2007 Annual Survey of violations of trade union rights - Panama

Population: 3,134,264
Capital: Panama
ILO Core Conventions Ratified: 29 – 87 – 98 – 100 – 105 – 111 – 138 – 182

Economic incentives to companies and the deregulation and increasing flexibility of employment relationships remain barriers to organising trade unions in Panama. Existing unions and associations faced reprisals, threats and de-recognition campaigns when demanding their rights or getting involved in major national policy decisions.

Trade union rights in law

Protections but limitations on organising: Private sector workers have the right to form and join unions of their choice. The Ministry of Labour is legally bound to promote the creation of trade unions where they do not exist. Trade union protection is guaranteed to leaders of unions, including those still being formed.

There are limitations, however. Only a single trade union is authorised per establishment. Trade unions may only open one branch office per province and a minimum of 40 members are required to set up a branch union, a number excessive by international standards. All members of a trade union executive must be Panamanian. Trade union protection only covers 11 union members.

The right to strike: For a strike to be legal, an absolute majority of workers in the enterprise concerned must vote in favour. Strikes can only be called to demand an improvement in working conditions, in relation to a collective agreement or in protest at the repeated violation of legal rights. Strikes cannot be called to protest about government policy, to demand an increase in the minimum wage or to demand union recognition. Federations, confederations and national centres may not call a strike.

A 1996 decree weakened the right to strike by imposing a binding arbitration and conciliation process, establishing a long list of posts in which strikes are banned and giving the Labour Ministry discretion to extend that list.

Trade union rights in the public sector: Public sector workers do not have the right to form unions. Based on the 1994 Civil Service Act, civil servants may form "associations" and engage in collective bargaining, but only if they have a minimum of 50 members, and they can only form one association per institution. The association can in turn form federations and engage in collective bargaining.

The government may put an end to strikes in the public sector by imposing compulsory arbitration. The law requires State employees to provide a minimum service, and the government can requisition at least 50 per cent of employees for this purpose in essential services, the list of which includes transport, thereby exceeding the ILO definition of the term.

Special restrictions: The law governing the autonomous Panama Canal Authority prohibits the right to strike for its employees, but does allow unions to organise and bargain collectively.

In the maquiladoras, all labour disputes are subject to compulsory arbitration. A strike is only considered legal after 36 working days of conciliation are exhausted. If this requirement is not met, striking workers may be fined or dismissed. The law governing Export Processing Zones (EPZs) also applies to call centres.

A 1986 law excluded from the category of "worker" any people who receive raw materials from companies and process them in their homes. They are thereby denied all workers' rights, including the right to form a union.

Trade union rights in practice

Scant protection in the public sector: The Civil Service Act provides little protection, given that in practice only about 10,000 people have civil servant status. The remaining 140,000 public sector workers are, in effect, denied the right to form trade unions.

Deregulation of contracts and freedom to dismiss workers is affecting the right to organise: The deregulation of employment contracts and the flexibility that is spreading in practice has made it more difficult to form trade unions. A 1992 labour law excluded one category of workers from the right to a permanent contract during their first three years of employment. It also denied them the right to form and join trade unions.

In most private companies the majority of contracts are temporary, often of just three months' duration, and they are renewed repeatedly over several years. Given those insecure conditions, coupled with the threat of dismissal, workers mostly decide not to organise themselves in order to hold on to their jobs.

The 1986 and 1995 reforms to the Labour Code grant companies the freedom to dismiss staff for economic reasons and limit the maximum compensation for unfair dismissal to three months' wages. That deregulation indirectly affects the right to organise, since it is common knowledge that the fact of joining a trade union often turns out to be the real reason behind a dismissal, whether or not it is acknowledged as such, and since there is no requirement to justify such decisions there is no legal impediment to companies deploying an anti-union strategy. At the same time, the right to engage in collective bargaining was limited through the imposition of individual arrangements, thereby consolidating the unequal relationship between workers and their employers.

That explains why various sectors including trade, which is one of the key economic sectors in the country, have no trade unions.

