Nearly 29,000 labor contracts suspended

The Pandemic state of emergency has devastated the Panama economy and caused the temporary suspension of 28,946 labor contracts, according to the Ministry of Labor (Mitradel).

The action by 1,429 private sector companies, which have seen their businesses closed and income is frozen in almost every corner of the country, due to COVID-19.

An Executive Decree No. 81, promulgated in the Official Gazette on March 20, 2020, establishes the bases for temporarily suspending employment contracts

Companies requesting the temporary suspension of labor contracts anticipate difficulties, but are confident of the restoration of favorable business conditions in the future, said René Quevedo, a specialist in the labor market.

However, he warns that, if the critical phase of the country is prolonged, some companies will not survive the crisis.

Mitradel says:  “the suspension of the effects of the contract is a way of protecting the jobs until the state of emergency is lifted. For this time job stability and seniority premium will continue to run ”.

With the suspension of employment contracts, workers are not required to provide the service and employers are not required to pay wages.

Suspended contracts must be activated with the same conditions, starting the day after the state of emergency is lifted.