Chapter V, Section One

LAW No. 19
(of June 11, 1997)

Chapter V - Personnel Administration and Labor Relations

Section One - Personnel Administration

Article 82. The special employment regime of the Authority is based on the principles of merit and equal opportunity. There shall be no discrimination by reason of sex, race, age, religion, marital status, political ideology, or physical handicap. Sexual harassment practices are prohibited. The procedures to investigate and apply sanctions for these practices shall be regulated.

Article 83. To ensure a highly qualified labor force based on merit, the designated Office within the Authority will receive applications, determine the qualifications, and test the abilities of those aspiring to positions in the Authority. The Regulations shall establish the organization and policies of the office charged with admitting and testing applicants.

Article 84. An independent administrative mechanism shall be established so that workers in positions of trust, workers, or applicants may individually or collectively file complaints concerning cases of discrimination, so that these may be investigated objectively and the necessary corrective action be implemented. No reprisals may be taken against a worker, a worker in a position of trust, or an applicant for filing such claims.

Article 85. For the purpose of promoting the capability, stability, and productivity of the work force required for the efficient operation of the Canal, the Authority shall guarantee:

  1. Employment, transfers, and promotions shall be governed by merit competition based on the education, qualifications, skills, and experience of the workers or applicants.
  2. Position classification according to the complexity of duties and responsibility of the position and compensation determined by wage scales in accordance with said classification in a manner to implement the principle of equal pay for substantially equal work.
  3. A vacation and leave regime, work hours, compensation for vacations, leave, overtime, work on Sundays and holidays, night shifts, work under environmentally difficult, severe, or hazardous conditions similar to that existing on December 31, 1999.
  4. Performance evaluation programs, incentive awards for outstanding performance, bonuses, and any other productivity-promoting incentive.
  5. Permanent and continuing personnel training and development programs which shall provide education and specialized training to increase productivity, enhance skills, and worker achievement in benefit of the Authority. The Authority shall also provide the necessary training upon introduction of new methods or technologies in the workplace for a better worker and collective performance.
  6. Occupational health, on-the-job injury prevention, and industrial safety programs adequate to meet the needs of employees.
  7. Special physical and psychological rehabilitation and assistance programs.
  8. Payments of compensation and for a permanent reduction in force that results in the termination of the labor relationship, as well as payment for wages lost or unearned because of layoffs or unjustified termination.
  9. A special placement program for workers in positions of trust and workers who have been laid off or downgraded as a result of a reduction in force or who may have been injured on the job or suffered an illness, as well as a program for hiring the disabled.
  10. A freedom of information system, privacy of information, and protection to whistle-blowers of abuse of authority, actions against the property of the Authority, or any other dishonest or unlawful action that in the judgment of the workers and workers in positions of trust must be reported.
  11. A system for filing grievances and the right to appeal personnel actions in detriment of workers in positions of trust and others excluded from bargaining units or for those matters excluded from negotiation in the collective bargaining unit. This system shall be efficient, flexible, fair, economical, and simple, and it may include alternate dispute-resolution mechanisms, pursuant to this Law and the Regulations.

Article 86. If Panamanians and foreigners apply for positions in the Authority, Panamanian citizens shall have preference over foreigners so as not to diminish the working conditions and standard of living of the nationals. A foreigner may be hired in place of a national, with prior authorization by the Administrator, only in those positions where recruitment is difficult, as long as the means have been exhausted trying to find a qualified Panamanian. If only foreigners apply, preference will be given to those married to Panamanian citizens or who have been residing continually in the Republic of Panama for ten years.

Article 87. The principle of job stability is guaranteed to the workers in positions of trust and other workers of the Authority. The labor relationship may only be terminated by resignation, retirement, or removal for a just cause, death, or reduction-in-force.

Article 88. Officials, workers in positions of trust, and workers of the Panama Canal Authority may not conduct partisan propaganda and membership drives on the premises of the Authority, nor use the influence of their positions to serve the interests of any given candidate in the election process, or of the organizations that nominate them. The Regulation shall establish the appropriate sanctions for those who violate this prohibition.

Article 89. Officials, workers in positions of trust, and workers of the Authority shall comply with this Law and the Regulations; and, similarly, the Authority is obliged to maintain order and discipline on the job. The corresponding sanctions will be applied to all workers who deviate from or fail to comply with the standards of conduct or performance required by the Law or the Regulations.

Article 90. Penalties shall be classified as disciplinary measures and adverse actions, and said classification will depend on the seriousness of the offense incurred and the degree of responsibility of the violator. The Regulations shall establish a schedule of offenses and sanctions and a statute of limitations, as well as minimum and maximum sanctions for each offense incurred. The Authority shall apply disciplinary measures progressively, allowing the worker to correct his conduct, except in the case of a serious offense that warrants dismissal.

Sanctions shall be applied without prejudice to any civil or criminal liability that may accrue to the offender arising from the action itself.

Article 91. The Authority shall establish a code of conduct applicable to all officials, workers, and workers in positions of trust. Said code shall address, at a minimum, the following issues:

  1. Misuse of official property of the Authority.
  2. Unofficial activities.
  3. Use of office to obtain personal gain.
  4. Real and apparent conflict of interest.
  5. Gifts and presents from private sources and among workers.
  6. Obligatory disclosure of personal financial status of officials, workers, and workers in positions of trust who are subject to this provision.
  7. Restrictions on certain activities that may be carried out by former workers, workers formerly in positions of trust, officials, and members of the Board of Directors of the Authority.
  8. Nepotism.
  9. Any other inappropriate conduct by officials, workers, workers in positions of trust, and members of the Board of Directors of the Authority.

All Authority officials, workers, and workers in positions of trust must be given mandatory training concerning the Code of Ethics and any changes made thereto.

Article 92. To ensure that the international public service for which the Panama Canal was created is not affected, its operation may not be interrupted, neither fully nor partially, nor impaired in any way. Strikes, slowdowns, and any other unjustified work stoppages are prohibited. If any such actions occur, the Administration of the Authority shall proceed to adopt the necessary measures to immediately restore the service and shall apply the sanctions established in the Law and the Regulations, including that of dismissal.

Article 93. The only mandatory days off for national holidays or memorial days are those provided by law or issued cabinet decrees. On mandatory holidays, an effective work force shall be ensured with the number of workers required for uninterrupted operation of the Canal.

Section Two: Labor Relations