Easily manage employment in Panama

Panamanian labour law stipulates that long-term employment contracts can only be terminated with a written notice specifying a just cause, such as dishonesty, negligence, fraud, or any other work-related offences. Employees can seek redress via a labour court if they deem that a termination has been made on an unjustified basis.

Employers are only required to provide 30 days’ notice to employees dismissed without just cause.

Employees are only entitled to severance payments when a termination decision is due to redundancy.

• Up to 6 months of employment: two weeks’ pay
• Up to 9 months of employment: three weeks’ pay
• Up to 1 year of employment: 1 months’ pay
• Up to 2 years of employment: 3 months’ pay
• Up to 4 years of employment: 4 months and two weeks’ pay
• Up to 5 years of employment: 5 months and a week’s pay
• Up to 10 years of employment: 9 months and three week’s pay
• Up to 20 years of employment: 14.8 months’ pay

The maximum length of probation is 3 months.