Once again, Latin Lawyer 250 recommended Morgan & Morgan as the largest firm in Panama. “A large headcount and an established presence in the market gives Morgan & Morgan the manpower and experience required to guide some of Panama’s most significant transactions”, states the guide.
This 2018 edition looks at each jurisdiction firm by firm and presents a complete analysis of most recent developments, practices and leading professionals field by field.
Partners Juan David Morgan Jr., Francisco Linares, Enrique De Alba, Jazmina Rovi, Inocencio Galindo, Francisco Arias, Ramon Varela, Roberto Lewis, Raul Castro, Ricardo Aleman, Albalira Montufar, Maria Teresa Mendoza, Mercedes Arauz de Grimaldo, Enrique Jimenez and Jose Carrizo, received mentions as key players.
Panama, April 25, 2018. Morgan & Morgan announces forum on “Trends in Labor Matters 2018: What are the new regulations?” to be held on Tuesday, May 29, from 8:00 a.m. to noon at the Titanio conference room of The Americas Golden Towers in Panama City.
The event is addressed mainly to businesspeople, managers, human resources and administration professionals, and general staff of domestic and multinational companies established in the country. The agenda includes new regulations and norms on labor issues that every professional managing human resources should know to comply with the law and avoid risks to their companies.
Lawyers with extensive experience in labor issues will discuss the following:
- Sexual harassment and discrimination within the company and at an education level
Ricardo Aleman, partner at Morgan & Morgan.
- Main issues regarding employee’s paternity: leave and child support
Maria Teresa Mendoza, partner at Morgan & Morgan.
- Features of special privileges: disability and chronic disease
Milagros Caballero, associate at Morgan & Morgan
For information on entries to this forum please contact us at 265-7777 (extension 7746) or firstname.lastname@example.org.
About Morgan & Morgan
With over 80 lawyers and 20 practice areas, Morgan & Morgan is a full service Panamanian law firm, regularly assisting local and foreign corporations from different industries, as well as recognized financial institutions and government institutions. In the labor field, the firm is very active assisting local and international clients in all aspects of labor law, including, drafting employment contracts, collective bargaining negotiations, work permit applications, administrative proceedings, labor litigation and disputes processes, negotiations with employees, restructuring processes, among others.
The Government of the Republic of Panama, through Executive Decree No. 40 of Tuesday, March 20, 2018, orders the closure of public and municipal offices, nationwide, on Thursday, March 29, 2018 (Holy Thursday) at twelve (12) noon on the occasion of Holy Week.
- Terms on administrative procedures are suspended on March 29.
- Banking institutions will be governed by their own parameters.
To whom does this not apply?
It does not apply to the following public offices: Institute of Aqueducts and Sewage Systems (IDAAN), health institutions (both Social Security Offices and the Ministry of Health), postal services, the Fire Department, National Civil Protection System, Transit and Land Transport Authority, Panama Metro, National Service of Migration and the Security Forces. The Panama Canal Authority is also excepted.
Offices of the Judicial Branch
By means of Agreement No. 166 of March 20, 2018, the Court of Justice has decreed the closing of Courts and other Offices of the Judicial Branch throughout the Republic of Panama on Thursday, March 29, 2018, with the consequent suspension of judicial terms during the aforementioned day. Courts will resume activities on Monday, April 2, 2018.
Executive Decree no. 83 of Wednesday, December 27, 2017 has been issued to regulate the Law on Paternity Leave, No. 27 of May 23, 2017, applicable to employees of the private sector and public servants.
Maria Teresa Mendoza, expert in labor law and partner of Morgan & Morgan summarizes below the most relevant aspects of the new regulation:
License term and how it applies
- Paternity leave has a term of three (3) working days.
- Said three working days will be computed from the birth of the child, being at the discretion of the employee or public servant to choose using them at a later time.
- In those cases where the employee or public servant is on vacation, hospitalized or incapacitated when the child is born, he is obliged to notify the birth to his employer so, upon expiration of the condition stated, the three (3) working days are computed under the concept of paternity leave.
- For computation of this leave, working days are understood as follows:
- From Monday to Friday for the private sector and public entities.
- From Monday to Sunday for public companies or entities working 7 days a week, being understood as non-working day the day of weekly rest of the employee and the compensation day of the employee or public servant for having worked on a Sunday or day of rest.
