Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Minimum Wage-Fixing Machinery Convention, 1928 (No. 26) - Panama (Ratification: 1970)

Articles 1 and 3 of the Convention. Minimum wage fixing machinery. The Committee notes the detailed information provided in the Government’s report and the attached documents. It notes, in particular, the adoption of Executive Decrees Nos 240 and 241 of December 2011, which fix the new minimum hourly wage rates by region, economic sector and size of the enterprise. The Committee also notes that by Executive Decree No. 464 of 14 May 2010, the minimum monthly wage for public sector employees was increased from 325 to 375 Panamanian balboas (PAB). It further notes the Government’s information that in revising minimum wage levels, the Ministry of Labour and Labour Development takes into consideration, among others, the general level of wages, cost of living, investment climate, employment situation, economic performance of relevant sectors, and the poverty level. As indicated in the technical study on the revision of the minimum wage for the period 2007–09, the basic purpose of the minimum wage policy is to maintain the purchasing power that allows workers to satisfy their basic needs when prices increase which means that there should be a direct link between the minimum wage and the basic family food basket (canasta básica familiar de alimentos). This indicator is currently calculated on the basis of 50 products of ten different food categories and is meant to reflect the needs of 3.84 persons per family.

In addition, the Committee notes the comments of the National Federation of Public Employees and Public Service Enterprise Workers (FENASEP) dated 24 August 2012 and the Government’s response dated 26 October 2012. FENASEP indicates that, over the past 20 years, the National Minimum Wage Commission has rarely agreed on the revision of the minimum wage and, as a result, it has practically been always the Government that readjusts minimum wage levels every two years. FENASEP indicates that minimum wage increases in recent years do not reflect workers’ needs, with the purchasing power being reduced by 7 per cent in the last ten years. In particular, the much publicized minimum wage increase in 2009 was overtaken in less than a year by inflation and the rising prices of basic consumer goods. In addition, FENASEP stresses that the minimum wage for public employees is no longer aligned to that applicable in the private sector, and that there have been no consultations with organizations representing public employees. FENASEP also indicates that certain categories of public employees, such as municipal employees, are excluded from minimum wage coverage.

In its reply, the Government indicates that whenever new minimum wage rates have been determined for public employees in the last 20 years, they have always applied to all public employees without distinction. It also indicates that the state budget for 2012 has not permitted the alignment of the minimum wage of public employees with that of private sector employees but this will probably be implemented under the 2013 budget. Moreover, the Government denies the allegations that its action is inconsistent with the requirements of the Convention and recalls that the Convention primarily applies to those trades in which no arrangements exist for regulation of wages by collective bargaining and wages are exceptionally low.

Article 5 and Part V of the report form. Application in practice. The Committee notes the statistical information concerning the percentage of the workforce remunerated at the minimum wage rate, the evolution of minimum wage rates, and the number of inspection visits carried out and violations of the minimum wage legislation observed in the period 2009–11. The Committee would be grateful if the Government would continue to provide up-to-date information on the effect given to the Convention in practice, including, for instance, statistical information on the evolution of minimum pay rates as compared to the evolution of indicators such as the consumer price index and the basic family food basket, as well as activity reports and studies of the National Minimum Wage Commission.