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

The Committee notes the Government’s report, the discussion that took place in the Conference Committee in June 2005, the comments on the application of the Convention submitted by the National Council of Organized Workers (CONATO), the National Council of Private Enterprise (CONEP), as well as the comments of the International Confederation of Free Trade Unions (ICFTU) of 10 August 2006 (which mostly refer to the matters previously raised by the Committee). The Committee further notes the conclusions and recommendations of the Committee on Freedom of Association in Case No. 1931 brought by the International Organisation of Employers (IOE) (see 318th Report, paragraphs 493-507), and the report of the technical assistance mission conducted in Panama from 6 to 9 February 2006.

1. The Committee takes note of the main conclusions of the technical assistance mission and, in particular, notes that the Government indicated to the mission that, although it wishes to align its legislation with Conventions Nos. 87 and 98, it is not in a position to push for any reform of the Labour Code that does not have the agreement of both the workers’ and employers’ organizations. Furthermore, it stated that it is aware, however, that a consensus between the workers and the employers is highly improbable, at least in the short term, and states its readiness to embark on a process that would lead gradually to the revision of the offending provisions through measures that would bring the parties closer and eventually secure agreement.

2.  The Committee recalls that its previous comments concern the following issues:

(a)   The authority of the Regional or General Labour Directorate to refer labour disputes to compulsory arbitration in order to stop a strike in a public service enterprise, including when the service cannot be considered essential in the strict sense of the term, such as transportation (sections 486 and 452 of the Labour Code).

(b)   Sections 174 and 178, last paragraph, of Act No. 9 (“establishing and regulating administrative careers”) of 1994, which lay down respectively that there shall not be more than one association in an institution and that associations may have provincial or regional chapters, but not more that one chapter per province.

(c)   Section 41 of Act No. 44 of 1995 (amending section 344 of the Labour Code) which requires too large a membership (ten) for the establishment of an employers’ organization and an even larger membership (40) for the establishment of a workers’ organization at enterprise level.

(d)   Article 64 of the Constitution which requires Panamanian nationality in order to serve on the executive board of a trade union.

(e)   The obligation to provide minimum services with 50 per cent of the personnel in establishments which provide essential public services, which go beyond essential services in the strict sense of the term and include transport, and the penalty of summary dismissal of public servants for failure to comply with the requirement concerning minimum services in the event of a strike (sections 185 and 152.14 of Act No. 9 of 1994).

(f)    Legislation interfering in the activities of employers’ and workers’ organizations (sections 452(2), 493(1) and 497 of the Labour Code) (closure of the enterprise in the event of a strike and compulsory arbitration at the request of one of the parties). The Government gave the mission a copy of Executive Decree No. 32 of 1994 providing for minimum services to safeguard the security of the enterprise and its assets, and maintenance services.

(g)   The requirement of 50 public servants in order to establish an organization of public servants under the Administrative Careers Act. The Government acknowledged that the number is high but pointed out that section 176 of Act No. 9 allows public servants to organize by class (category) or sector of activity, and the Committee asked the Government to take steps to amend the legislation with a view to reducing the minimum number of public servants required to establish organizations.

(h)   Denial of the right to strike of workers engaged at sea and on inland waterways (Act No. 8 of 1998), and in export processing zones (Act No. 25). The Government stated that No. 15 of indent B of section 49-A of Act No. 25 of 1992, grants workers in export processing zones the right to strike; and that with regard to the right to strike of seafarers regulated by Decree No. 8 of 1998, the Supreme Court of Justice is currently hearing a complaint alleging unconstitutionality. The Committee asked the Government to send both texts and a copy of the above Court’s decision.

(i)    Federations and confederations prohibited from calling strikes (prohibition of strikes protesting against problems relating to economic and social policy; strikes not related to a collective agreement in an enterprise are unlawful). The Committee pointed out that federations and confederations should have the right to strike and that organizations responsible for defending workers’ socio-economic and occupational interests should, as a rule, be able to use strike action to support their positions to seek solutions to problems posed by major social and economic policy trends which have a direct impact on their members and on workers in general, in particular as regards employment, social protection and the standard of living (see General Survey on freedom of association and collective bargaining, 1994, paragraph 165). The Committee asked the Government to take steps to amend the legislation with a view to bringing it into line with these principles.

