PANAMA Law and Practice Contributed by: Rafael Rivera, Malvis Mina, Nicole Pérez and Carolina Lino, BDO Panama
require prior union recognition and aim to bal - ance employer-employee relations. While employment contracts are typically for - malised in writing, Panamanian law presumes the existence of an employment relationship in favour of the worker even in the absence of a written agreement, in cases where one person provides a service to another providing there is legal subordination and economic dependence. 4.2 Characteristics of Employment Contracts The key characteristics of employment contracts include the following. • Written form: employment contracts must be in writing, with certain exceptions such as domestic or agricultural work. Nevertheless, it is strongly recommended that all employment relationships be formalised in writing. This is particularly important considering that the Labour Code provides that, in the absence of a written contract, the facts alleged by the employee are presumed to be true. This legal presumption may be used by the employee to distort the facts, potentially placing the employer at a disadvantage – or conversely, allowing the employer to impose excessive service obligations on the employee. • Content requirements: the employment con - tract must include general information about both the employee and the employer, as well as details regarding the employee’s depend - ents or family members. It must clearly define the services to be rendered, the place of work, the type of employment term (fixed- term, indefinite, or for a specific project), the work schedule, and the date and place of execution. The contract must be signed by both parties.
• Formality: employment contracts must be submitted for endorsement to the Ministry of Labour and Workforce Development, or to the corresponding Regional Labour Directorate based on the place of execution. This pro - cess ensures that the contract complies with all legal requirements and is duly stamped by the relevant authority. It is important to note that failure to comply with these formalities may trigger legal presumptions in favour of the employee. While an employment contract always governs and formalises a labour relationship, the existence of such a relationship does not depend on the existence of a written contract to be legally recognised. 4.3 Working Time Panamanian labour legislation does not estab - lish a minimum number of working hours, which allows employers the flexibility to hire workers on a part-time or reduced-hour basis. However, the law does set a maximum working schedule, reflecting the principle that work must be com - patible with the rest and well-being every human being requires. Maximum hours depend on the type of work schedule, as follows. • Daytime work shifts: a maximum of eight hours per day and 48 hours weekly. • Nighttime work shifts: a maximum of seven hours per day and 42 hours weekly. • Mixed work shifts: a maximum of seven hours and a half per day and 45 hours weekly. Nighttime and mixed work shifts are paid for as
a daytime work shift. Overtime Regulation
Overtime refers to any hours worked beyond the employee’s regular schedule. Overtime is regu - lated as follows.
619 CHAMBERS.COM
Powered by FlippingBook