Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

Protection of Wages Convention, 1949 (No. 95) - Panama (Ratification: 1970)

The Committee notes the information provided in the Government’s report.

Article 1 of the Convention. In its previous comments, the Committee noted that article 142 of the Labour Code, as recently amended by Act No. 44 of 12 August 1995, is inconsistent with the definition of the term "wage" set out in the Convention to the extent that according to its terms various allowances such as productivity premiums, bonuses, ex gratia payments, the 13th-month wage supplement, donations and profit sharing are not considered as wage. In reply, the Government states that its purpose in amending article 142 by Act No. 1 of 1986 was to enhance flexibility and to lower costs without, however, affecting the productivity premiums, bonuses, and other allowances which continue to be received by workers. The Committee hopes that the Government will take whatever steps may be necessary, through the amendment of the relevant provisions of the Labour Code or otherwise, to ensure that wage protection covers all earnings or remuneration, however designated or calculated, in accordance with the terms of the Convention.

In addition, the Committee notes the Government’s statement that the 13th month wage supplement even though a well-established usage constitutes a voluntary act, and that by reason of its gratuitous nature employers may not be constrained to such payment especially when experiencing financial difficulties. The Committee notes, however, that under article 1 of Decree No. 221 of 18 November 1971 establishing the 13th-month as special remuneration for workers, every employer is under an obligation to provide such supplement and therefore it could not be deemed to be a merely discretionary payment or gratuity. The Committee wishes the Government to clarify this point.

Article 4(2). Further to its earlier comments, the Committee notes that there is still no provision in the Labour Code, as last amended by Act No. 44 of 12 August 1995, ensuring that the value attributed to allowances in kind is fair and reasonable as required in the Convention. The Committee understands that in the Government’s view the fact that allowances in kind may in no case exceed 20 per cent of the worker’s total remuneration, as set forth under article 144 of the Labour Code, provides a sufficient guarantee of the application of this provision of the Convention. The Committee wishes to point out, however, that setting an overall limit to the proportion of the wages which may be paid in kind does not in itself resolve the problem of the fair valuation of such allowances and offers little protection to workers from possible exploitative practices. Consequently, the Committee invites the Government to consider the possibility of adopting specific measures to ensure that the value attributed to the goods or services received by the worker or his/her family in the way of food, housing and clothing is fair and reasonable.