20 March 2020 – Executive decree that COVID-19 qualifies as force majeure for labour regulations and employment contracts

Type of Intervention: Executive Order
Sectors Involved: Private Sector and Businesses, Labor force
Level of Jurisdiction: National
Lead People/Agency: Labor Ministry (leading agency)
Private Sector, Unions and Commerce Chambers (implementing)

Overview: Executive Decree 81 that regulates numeral 8 of article 199 of the Labor Code, which establishes the cause of temporary suspension of the effects of the employment contract, by fortuitous event or force majeure, when the temporary stoppage of the company’s activities is caused, establishment or work of the employer. It is decreed that the existence of the COVID-19 pandemic, may be considered as a fortuitous event or force majeure, and the consequent declaration of a State of National Emergency, decreed by Cabinet Resolution No. 11 of March 13,
Said regulations are limited to the employment contracts of those companies whose interruption in operations is a consequence of the measures ordered by the government authorities, and to those establishments whose cessation of operations originates from the closure of other companies, by effect of the national emergency declaration by COVID-19.
The contracts of the workers of the companies whose operations have been closed are considered suspended for all labor purposes, from the date the closure was ordered, which must be authorized by the Ministry of Labor, these workers will be included in the list of beneficiaries of the Executive’s support programs to mitigate the lack of regular income while the clasure lasts.
Upon completion of the declaration of a State of National Emergency, workers will return to their jobs, under the same conditions established in the employment contract in force at the time of suspension. An unjustified verbal dismissal shall be considered if, the employer does not allowes the worker’s return to his job the day after the end of the state of emergency.
Full details here: https://chanis.pa/covid-19-executive-decree-81-panama/

Other links: 1
Type of Justification: Advice of INTERNAL government advisory committee or group, Advice of EXTERNAL expert advisor or advisory committee
Source of Evidence or Justification: International – other, International Labor Organization (ILO/UN)
Evidence/Justification: The protection of workers and their families against a possible infection must be a priority. On the other hand, It is essential to apply measures regarding demand to guarantee the protection of persons liable to lose their income as a result of infection or reduction of economic activity, with a view to boosting the economy. The protection of income also contributes to reducing the reluctance to reveal possible infections, especially in groups of low-income workers who are already in a disadvantaged situation.
On the other hand, institutional and political reforms must be applied. The Covid-19 will have a wide impact on the labor market. Beyond restlessness which causes in the short term for workers and their families, consequent economic crisis will adversely affect the world of work in three fundamental aspects, namely: 1) the amount of employment (both in terms of unemployment as underemployment); 2) the quality of work (with respect to wages and access to social protection); and 3) the effects on specific groups most vulnerable to adverse consequences in the labor market.