(j)    Disaffiliation of FENASEP from the Trade Union Convergence Confederation by decision of the authorities. The Government indicated previously that public servants are governed by the Act respecting administrative careers and considered that they must join homologous organizations of public servants. The Committee pointed out that although basic‑level organizations of public servants may be restricted to this category of workers, such organizations should, nonetheless, be free to join federations and confederations of their own choosing, including those which also group together organizations from the private sector (see General Survey. op. cit., paragraph 193). The Committee requested the Government to take measures to amend the legislation with a view to bringing it into line with the abovementioned principle. The Committee requested the Government not to prevent the affiliation of FENASEP with the Trade Union Convergence Confederation.

(k)   Denial to public servants of the right to form unions. The Government indicated previously that CONATO’s interpretation was inconsistent with reality; the right of association of public servants is recognized in Act No. 9 of 20 June 1994 and, in practice, FENASEP operates in the same way as any other private sector organization and participates in CONATO and the International Labour Conference. The Committee emphasized in earlier comments that, irrespective of the wording used, the decisive factor is that the associations in question enjoy the rights set out in the Convention. The Committee notes that FENASEP informed the mission that it was negotiating with the Government the text of a Bill to reform the Administrative Careers Act in part.

(l)    Denial of the right to strike to public servants. The Government indicated previously that the Constitution allows special restrictions in cases determined by law. The Committee recalls that prohibition of the right to strike in the public service should be limited to public servants exercising authority in the name of the State (see General Survey, op. cit., paragraph 158).

(m)  Denial of the right to strike in enterprises which have been in existence for less than two years (Act No. 8 of 1981). CONATO pointed out that under section 12 of the Act, no employer shall be compelled to conclude collective agreements during the first two years of an enterprise’s operation and that the general legislation permits strikes only in pursuance of collective bargaining or in other limited cases. The Committee asked the Government to provide its comments on this matter.

(n)   Need for the support of the majority of the workers in the enterprise, shop or establishment to call a strike (section 476(2) of the Labour Code). The Government indicated previously that it considered the restriction to be justified by the effects produced by strikes under the national legislation (closure of the enterprise, prohibition upon the conclusion of new employment contracts, etc.). The Committee takes due note that the Government and the social partners indicated to the mission that at the third meeting of the union assembly, the requirement is for a simple majority of voting members.

3. Concerning these abovementioned issues, the Committee notes the following positions of the social partners as indicated to the technical assistance mission. In this respect:

–      CONEP indicated that: (a) transport must be kept among the public services because its interruption in the event of a strike would paralyse essential services, including those carried on by public employees; arbitration at the request of only one of the parties is not compatible with the Convention; (b) prefers not to comment on this matter; (c) a minimum of 40 workers to establish a union is reasonable; the minimum number of employers to establish an employers’ association should be four; (d) it is not the time to amend the Constitution. It prefers not to comment until it has analysed the value of an ILO Convention as compared to the Constitution. In practice, employers form chambers, not organizations and these are governed by civil law, although employers’ associations are envisaged in the Labour Code; (e) prefers not to comment on this matter; (f) in the event of a strike, the right of access to the enterprise of management staff and the freedom of non‑strikers to work should be safeguarded; (g) prefers not to comment on this matter; (h) legislation has been challenged as unconstitutional and work is under way on new legislation to govern work at sea; (i) prefers to maintain the status quo, i.e. that such strikes are illegal; (j, k, l) prefers not to comment on these issues; (m) that it is reasonable to allow enterprises with less than two years’ standing enough breathing space to establish themselves, so the prohibition on collective bargaining and indirectly, on strikes, is reasonable.

