Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Panama (Ratification: 1971)

Article 2, paragraph 1, of the Convention. Inclusion of labour clauses in public contracts. The Committee notes that in reply to its repeated observations the Government refers to two communications Nos DM.359.2008 of 5 May 2008 and DM.374.2008 of 7 May 2008, transmitted by the Ministry of Work and Labour Development (MITRADEL) to the Ministry of the Economy and Finance (MEF) and the General Directorate of Public Contracts, respectively. Under the terms of these communications, MITRADEL wishes to examine, in consultation with the other authorities that are competent in the field, the possibility of adopting additional legislation to harmonize national law and practice with the provisions of the Convention. The Committee regrets that, despite the numerous comments that it has made over the past 25 years, the Government has still not adopted concrete measures and is still at the stage of mere internal consultations. As the Government indicates itself in the above communications, a Bill, which was to bring the law on public contracts into conformity with the provisions of the Convention, has been under preparation for over 15 years and no firm information is provided concerning the current situation with regard to this Bill. The Committee also notes that at the 97th Session of the International Labour Conference (June 2008), the Minister of Labour affirmed at the Conference Plenary that the Government of Panama has included a clause in tenders for the extension of the Panama Canal requiring the enterprises concerned to comply with the principles of decent work for the 7,000 direct jobs to be created.

In this respect, the Committee wishes to refer to paragraphs 44 and 46 of the General Survey that it prepared in 2008 on labour clauses in public contracts, which clarify the relationship between Convention No. 94 and the 1998 ILO Declaration on Fundamental Principles and Rights at Work. As the Committee emphasized, even though Convention No. 94 does not preclude the insertion of other labour clauses, such as those requiring compliance with core labour standards, as reflected in the ILO’s fundamental Conventions, including those aimed, for example, at preventing the use of child labour and anti-union practices, it calls for the insertion of labour clauses of a very specific content. The Convention seeks to ensure that public contracts are executed under conditions of labour which are not less favourable than those established by collective agreement, arbitration award or national laws or regulations for work of the same character in the trade or industry concerned in the district where the work is carried out. This means in effect ensuring the application to the workers concerned of the best locally-established conditions of work. In this manner, the contractor is obliged to apply the most advantageous conditions established in the industrial sector and geographical region in question in relation to wages, including overtime pay, and other working conditions, such as work hour limits and holiday entitlement. The concrete terms of this obligation incumbent on the selected bidder and any subcontractors are to be reflected in a standard contractual clause which has to be effectively enforced, notably through a system of specific sanctions. The Committee also recalls that the Convention applies not only to construction contracts, but also to contracts for supplies and services.

In the light of the above, the Committee urges the Government to take all the necessary measures without further ado to bring national law and practice into conformity with the Convention and requests it to keep the Office informed of any developments in this respect.

With a view to assisting the Government in its efforts to give effect to the Convention, the Committee attaches a copy of a Practical Guide prepared by the Office based principally on the conclusions of the abovementioned General Survey. It also recalls that the Government may, if it so wishes, avail itself of the Office’s technical assistance.