Observation (CEACR) - adopted 2006, published 96th ILC session (2007)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Panama (Ratification: 1966)

The Committee notes the Government’s report, the comments on the application of the Convention made by the National Council of Organized Workers (CONATO) and the National Council of Private Enterprise of Panama (CONEP) and the conclusions and recommendations of the Committee on Freedom of Association in Case No. 1931 presented by the International Organization of Employers (IOE) (see 318th Report, paragraphs 493 to 507), and the report of the technical assistance mission which visited Panama from 6 to 9 February 2006 concerning the application of Convention No. 87, and it welcomes the fact that the Government agreed to extend the mission’s mandate to issues relating to the application of Convention No. 98. The Committee notes the comments of the International Confederation of Free Trade Unions (ICFTU), dated 10 August 2006, which relate essentially to matters that are already under examination.

The Committee raises below the issues to which it referred in its previous observation on the application of Convention No. 98 and the positions of the Government and the social partners as they are indicated in an annex to the report of the technical assistance mission:

Problems indicated by CONATO

(a) Denial of collective bargaining in enterprises established for less than two years (section 12 of Act No. 8 of 1981);

CONEP: Considers that it is reasonable to give space to enterprises established for less than two years to stabilize their situation and that this prohibition of collective bargaining, and indirectly of strikes, is therefore reasonable.

CONATO: Section 12 of Act No. 8 of 1981 provides that it is not compulsory for enterprises which have been established for less than two years to negotiate a collective agreement, with the practical consequence of the rejection of the claims made for this purpose.

Government: if there is agreement between the social partners there is no obstacle to allowing collective agreement in enterprises established for less than two years.

The Committee maintains its previous comments and considers that this restriction on collective bargaining is incompatible with the requirements of the Convention.

(b) Restrictions on collective bargaining in the maritime sector;

CONEP: An appeal has been launched to find this provision unconstitutional and work is currently being undertaken on new legislation respecting maritime labour.

CONATO: As section 75 of Legislative Decree No. 8 of 1998, in contrast with the Labour Code, does not establish the obligation to conclude collective agreements, but provides that enterprises may conclude them, this has in practice led to the denial of workers’ claims for this purpose and therefore the impossibility in practice to call a strike in support of the requirement to conclude a collective agreement.

Government: an application has been lodged for Legislative Decree No. 8 to be found unconstitutional. The outcome of the new ILO Consolidated Maritime Convention is awaited. A draft text of a new Maritime Code will be submitted to the Legislative Assembly in the near future.

The Committee requests the Government to provide the ruling of the Supreme Court of Justice and the draft text of the new Maritime Code.

(c) Collective bargaining with groups of non-unionized workers in the private sector (section 431 of the Labour Code), even where a union exists, in the context of acts of interference by the employer; in particular, the exclusion of claims in certain cases, for example when the union notifies a situation of collective dispute and agreements have already been concluded with representatives of non-unionized workers:

CONEP: It is necessary to comply with the view of the Supreme Court, even though it has not yet been consolidated, that the enterprise may negotiate directly with the workers if the trade union does not hold negotiations.

CONATO: In practice, in violation of the law, groups of non-unionized workers in the private sector are being allowed to exclude unions from exercising collective bargaining by means of alleged accords prepared by the enterprise, as an overtly trade union practice and without there being any real submission of claims by non-unionized workers. As a consequence of these so-called trade union practices (which are flagrant), the agreements in question prevent, for up to four years, trade unions from being able to seek to engage in collective bargaining or to submit claims.

Government: there are no longer problems with collective accords with non-unionized workers, as these practices came to an end in September 2004; the Ministry of Labour does not accept a direct accord if claims have been submitted by the trade unions; if there are two sets of claims (one trade union and the other not from trade unions) the Labour Code establishes a procedure for competing claims (sections 402 and 416).

In view of the differences between the viewpoints of CONATO, CONEP and the Government, the Committee requests the latter to initiate tripartite dialogue on this issue with a view to achieving compliance with the principle that collective bargaining with groups of non-unionized workers should only be possible in the absence of a trade union.

(d) Denial of the right of collective bargaining to public officials not engaged in the administration of the State (section 135 of the Act on administrative careers).

CONEP: Prefers not to give its views on strikes by public officials as it is a matter which lies within the Government’s responsibility.

CONATO: As they are excluded from section 2 of the Labour Code, they are not covered by the right to conclude collective labour agreements, which is not included in the Act on administrative careers. Even though section 135 of this Act affords associations the right of collective bargaining to resolve disputes, there is no specific articulation of this and other provisions to ensure that it is operational, nor is the right to conclude collective agreements recognized.

