The termination of employment contracts in Panama is governed by the Panamanian Labor Code. This code outlines the lawful grounds for dismissal, the required notice periods, and severance pay entitlements.

Lawful Grounds for Dismissal

Employers in Panama can terminate employment contracts under the following circumstances:

Termination by the Employer

• For Cause: The employer can dismiss an employee with immediate effect for serious misconduct, poor performance, or breaches of the employment contract. Examples include gross negligence or misconduct, repeated absenteeism, disobedience or insubordination, and revealing trade secrets.
• Economic or Structural Reasons: Employers may terminate contracts due to economic necessity, technological changes, or restructuring, provided they obtain prior authorization from the Ministry of Labor and demonstrate genuine economic grounds.

Termination by the Employee

• Constructive Dismissal: If the employer makes working conditions intolerable or commits serious breaches of the contract, the employee can resign with cause and claim compensation.
• Resignation with Notice: Employees can terminate their contracts of employment while providing proper notice as stipulated in the contract.

Notice Requirements

Notice periods in Panama vary depending on the grounds for termination:

• For Cause: Dismissal for cause usually doesn't necessitate prior notice.
• Economic Reasons: Employers must present their economic justification for dismissals to the Ministry of Labor in advance. The Ministry of Labor may set a notice period in its authorization.
• Resignation: Employees must provide notice according to their contract and tenure. There's no statutory minimum, although 15 days is a common practice.

Severance Pay

Panama has a specific severance pay scheme based on the reason for termination and employment tenure:

• Economic Reasons: Employees are entitled to severance pay based on their tenure when dismissed due to economic reasons.
• Unjustified Dismissal: Employees dismissed without cause are entitled to severance pay and notice period compensation.
• Resignation: Generally, no severance pay is due upon resignation. However, employees are entitled to any accrued vacation pay and a yearly bonus.

Panama's legal framework is designed to protect individuals from discrimination in various contexts, including employment. The laws and regulations in place promote equality and prohibit discrimination based on specific characteristics.

Protected Characteristics

In Panama, individuals are protected from discrimination on the following grounds:

• Race: Discrimination based on race or ethnicity is prohibited.
• Sex: The law ensures equality between men and women and prohibits discrimination based on sex.
• Religion: Freedom of religion is guaranteed, and discrimination on religious grounds is prohibited.
• Political Views: Individuals have the right to express political opinions without facing discrimination.
• Disability: The law promotes equal opportunities for persons with disabilities and mandates accommodations.
• National Origin: Discrimination based on national origin or ethnicity is prohibited under the Constitution.
• Other Characteristics: Laws on gender identity, sexual orientation, and age discrimination are still developing, and certain areas might not have explicit legal protection.

Redress Mechanisms

If individuals experience discrimination, Panamanian law provides several avenues for redress:

• Ministry of Labor (MITRADEL): Employees can file complaints with the Ministry of Labor's Labor Conciliation Board regarding employment discrimination.
• Public Ministry and Ombudsman: Individuals can file complaints about rights violations with the Public Ministry or the Ombudsman's Office.
• Courts: Individuals can pursue legal action in the labor courts or the Panamanian judicial system for cases of discrimination.

Employer Responsibilities

Employers in Panama have a responsibility to uphold anti-discrimination principles:

• Equality Policies: Employers should adopt policies that explicitly prohibit discrimination and promote equality in the workplace.
• Hiring and Promotion: Recruitment, selection, and promotion processes must be fair and non-discriminatory.
• Work Environment: Employers must foster a work environment free from harassment and discriminatory behavior.
• Training: Employers should provide training and awareness sessions for employees on anti-discrimination law to contribute to a respectful and inclusive workplace.

It's important to note that Panama is working to strengthen its anti-discrimination laws and enforcement mechanisms. While a legal framework exists, individuals and employers should be aware of the developing landscape surrounding anti-discrimination in Panama.

Panamanian labor laws establish minimum standards for working conditions, which include work hours, rest periods, and ergonomic considerations. These regulations are outlined in the Panamanian Labor Code.

Work Hours

The typical workweek in Panama is 48 hours, distributed over six working days. This translates to eight hours per day, Monday through Saturday. Overtime work is permitted with the employee's consent and requires additional pay at a rate of 1.5 times the regular wages for the first two hours and double the regular wage thereafter. There are limitations on overtime hours, not exceeding three hours per day and ten hours per week.

Rest Periods

Panamanian law mandates rest periods to prevent fatigue and ensure worker well-being. A minimum uninterrupted rest break of one hour is mandated during the workday, typically between noon and 1 pm. All employees are entitled to a weekly rest period of at least 24 consecutive hours, typically on Sundays.

Ergonomic Requirements

While the Panamanian Labor Code doesn't have extensive provisions on ergonomics, it does emphasize a safe work environment. Employers have a general duty to provide a safe workplace free from health hazards. This can be interpreted to include ergonomic considerations to minimize risks of musculoskeletal disorders. The Ministry of Labor can issue specific regulations concerning workplace safety and ergonomics, although such regulations may not be widely available yet.

In Panama, the Labor Code (Código de Trabajo) and the Ministry of Labor (Ministerio de Trabajo y Desarrollo Laboral - MITRADEL) establish a framework of health and safety regulations that prioritize worker well-being. These regulations outline the obligations of employers, the rights of employees, and the role of enforcement agencies.

Employer Obligations

Employers in Panama are responsible for ensuring a safe and healthy work environment. Their obligations include:

• Risk Assessment and Prevention: Employers must conduct risk assessments to identify potential hazards and implement preventive measures to minimize the risk of accidents and occupational illnesses.
• Safe Work Practices: Employers are required to establish and enforce safe work practices, including the proper use of machinery and equipment.
• Personal Protective Equipment (PPE): Employers must provide necessary PPE to protect workers from specific job-related risks.
• Safety Training: Employers are obligated to train workers on safety procedures, safe work practices, and emergency protocols specific to their roles.
• Reporting Requirements: Employers must report occupational accidents and illnesses to the Ministry of Labor.

Employee Rights

Workers in Panama have fundamental rights concerning health and safety in the workplace:

• Right to a Safe Workplace: Employees have the right to work in a safe and healthy environment free from recognized hazards.
• Refusal of Unsafe Work: Employees have the right to refuse work they believe is unsafe and poses a health risk.
• Reporting Safety Concerns: Workers can report unsafe work conditions and practices to their employers or directly to the Ministry of Labor.

Enforcement Agencies

Several entities are responsible for enforcing health and safety regulations:

• Ministry of Labor (MITRADEL): MITRADEL plays a central role through inspections, investigations of workplace accidents, and issuing sanctions for non-compliance.
• Social Security Fund (CSS): The CSS oversees occupational health aspects and can recommend corrective measures to workplaces with high accident rates.