The law recognizes the right of private-sector workers to form and join unions of their choice subject to the union’s registration with the government, but it prohibits public servants from forming unions. The law permits public servants to form associations that may bargain collectively on behalf of members. The law provides private-sector workers the right to strike and grants public-sector employees a limited right to strike, except for those in areas deemed vital to public welfare and security, including police and health workers. With some exceptions the law provides all private-sector and most public-sector workers the right to organize and bargain collectively, prohibits employer antiunion discrimination, and protects workers engaged in union activities from loss of employment or discriminatory transfers.
The law places several restrictions on these rights, including requiring citizenship to serve on a trade union executive board, stipulating 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 (ILO) continued to criticize the 40-person minimum, stating that was too high 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--a level the ILO considered too high. Member associations represent public-sector workers, such as doctors, nurses, firefighters, and administrative staff in government ministries. The law stipulates that there may not be more than one association in a public-sector institution and permits no more than one chapter per province. The law provides that if the government does not respond to a registration application within 15 days, the union automatically gains legal recognition.
Strikes must be supported by a majority of employees and related to a collective bargaining agreement. In the event of a strike by administrative workers, at least 25 percent of the workforce must continue to provide minimum services. In the case of a strike by workers in “essential public services,” such as transportation, firefighting, mail, and telecommunications, 50 percent of the working force must continue to provide those services.
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.
Law 32, passed in April, eliminates restrictions on collective bargaining that had allowed companies less than two years old and enterprises in export processing zones (EPZs) to refuse to sign collective bargaining agreements. The law obligates those enterprises to bargain collectively and provide 15 (not 35) days of conciliation before a strike is legal; it also extends to EPZ firms the labor code definition of temporary (or “definite”) workers, meaning those who have been employed for less than two years.
Law 30, also passed in April, eliminated restrictions on collective bargaining that Law 29 of 2010 had created in the special economic area in Baru region. In addition, Law 32 creates a special regime for the establishment and operation of free trade zones, which include existing EPZs and some “call centers.”
Supreme Court decisions recognize that collective agreements negotiated between employers and unorganized workers have legal status equivalent to collective bargaining agreements, although collective agreements negotiated by a union have precedence over collective agreements negotiated by nonunionized employees. Executive decrees provide that an employer may not enter into collective negotiations with nonunionized workers when a union exists. However, these decrees had not been tested in court. Based on previous practice, MITRADEL’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 unions be freely chosen by workers without penalty. Two other executive decrees strengthened the ability of workers to bargain collectively by clarifying the criteria for legitimate subcontracting and establishing an enforcement plan to protect the rights of temporary workers.
The government lacked sufficient mechanisms to ensure that laws prohibiting employer interference in unions and protecting workers from employer reprisals were adequately enforced. MITRADEL reported that inadequate personnel resources, large case backlogs, and incomplete or inaccurate information in applications delayed the processing of new registrations within the required time frame.
In addition to the court system, MITRADEL’s Conciliation Board 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, by employee request, or during a collective dispute in a public service company and allows either party to appeal if arbitration is mandated during a collective dispute in a public-service company. The separate 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. If not resolved by the board, complaints are referred to an arbitrage tribunal, which consists of representatives from the employer, the employee association, and a third member chosen by the first two. Tribunal decisions are final.
Union leaders continued to express concerns about government actions, such as auditing union budgets, which they characterized as interference and intimidation. They also asserted that automatic union registration did not occur in practice.
Although private-sector unions widely exercised the right to organize and bargain collectively, antiunion discrimination, loss of employment and discriminatory transfers occurred in practice. Employers in the retail industry frequently hired temporary workers to circumvent labor code requirements for permanent workers. Temporary workers have the same rights established under a collective bargaining agreement as do other employees, except relating to dismissal. 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 a two-week notice for discharges by dismissing some workers one week before a holiday. Employers frequently hired workers for one year and 11 months and subsequently dismissed them to circumvent laws that make firing employees more difficult after two years of employment.
While labor leaders approved of the 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.