#Panama 🇵🇦 #LaborAlertBDS: Temporary suspension of the effects of employment agreements has been extended and other provisions enacted

Labor Alert 2020
Executive Decree No. 95 dated April 21, 2020 was published in Official Gazette No. 29007-C dated April 21, 2020, extending the temporary suspension of the effects of employment agreements and enacted additional provisions.
Said extension takes place automatically for a one-month period, that is, thirty (30) calendar days, and applies to temporary suspension authorizations of the effects of employment agreements, which were granted in accordance with the provisions of Article 2 of Executive Decree 81 dated March 20, 2020, and in line with the preventive measures ordered by government authorities under the National State of Emergency. This extension will enter into force on the day following expiration of the suspension of the effects of the employment agreement.

It should be noted that the Ministry of Labor and Labor Development may authorize or deny the petition, or require the submission of additional documentation to the petitioner, where necessary.

Also, companies that fail to submit the extension petition within the timeframe set forth in Article 2 of Decree 95, save for those stated in Article 1, must submit a new petition for the suspension of employment agreement in accordance with the provisions of Decree No.81 dated March 20, 2020.

Any provisions enacted by the Ministry of Labor and Labor Development in connection with the petitions submitted by employers will be notified through the relevant electronic channels.

Companies that have been denied the extension petition for the temporary suspension of effects of employment agreements will be required to pay employees their salaries as from the date in which the Ministry of Labor has made a decision on the concerned petition.

The authorized petitions as a result of administrative silence set forth in Article 8 of Decree 81 dated March 20, 2020 will be deemed granted for a one-month term following the fourth business day after the petition filing date.

As for employees whose agreements have been suspended, they may look for their insertion in the Plan Panamá Solidario through the digital platforms of the National Authority for Government Innovation.

On the other hand, employers may grant meal vouchers to employees whose agreements had been suspended.  This benefit may be granted to all employees, regardless of their salary or position within the company.

It should be noted that these meal vouchers are not considered salary, nor in-kind payments, and therefore will not be subject to deductions or be considered for the calculation of termination benefits; also, under no circumstance will these vouchers be considered as consideration for services rendered by the employee.

Lastly, companies granting meal vouchers to their employees within the National State of Emergency period may set aside for such granting up to five percent (5%) of their annual net income for the 2019 fiscal period.

If you have any questions please email us at: digital@bdsasesores.com, indicating the country about which you are submitting your query.

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