–      CONATO indicated that: (a) transport should be removed from the list of public services for the purposes of this section. Furthermore, they do not agree with ILO’s position against compulsory arbitration at the request of the workers; (b) prefers to maintain trade union unity at public institution level; (c) the minimum number of workers to establish a union should be 20. Employers should be able to establish associations with four members; (d) the trade union movement has no interest in amending this rule; (e) transport should be removed from the list of essential public services; (f) these provisions should not be amended. The ban on employers’ admission during strikes should be maintained; (g) the number 30 should be replaced by 40 but the phrase “but no more than one chapter per province” should be deleted because it constitutes a restriction; (h) maritime sector: unlike the Labour Code, section 75 of Legislative Decree No. 8 of 1998 lays down no obligation to conclude collective agreements but allows enterprises to conclude them, which in practice has led to claims of this kind being rejected, so that it is in fact impossible to call a strike in support of a demand for a collective agreement; (i) trade union organizations of different levels should have the right to strike in their various areas of competence, including against the Government’s economic and social policy; (j) any restriction on federations and confederations joining other organizations of their choice should be eliminated; (k, l) the public sector being excluded by section 2 from the Labour Code, it is not covered by the right to conclude collective labour agreements as there is no such right in the Administrative Careers Act. Although section 135 of the Act gives associations the right to collective negotiation in disputes, there are no specific provisions allowing this right to be put into effect nor is the right to conclude collective agreements recognized. Furthermore, the restrictions in section 183 prevent exercise of the right to strike in a collective conflict of interests; (m) section 12 of Act No. 8 of 1981 establishes that there is no obligation to negotiate collective agreements in enterprises that have been in existence for less than two years, which in practice means that any grievances that include such claims are rejected. In other words, not only is the right to collective bargaining of workers restricted, but exercise of the right to strike to support a demand for a collective agreement is prevented.

–      Concerning export processing zones, the Committee notes that CONEP points out that workers in exports in processing zones may call strikes if they have industry unions. CONATO indicates that, since Act No. 25 of 1992 likewise establishes in section 49, paragraph B, No. 9, that enterprises may not conclude collective agreements, the same occurs as in the maritime sector, i.e. workers may not call a strike to support a claim to a collective labour agreement. The Government states that there is a new Bill on export processing zones. The Committee requests the Government to communicate a copy of the new legislation as soon as it is adopted.

4. The Committee notes the Government’s statements that: (1) it has repeatedly stated its readiness to align national law and practice with these Conventions, but to do so implies amending the Labour Code; it would be in a position to promote such amendments only with the agreement of the employers’ and workers’ organizations; (2) the final report of the technical assistance mission has still not been received, but it can already say that at the meetings the mission held with the social partners, there were glaring differences in the views of CONEP and CONATO regarding amendment of the Labour Code to take account of the points made about Conventions Nos. 98 and 87; and (3) it is awaiting the mission’s final report.

5. The Committee observes that some legal provisions might be reformed in the very near future in so far as the Government, CONATO and CONEP are not opposed to them. Such amendments include: (1) reducing to four the number of employers needed to establish an employers’ association; (2) removing the restriction on the free affiliation of associations of public servants to other trade union organizations, particularly those of a higher level, grouping public servants and other workers; (3) the possibility for associations of public servants to have more than one chapter (section) per province.

The Committee notes with regret that the abovementioned discrepancies between law and practice and the Convention still exist after many years, and that some of the restrictions that the Government does not wish to eliminate are serious, for example, the imposition by law of trade union unity for public institutions, the legal requirement that trade union leaders must be Panamanian and the fact that the law does not allow strikes against the Government’s economic and social policy. The Committee requests the Government to fulfil its commitment to arrange meetings with the social partners in the form of seminars or workshops with ILO support and actively to promote tripartite dialogue on all pending issues. The Committee expresses the hope that it will be in a position in the very near future to note improvements in the legislation, and requests the Government to keep it informed in this regard and, in accordance with its assurances to the technical assistance mission, to ensure that the proposals to reform the trade union legislation are not used to regulate or include other issues.

The Committee is addressing a direct request to the Government on the complaint challenging as unconstitutional Legislative Decree No. 8 of 1998 concerning the right to strike of workers engaged at sea and on inland waterways, on the draft reform of the Act on export processing zones (World Trade Zones Bill) and on the Bill to reform the Administrative Careers Act in part.