- Holidays or national days of mourning stated in the Labor Code or decreed by the Executive Organ shall be deemed non-working days and computation of the paternity leave will start on the following working day.
- The employee or public servant will declare in his work contract or personal and dependents form, the name of his wife or partner.
- On returning to work, the employee and public servant shall deliver to his employer or institution where he works, the birth certificate issued by the National Bureau of the Civil Registry of the Electoral Court that certifies him as father of the child.
- When there is a difference between Collective Bargaining Agreements, Internal Labor Rules, collective agreements and paternity leave rights under the Law, the rule or condition most favorable to the employee will apply.
- Days granted as leave shall be construed as time effectively worked for computation of the salary, rights acquired and further labor benefits.
- Paternity leaves are granted only once a year.
- The paternity leave is one single period of three days even in case of multiple birth.
This Law modifies the fines that the Ministry of Labor may impose to employers that hire foreign personnel without having a valid work permit, and the employment of minors, without complying with the requirements established in the law.
The fines that the Ministry of Labor may apply when foreign personnel is detected without a Work Permit, will be the following:
- The first time, a US$500.00 fine will be imposed, for each foreign employee without a work permit.
- The second time, a US$1000 fine will be imposed, for each foreign employee without a work permit.
- The third time, a US$10,000 fine will be imposed, regardless of the number of foreign employees without work permit In this case, the Ministry of Labor will also request the Ministry of Commerce and Industries the temporary suspension the Commercial License (Aviso de Operaciones) of the companies or commercial establishments.
- The fourth time, the Ministry of Labor is authorized to request the Ministry of Commerce and Industries for definite cancellation of the Commercial License (Aviso de Operaciones) of the companies or commercial establishments. This action applies notwithstanding the immediate dismissal of all non-authorized foreign personnel, and the obligation of the employer to consign the corresponding payment of the imposed fine, at the Conciliation Cashier in the offices of the Ministry of Labor or delivering it directly to the employee.
- In the case of companies that have 10 or more foreign employees without Work Permit, the amount of the fines will be doubled. The names of these companies will be published in the website of the Ministry of Labor.
- Article 20-A is added to the Labor Code, which establishes the procedure to be followed by the Ministry of Labor for the sanctions.
In addition, Law 59 also modifies article 125 of the Labor Code which establishes the fines for hiring minors in contravention to the law, and sets the fine on US$700.00 for each minor working without the corresponding requirements.
This law will be in effect from its promulgation, on September 14th, 2017
On July 26, 2017, a forum was held in Panama called, “Labor immigration flexibility or restriction, what do we need?” organized by the Panamanian Association of Business Executives. Said forum served as a platform to discuss issues of national interest on legal and practical aspects of work and residence permits for aliens, legalizations and mechanisms in place for immigration control, labor immigration and their effect on human resources management, among others.
Morgan & Morgan was one of the principal sponsors of the event, with outstanding presentations from experts in the labor and immigration fields such as Maria Teresa Mendoza, partner in charge of the Labor Law Department of Morgan & Morgan.
Mr. Jose Carrizo, partner in charge of the Litigation Department, participated as well in his capacity as Chairman of the Juridical Matters Commission of the Association.
On June 21, 2017, the conference on “Risks in hiring job candidates” was held in Panama City, organized by the Chamber of Commerce of Mexico-Panama (Camexpa).
María Teresa Mendoza, partner in the Labor Law Department of Morgan & Morgan, took part as speaker with the theme “Legal aspects in the process of selecting candidates for a job”.
The event brought together a large number of professionals from different fields who are actively involved in the selection and recruitment of human resources in Panama.
Mediante la Ley No. 27 de martes 23 de mayo de 2017 se crea la licencia de paternidad para trabajadores de empresas privadas y servidores públicos.
- La Licencia de paternidad aplica para trabajadores, cuya esposa o conviviente en condiciones de singularidad y estabilidad, se encuentre en estado de gravidez.
- Para acogerse a la licencia de paternidad, el trabajador debe comunicar a su empleador, con una semana de anticipación, la fecha probable del parto.
- La licencia de paternidad será por un término de tres (3) días hábiles, que serán computados como tiempo efectivo de servicio, periodo en el cual el beneficiario no podrá laborar para otro empleador o por cuenta propia.