The Committee notes from the mission report and the information provided by the Government that a draft reform of the Act on administrative careers is under discussion and it hopes that the future law will recognize and regulate the right to collective bargaining of public officials covered by the Convention in a manner which is in full accordance with the latter.

Problems indicated by CONEP

In its previous comments, the Committee noted that the CONEP indicates that the Government has not carried out the reforms requested by the Committee of Experts and the Conference Committee since 2000. Moreover, in its examination of Case No. 1931, the Committee on Freedom of Association observed that Panamanian legislation is not sufficiently clear with regard to certain aspects, that it regulates industrial relations in too much detail which constitutes a significant interference, and it contains provisions that are contrary to the principles to freedom of association and collective bargaining. More specifically, CONEP emphasized various points which were also raised by the Committee of Experts.

(a) The need to amend the legislation so that the payment of wages for strike days is not imposed by the legislation in the case of strikes attributable to the employer (section 514 of the Labour Code) but a subject for collective bargaining between the parties concerned. In this respect, the Committee notes that according to the mission report the positions of the Government and the social partners are as follows:

CONEP: In agreement with the position of the ILO that the payment of wages during strikes should be a subject for negotiation between the parties.

CONATO: This provision should not be amended.

Government: Open to consensus reached by the parties on this issue.

The Committee recalls that provisions which limit the subjects for negotiation between the parties relating to relations between them are incompatible with the Convention.

(b) The need, based on existing standards and procedures relating to conflicts of rights or interpretation, to establish a clear and rapid procedure, involving workers’ and employers’ organizations, to ascertain failure to comply with the legal provisions and the clauses of collective agreements with a view to preventing collective disputes on these issues.

CONEP: A provision should be added establishing a procedure for the resolution of conflicts of rights.

CONATO: This provision should not be amended.

Government: Does not wish to express an opinion but can go along with the consensus reached by the parties; referred to Act No. 53 of 1975 under which collective disputes relating to collective agreements can be resolved.

The Committee observes that Act No. 53 establishes the exclusive competence of the Ministry of Labour and Social Welfare to receive and decide on “requests relating to the interpretation of the law or the validity of clauses concluded in a collective agreement or other accord of a collective nature” and establishes a specific procedure with the participation of the parties to guarantee their right of defence. The Committee considers that it is not necessary to pursue its examination of this matter, unless CONEP provides new elements.

(c) Obligation for the number of delegates of trade unions, employers and employers’ organization to be between two and five (section 427 of the Labour Code);

CONEP: Agrees with the position of the ILO that the parties should determine the number of delegates and advisers in negotiations.

CONATO: This provision (section 427(3)) should remain as it is; in practice it does not raise problems and enterprises often go beyond the statutory number of representatives.

Government: Is open to a possible amendment if there is agreement between the social partners.

The Committee considers that the parties to collective bargaining should be able to negotiate the number of delegates who are to participate in negotiations.

2. The Committee notes the Government’s statements that: (1) on repeated occasions it has expressed its readiness to harmonize national law and practice with these Conventions, but to achieve such harmonization, which involves amendments to the Labour Code, the Government would only be able to promote them if it had the consensus of employers’ and workers’ organizations; and (2) the final report of the technical assistance mission has not yet been received, but it may already be noted that in the meetings held with the social partners the differences between them were significant.

The Committee observes that the positions of CONATO and CONEP are divergent with regard to the amendment of the legislation on the points referred to above, as well as with regard to the possibility of compulsory arbitration at the request of one of the parties (the trade union organization) under section 452 of the Labour Code, which affects the application of Convention No. 98 and restricts the principle of free and voluntary negotiation. It also notes that the Government is prepared to make changes if there is consensus. The Committee wishes to place emphasis on one of the conclusions of the technical assistance mission:

The mission reminded the Government that the process of creating tripartite consensus requires a proactive and committed attitude from the Government in taking the necessary action to achieve this objective. It was in this context that the Minister of Labour announced the decision to hold certain preliminary meetings with workers’ and employers’ organizations (each separately) in the form of seminars or workshops to discuss the freedom of association Conventions and the national provisions for the purpose of which it requested, through the mission, the support of the ILO. In view of its findings, the mission considers it appropriate that this and other technical and operational support should be provided to the Government and the social partners in Panama.

The Committee regrets to note that the divergences referred to above between national law and practice and the Convention have persisted for many years and it recalls the gravity of certain of these divergences. The Committee requests the Government to give effect to its commitments made to the technical assistance mission concerning meetings with the social partners in the form of seminars or workshops with ILO support and to actively promote tripartite dialogue on all pending issues. The Committee hopes that in the near future it will be able to note improvements in the legislation and requests the Government to provide information in this respect and that, in accordance with the commitment given to the technical assistance mission, any draft amendment to the legislation or the industrial relations will not be used to regulate or include other issues.