Bypassing the unions: Employers are allowed to draw up collective agreements with non-organised groups of workers, because of the interpretation of the law by the administrative authorities and the courts. This happens, say the unions, even where a union exists, and even where a collective agreement already exists. Often companies themselves encourage the forming of parallel trade unions as a way of neutralising the existing union and negotiating collective agreements that suit them better.

The administrative procedures which must be followed before a strike can take place are used to declare strikes illegal. A list of demands may, for example, be considered unacceptable if it involves changes to an existing collective agreement.

A 1998 decree concerning workers at sea and on navigable waterways makes collective agreements optional, rather than obligatory, as is the case for other workers under the Labour Code. The national trade union confederations claim that this loophole is being used to deny workers in the sector the right to bargain collectively or strike in order to demand a collective agreement.

Labour Ministry failing in its task of promoting trade unions: The Ministry of Labour has made no attempt to encourage trade union organising, despite the stipulation to that effect in the law. On the contrary it has failed to react when confronted with violations of the right to organise. As a result it has tacitly contributed to the messages conveyed in the media, most of which support the anti-union policy of managers.

EPZs: There are no collective agreements in the export processing zones.

Violations in 2006

Background: On 22 October a national referendum was held as a basis for deciding whether or not to accept the Panama Canal Extension Project. Many trade union organisations, together with most of the country's labour and people's movements, made the campaign against the extension a priority in 2006. The whole process, which resulted in a vote in favour of the extension, was fraught with disputes, threats and campaigns aimed at denigrating the most militant labour leaders involved in the struggle. In September four union leaders were arrested whilst circulating flyers supporting the campaign to vote "No" in the referendum.

No reinstatement for sacked trade unionists: In 2006, the civil servants' association FENASEP ("Federación Nacional de Asociaciones de Servidores Públicos") repeated its complaints to the ILO against the State of Panama for failing to reinstate the trade union leaders dismissed under the previous administration. The Federation deplores the fact that the government has ignored the ILO's recommendations on this case. Thirty union leaders have still not been reinstated, whilst those working in other state institutions have not been given any back pay for the wages they lost following their dismissal.

In January, the Ministry of Labour and Workers' Development sent letters to the management of the various institutions involved, requesting the reinstatement of these employees; however the request was ignored, including within its own departments. The Ministry of Labour is one of the 15 institutions that had carried out dismissals and has failed to reinstate the three union leaders it used to employ.

Reprisals for demanding rights: The Valores company, a Panamanian subsidiary of Group 4 Securicor, sacked 40 employees on 17 October who had taken part in a protest organised by the Union of Security Agency Workers ("Unión de Trabajadores de Agencias de Seguridad"). The union was calling for better working conditions, wage increases, payment of overtime and improved health and safety conditions. By the end of the year the workers had not been reinstated so the union maintained a permanent vigil outside the company offices for over two months.

Delayed union recognition: On 16 May FENASEP criticised the government for failing to register a civil servants association AFARI ("Asociación de Funcionarios de la Autoridad de la Región Interoceánica"). AFARI had submitted all its official documents the previous December but had not received an official reply by the end of the 2006.

Anti-union campaign by the media: The construction and allied workers' union SUNTRACS ("Sindicato Único Nacional de Trabajadores de la Industria de la Construcción y Similares") criticised what it regarded as various attempts by the media to denigrate trade unions, with connivance from the government and employers.

On 5 March, the national newspaper "La Estrella de Panamá" dedicated its editorial to the elections held by SUNTRACS, making allegations and questioning the activities of the union, which is regarded as one of the strongest, best organised and militant unions in the country.

On 6 March, the various media stations owned by MEDCOM broadcast reports of a peaceful demonstration carried out by members of SUNTRACS outside MEDCOM's buildings aimed at denouncing the campaign that the company had been waging, via its stations, against the people's movements, together with its attacks on the dignity of teachers and its partisan support for the extension of the Canal. According to the leaders of SUNTRACS, these reports were aimed at distorting the demonstrators' aims and, more broadly, at disparaging the union's action and questioning its legitimacy as an organisation.