Panama Labor Laws – Employee Complaint Process

Panama Domestic Help - It is very common to receive a labor complaint from a domestic worker after you terminate them. If you are a foreigner plan on complaints from everyone working for you, count on it and you will rarely be disappointed. It is also common for Panamanians to have complaints from domestic workers.

The Pre-Complaint Scenario in Panama - The employees are coached as to how to do this by friends, lawyers and others. They will try to get any money owed to them from you before they file the complaint. They will be nice, or pushy depending. The way to stop the trouble from starting is to ask them to sit down and write out what they owe you and what it is for. Give them a pen and paper and patiently wait there. If it is resembling anything similar to reality say if I pay you this will you sign a paper that says I have been paid in full and exonerate you of any further claims pertaining to working there? If they refuse you should pay them what you believe is owed to them and that is it. If they agree then pay them, get a receipt and have them sign the document. You really should have a lawyer do this in that you may word it incorrectly and you may not know what you really owe the employee. Remember giving them any money without a full release is going to not stop a claim and it may provide the money for them to pay a lawyer to file a claim. Also remember failing to pay them what is really owed them including the thirteenth month pay, benefits, vacation pay etc can prevent you from taking further measures described below. Don’t give in to a frivolous claim but don’t withhold the pay that is coming to them either.

Panama Employee Termination Process - The law is in favor of the employee and you must have your act together to win and by that what is meant is a good paper trail. If you terminate an employee without good cause and do not pay them thirty days wages there is a problem for you. If you terminate with cause you need to document it. Write letters to the file with specifics and dates and get them to sign it if possible. Give them written warnings, notices etc to build up a case. The employee will often get whatever money they can from you and file a complaint within hours. This of course can ruin the chances of you ever giving this person a favorable reference. Never give the employee a letter of reference until after you have a full release signed by them. You have bargaining chips and hold onto them and play them to your advantage but do not withhold what is really coming to the worker. If the worker stole or ran up your phone bill or failed to perform the duties assigned to them, or failed to show up for work a lot, came late, left early etc and you fired them that is just termination and you can act accordingly. You do not have to keep a thief there for 30 days or pay them 30 days severance. Document everything.

Panama Complaint Process – The first level is a filing at a labor arbitration board that will try to arbitrate a settlement. This is not a court and the decisions are not binding. The employee will get a paper from this agency by just claiming you owe them money. You can pay the amount of the claim or go to the arbitration hearing. You can attempt to change the date further down the road. Your ex-employee probably needs the money and is going to be focused on getting money out of you fast instead of going out and looking for a job. You can chose to not show up the first time and they will reset it for another date and then you need to show up the next time. You should have a lawyer and bring all your paperwork. You may get a favorable finding and go for it and settle or you may not. If you refuse to abide by this finding then the case would need to go to a real Panama Court. This will take time for a trial date and be expensive for you and the ex-employee. The contingency lawyer may not like this so much unless the employee worked for you for many years and there is a lot of money at stake. The ex-employee will not like this because there is going to be a delay and now they have to resort to real work for money. Remember these belligerent claim filing employees take advantage of employers all the time. The department of labor people protects the rights of the workers vigorously. 80% of the cases at the arbitration level are decided in favor of the employee. The workers who use the system love to manipulate the law and take advantage of the employers so you better have your bases covered with a lawyer doing your contracts. Do consult your lawyer before you alter or modify any portion of the job description or pay. These employees will seem nice and cheerful and then drop on you out of nowhere. It is a way of life to them to abuse the employee protective labor laws.

Panama Labor Lawyers – What is going on here is contingency in many instances. Contingency is the curse of any legal system anywhere resulting in frivolous litigation without fail. If you had a domestic worker for say eight years and some benefits or pay was not being made year after year then there could be a substantial award made which has some attraction to a contingency lawyer. Generally the trouble will come from a domestic who has been working for you for a few months. Good workers employed for years are usually not the cause of problems and claims. They chose to work hard and make their money honestly. The labor claim oriented worker will not be able to wait more than a few months to provoke a fight. They want something for nothing and have probably done this many times. This type of person will also do this to the Panamanian or the foreigner. The labor lawyer working for the former domestic is not getting any money from the worker or perhaps a few dollars. He is wanting to get a piece of the money he collects for the client from you. If you really owe the money you owe it and should pay it. If it is some trumped up case to take advantage of you fight back. Set the case for trial after the arbitration conference. The least a Panama labor lawyer will work for to go to trial is $400 and most of the time the employee just wants a free ride and will not pay any money to the lawyer even if they have it which is usually not the case. If the worker was with you a few months in any event the award is probably not going to be more than a few hundred dollars so the motivation is not there for the contingency lawyer. So get a competent lawyer and fight back if you like. Explore grounds for a counter lawsuit against the employee and seriously consider this. If there is a counter lawsuit the lawyer on the other side has a lot more to worry about and the price should go up. Frivolous litigation tends to go away when it costs money. Of course in the lawsuit you have all the reason in the world to do discovery like take depositions of people that have knowledge that comes to bear on the case. The lawyer on the other side will have to show up and sit there at the deposition to avoid malpractice claims from his client. You can subpoena documents. After the first round of depositions take further depositions based on evidence that came up. More witnesses can be developed. Subpoena more documents. Possibly amend your complaint and your defense arguments. In general fight for your rights and of course this makes it difficult in the form of hard work for a contingency lawyer out to fleece you for nuisance value of the case. Also now the time frame is months down the road the ex-employee is not going to like the thought of having to work and forget about the case for a few months. Now she lost you as a reference. The former domestic generally wants to push these cases fast, like in days not weeks, so they can get the money right away since they are going paycheck to paycheck in many cases. When they see delays of months and legal bills they will probably lose interest in harassing you. Once again if you really owe the money pay if right away. If they are taking advantage of the system for the nuisance value you can give in and pay them off or fight back. If you want to go further sue the ex-employee if there are grounds. Get competent legal counsel. Watch out for settlements that can alter the status of the ex-employee opening the door for more claims.

Panama Labor Lawyer Games – You write a contract or a settlement agreement and their lawyer moves to set it aside as an illegal contract. Generally a ruse to get a nuisance value settlement. Make sure all your written agreements are done by a lawyer to guard against this. Remember in the first round you have an 80% chance of losing so be prepared to go the distance. You can not have any written contract that takes away from the employee any vacation pay, thirteenth month pay or other benefits. This sort of contract will be set aside. Don’t agree to settlements by yourself, get a lawyer.

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