executive Decree No. 500 of March 19, 2020, requiring the closing of its operations, as a result of the closing of another company that is obliged to its closing.

Meanwhile for the companies that, as a result of the Executive Decree No. 500 of March 19, 2020 are obliged to close their operations, the ideal proof will be the Executive Decree No. 500 as on it, due to the fact that this group of companies are obliged to close their operations.

Nevertheless and attending the different interpretations of the authorities, we recommend providing proof of all the incidents in the operations, as a way of illustration: cancelations of clients, providers, financial statements, accounting certifications, and all the documents and materials that can help the authorities to identify the situation of the company.

 

The following are the other measures that the employer can take, within their possibilities:

  • Sending all the employees of 60 years old or older or that have any chronic disease, such as hypertension, diabetes, VIH, cancer, between others, on a vacation period (even in advance) up to 15 days.
  • Home-office, in where the salary must be paid as agreed in the employment contract. This amendment must be subscribe by the employee and the employer and duly registered before the Ministry of Labor.
  • Work on availability (the work will be done out of the offices, but accordingly to what was agreed in the employment contract). When the journey is reduced, but the employee is on availability, it is considered that the salary must be paid as agreed in the employment contract. This amendment must be subscribe by the employee and the employer and duly registered before the Ministry of Labor.
  • Reduction of the temporary journey with the reduction of the salary, but always respecting the hour rate previously agreed and with the commitment from the employer to agree a gradual recovery plan for the original working journey. It is required the union consent and, if there is no union, the employees consent. To validate this option an agreement named “Temporary Amendment of the Work Journey” must be subscribed in three (3) originals, based in the draft granted by the Ministry of Labor and must be registered in the web page of the Ministry of Labor.

It is important to mention that, all the established measures to mitigate the effects caused by the COVID-19 are addressed to exalt solidarity, empathy and prudence, in order to preserve the source of employment, seeking the welfare of the workers.

  • TEMPORARY CLOSURE OF COMMERCIAL ESTABLISHMENTS IN PANAMA.

By means of the Executive Decree No. 500 of March 19, 2020, an additional sanitary measure is approved, with the objective of reducing, mitigating and controlling the spread of the Pandemic, due to the Coronavirus disease in the Republic of Panama. In this sense, the closure of commercial establishments is ordered, both for companies and individuals, with the exception of the following activities, namely:

  1. The entire chain of production, distribution, marketing and sale of the following:
  • Food: food processing plants, packers and distributors, supermarkets, hypermarkets, grocery stores, packaging and packaging companies and beverage foods.
  • Medicines and hygiene products (Pharmacies).
  • Security Equipment’s.
  • Construction materials (Hardware stores, manufacture and distribution of gas and water tanks).
  • Veterinary and agricultural supplies.
  • Maintenance companies, operation and distribution of medical equipment.
  • Manufacturers of packaging and supplies from all the sectors listed above.
  1. Everything related to maritime, land and air transportation, logistics and the Panama Canal, such as airports, services and repairs to ships, aircraft, ports, customs brokers, Panama Metro, MiBus, contracted transportation to mobilize the employees of companies that can operate exceptionally and that are exempt from the curfew, transport service companies and workshops, wood export transport, transport of fuel and gas, maintenance of cars and auto parts, fuel stations and stations of gas.
  2. Everything related to security (private security).
  3. Licensed lawyers to exercise the defense of people detained during the Curfew period.
  4. Restaurants only for home delivery or take away orders.
  5. Fuel distribution, supply and transport companies.
  6. Everything related to Banking, finance, cooperatives, insurance and other financial services. Including providers of electronic transaction, check and image processing to financial institutions.
  7. Companies that provide public services:
  • Communications and transportation.
  • Call Centers.
  • Gas stations and all companies in the supply chain of liquid and gaseous fuel.
  • Light and electric energy.
  • Industry of generation, transmission, distribution and operation of energy.
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  • Provisioning and distribution of water destined to serve populations.
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  • Private clinics.
  • Veterinary clinics.
  • Funeral homes, cremation rooms, cemeteries.
  1. Construction industry, including manufacturing, distribution and dispatch of concrete, cement and its derivatives, quarries.
  2. Agricultural industry, including agricultural work. As well as the agri-food industry, including food and beverage distribution centers.
  3. Medical-hospital equipment, medications, vaccines and any other items and public health sup lies, including manufacturing, suppliers and maintenance thereof.

Failure to comply with these provisions carries financial, civil and criminal penalties. The closing of the establishments will be effective, starting at 11:59 p.m. on Friday March 20, 2020 and will be in force for a term of thirty (30) calendar days.

 

 (4) HYGIENE AND HEALTH PROTOCOL IN THE WORKPLACE- FOR COVID-19 PREVENTION

By means of the Resolution DM-137-2020 of March 16, 2020, measures have been taken with a view to preserving health and preventing the spread of COVID-19 in the workplace.  Prepared by the Ministry of Health, in conjunction with representatives of the workers’ sector and the business sector.

  • The obligation to establish a Special Health and Hygiene Committee for the prevention and care of COVID-19 is established.
  • The committee will consist of a minimum of 2 to 6 workers, with attention to the number of workers in the company, namely:

Company size                                       Minimum of Committee members

From 2 to 10 workers                                                    2 persons

From 11 to 40 workers                                                  4 persons

From 41 and more workers                                           6 persons

  • It is required an even number of members, in order to be made up of an equal number of worker and employer representatives.
  • Companies that have several branches or different construction projects must have a committee for each one.
  • The Special Committee on Hygiene and Health will operate during the duration of the Pandemic by COVID-19, as indicated by the World Health Organization and the Ministry of Health of Panama.
  • The logbook with the decisions and meetings of the Committee must rest in the Human Resources files.
  • Among its functions are:
  • Keep track of the health of company workers;
  • Complete a log with punctual information of the company’s workers regarding their health, date of travel, if they suffer from chronic diseases, location of their home, if they have been in contact with doctors or people who have traveled, if any family member is quarantined or has tested positive for COVID-19 and in the countries where he/she was in the last 21 days;
  • Ensure that there is a cleaning brigade in the company’s common areas and bathrooms;
  • Ensure that there is access at all times to emergency calls and to line 169;
  • Ensure access to drinking water for proper hydration of all personnel;
  • They must keep staff informed and trained in hygiene protocols, have information boards, send business emails.
  • The Committee may not prescribe medications, nor certify periods of observation, isolation and quarantine, which is solely the responsibility of the country’s health authorities.
  • The worker is obliged to watch over his/her health, respect and abide  the occupational health regulations established by the company.
  • The company will acquire the personal protective equipment and it will be supplied to the workers, as needed.
  • Lunch hours will be coordinated to avoid crowds.
  • Meetings of more than 10 people are prohibited, videoconferences will be encouraged.
  • Travels to the interior and exterior of the country should be avoided.
  • The tools of teleworking, labor mobility, vacations (accumulated or advanced) and the decrees related to the reduction of working hours will be used, based on article 159 of the Labor Code and Decree No. 71 of 13 of March 2020.
  • Pauses of a maximum of 5 minutes per hour will be allowed in the worker’s day to reduce work stress.
  • Other measures must be followed in accordance to the type of commercial activity.

Please do not hesitate to contact us for specific inquiries about your organization’s own commercial activity.

It is important to highlight that all the measures established to mitigate the effects caused by the pandemic of the infectious disease COVID-19 are aimed at enhancing solidarity, empathy and prudence, in order to preserve the source of employment, seeking the well-being of workers.

Author(s)

Miguel Urriola

Partner

Lourdes Bishop

Partner

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