Panama: Changes to Labor Code Approved

The National Assembly approved in third debate the draft law establishing temporary employment protection measures in companies affected by covid-19.

Friday, July 31, 2020

The initiative presented by the Executive received several modifications in its original content, both in the first and second debate, leaving the deputies with the reservation that these are temporary rules and are not intended to a future reform of the Labor Code, the Assembly reported.

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Laestrella.com.pa reviews that "... The deputies approved the bill and it will now be passed by the Executive for approval. On the edge of the Legislative, workers protested in rejection of the modifications to the Labor Code."

The approved bill establishes that it is prohibited to hire new workers in the same or similar position as a worker with a suspended contract so as not to violate the right to return to work. The hiring of new positions will only be allowed if the companies require it.

An official statement dated July 30th states that the modified articles "... refer to the fact that the employer will gradually reintegrate its workers with suspended contracts, considering the recommendations of the Special Committee on Health and Hygiene and taking into account the health provisions issued by the competent authorities. The workers who are not reinstated, with the opening of the companies, will maintain their contracts which will be extended, each month, until December 31, 2020, in accordance with the procedures established, for such purpose, by the Executive Branch, through the Ministry of Labor and Labor Development. In these cases, the figure of administrative silence shall not apply."

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