- El inicio de la licencia se computara desde la fecha de nacimiento del hijo o hija.
- El trabajador queda obligado a presentarle a su empleador el certificado de nacimiento que lo acredita como padre del menor.
- Está Ley está vigente desde el 25 de Mayo de 2017 (día siguiente a su promulgación).
María Teresa Mendoza Vallejo, Partner, Labor Law, Morgan & Morgan
On May 24, 2017, Act 27 of May 23rd, 2017 was published in the Official Gazette No. 28285-B of May 24th, 2017, which establishes the Paternity Leave, applicable both to employees of private sector, as well as to public servants, effective since May 25th, 2017.
This Act, whose initiative was promoted by the Ministry of Labor, is based on the duty of the Panamanian state to protect the family, sacred in our Constitution. Family protection includes paid compulsory leave for pregnant women, known as maternity leave, which in addition to taking care of the mother’s health, seeks to ensure the child’s survival in the last weeks of gestation, as well as guaranteeing she is cared for and tended to by her mother.
This protection for the child has been extended, taking into consideration that the international trend is to promote the participation of men in family responsibilities and child development, with the creation of the Paternity Leave. A recent study entitled Paternity Leave and Parental Leave in Latin America and the Caribbean; Indispensable Tools to Encourage More Parent Involvement in the Care of Sons and Daughters states: “In most Latin America and Caribbean countries, institutional reform is necessary to encourage the incorporation of women into the labor market and to promote greater participation of men in the care of their children. In order for both partners to work in a remunerated way and, in turn, perform parental functions in a shared manner, it is necessary to extend to the male workers the care guarantees that are not linked to the exclusively procreative biological function of women: pregnancy, childbirth and breastfeeding. In this sense, paternity leave and parental leave are useful tools to advance, from the work environment, towards overcoming the old model “male provider and female housewife.” ((1) Lupica)
Paternity leave is more common in developed economies from Africa, Eastern Europe, and Central Asia. However, it has begun to be adopted in Latin American. Countries, such as, Argentina, Brazil, Chile, Colombia, Ecuador, El Salvador, Guatemala, Paraguay, Dominican Republic, Uruguay and Venezuela. Panama, with this new Act, is in tune with the world trends, since until now this concept only existed in some collective bargainings.
Characteristics of the recently approved Paternity Leave in Panama
- Paternity leave applies to male employees and public servants, whose wife or cohabiting partner, in conditions of singularity and stability, is in a pregnant state.
- In order to qualify for paternity leave, the employee must inform the employer, one week in advance, of the probable date of birth.
- The paternity leave will be for a term of three (3) business days, which will be counted as an effective working time, during which period the employee benefited with the license will not be able to work for another employer or for himself.
- The leave will start from the date of birth of the son or daughter, meaning that the employee cannot legally postpone the enjoyment of that leave.
- The employee is obliged to submit to his employer the birth certificate certifying him as the father of the child.
It is important to note that since days of paternity leave are considered according to law, effective working time and, there is no subsidy from the Social Security Fund, it must be the employer who assumes the payment of the salary corresponding to the three (3) business days corresponding to the leave.
This law constitutes a great advance in the subject of gender equality and also benefits the parents, since it allows them to develop a closer relationship with their children from very early on, something that was previously reserved to a greater degree for the mother.
Notwithstanding the foregoing, the text of the Act is really short and leaves some gaps. Among the questions that can arise in the implementation of the leave, is how to prove the condition of singularity and stability of the couple when they are not legally married. The Act does not establish a period of time to determine the stability of a couple, nor what means of proof would be adequate to demonstrate coexistence under conditions of singularity. For example, situations may arise where a legally unmarried couple may have some time living together but they do not meet the requirements for their union to be registered as a de facto marriage or even if they do meet the stability requirement by being together for several years one of the members of the couple may be still legally married to another person.
These gaps should be corrected, in the regulatory decree, which we hope will be issued promptly in order to facilitate the implementation of this Act.
- Lupica, C. (2016). Licencias de paternidad y permisos parentales en América Latina y el Caribe. Herramientas indispensables para propiciar la mayor participación de los padres en el cuidado de los hijos e hijas. Masculinities and Social Change,5(3),295-320. doi: 10.17583/MCS.2016.2083.