Observation (CEACR) - adopted 2025, published 114th ILC session (2026)

Employment Policy Convention, 1964 (No. 122) - Panama (Ratification: 1970)

The Committee takes note of the joint observations of the National Confederation of United Independent Unions (CONUSI) and the National Council of Organized Workers (CONATO), received on 30 August 2025, as well as the observations of CONUSI, received on 29 August 2025. The Committee also takes note of the comments of the International Organisation of Employers (IOE), received on 1 September 2025, reiterating the comments made by Employer members during the discussion on the 2025 application of the Convention held in June 2025 in the Conference Committee on the Application of Standards (hereinafter the Conference Committee). The Committee also takes note of the observations of the International Trade Union Confederation (ITUC), received on 2 September 2025. The Committee requests the Government to provide its comments in this regard.

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 113th Session, June 2025)

The Conference Committee noted with concern the lack of effective and genuine consultation with representatives of workers’ and employers’ organizations regarding employment policies. Taking into account the discussion, the Conference Committee urged the Government to take, in consultation with the social partners, effective and time-bound measures to: (i) ensure that employment policy promotes full, productive and freely chosen employment based on an economic and social policy that stimulates sustainable economic growth and development, raises levels of living and overcomes unemployment and underemployment including labour market access for young persons, especially young women; (ii) continue its efforts to combat persistent gender-based vertical and horizontal segregation in employment, the low labour market participation rate of women, and their high concentration in the informal economy and in that regard implement fully the Decent Work Country Programme 2024–27 by using the guidance provided by the Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204); (iii) ensure effective consultation with the most representative workers’ and employers’ organizations concerning employment policies; and (iv) formulate, implement, monitor and review active labour market measures adopted in the context of employment policy taking into account the groups targeted. The Conference Committee requested the Government to avail itself of technical assistance from the ILO and to provide a detailed report on the measures taken to implement the above recommendations by 1 September 2025.

Articles 1, 2 and 3 of the Convention. Implementation of an active employment policy. Participation of the social partners. The Committee notes the information provided by the Government on the continuity of the policies and programmes mentioned in its previous report, such as the Vocational Guidance Programme (POVE) and “My First Job”, with a differentiated approach for each population group (young persons, women, persons with disabilities and those in rural areas). It also takes note of the Government’s indication that, on 26 December 2024, the Government Strategic Plan (PEG) 2024–29 was approved, which includes measures aimed at promoting economic recovery with a focus on equity, generating formal jobs, strengthening productive entrepreneurship and promoting the development of job skills, especially among young people and women. Among other measures, the PEG provides for major public works and an investment of 30,277 million balboas until 2029, with a direct impact on key sectors such as agriculture, logistics, finance, industry, education, health and tourism. The Government adds that, within the framework of the PEG, procedures have been adopted to consider the effects on employment of measures aimed at economic and social development. The Government also indicates that the design of the PEG was the result of a participatory inter-institutional process, ensuring effective coordination between the employment policy and other areas of national development. The Government also indicates that, following the entry of the new Government in July 2024, the implementation of the Decent Work Country Programme (DWCP) 2024–27 is under review in order to assess the current conditions and priorities that will enable its proper implementation in the near future.

The Committee notes that, in its observations, CONUSI highlights: (i) the absence of a defined employment strategy agreed with the social partners; (ii) the lack of coordination between employment measures and economic and social policy; (iii) the lack of continuity and long-term vision in the programmes implemented to promote employment, vocational training and entrepreneurship, as they are implemented in a fragmented manner without evaluation or coordination, with insufficient budgets and without the effective participation of the social partners; and (iv) the aggravation of systemic problems, such as gender gaps, the disconnect between educational supply and productive demand, and the geographical concentration of opportunities (65 per cent of the economy is concentrated in the provinces of Panama, West Panama and Colon).

CONATO and CONUSI also highlight: (i) the absence of a continuous employment strategy that transcends the Government’s term of office; on the contrary, there are numerous five-year institutional strategic plans with short-term visions; (ii) the implementation of immediate and discontinuous actions without sustainable long-term goals, which respond to the Government’s short-term priorities rather than to a structured national plan; (iii) the lack of an institutional monitoring and evaluation system that includes indicators to assess long-term employment trends; (iv) the lack of an independent labour observatory that produces systematic data and periodic evaluations; and (v) poor inter-institutional coordination.

CONUSI reports that the labour market faces the following structural problems: (i) unemployment and underemployment, which has been exacerbated among the most vulnerable population groups; and (ii) increasing job insecurity, as evidenced by the alarming number of fixed-term and project-based contracts (78 per cent of registered contracts according to a 2019 report by the Institute for Labour Studies (INETRA) prepared by the Specialised University of the Americas (UDELAS) and the low number of permanent contracts (22 per cent), which constitutes a flagrant violation of the right to job stability and negatively impacts access to rights (such as maternity leave and maternity protection) and social benefits, and limits professional development. CONUSI points out that the main factors that have prevented or delayed transformative action are: (i) the persistent lack of real political will on the part of the Government to prioritize decent employment and labour rights over business interests and short-term profitability; (ii) endemic corruption and lack of transparency in the management of public resources allocated to employment programmes; and (iii) an alarming weakness in the enforcement of labour laws and workers’ rights. Finally, CONUSI refers to the technical assistance provided by the ILO in areas such as the signing of the Decent Work Country Programme (DWCP) 2024–27 and expresses the hope that this will translate into real change and will not remain mere action plans without effective implementation and tangible results.

In light of the above, the Committee notes with interest that, on 7 July 2025, the Government formally requested technical assistance from the Office in relation to the formulation, implementation, monitoring and review of active labour market measures with a view to ensuring their effectiveness, sustainability and alignment with international standards. The Committee hopes that this assistance will help to overcome the challenges in coordination that have been identified.

In view of the concerns expressed by the Conference Committee and workers’ organizations in their observations, the Committee urges the Government to take all necessary measures, in consultation with the representatives of the persons concerned, and in particular with the social partners, to: (i) ensure that employment policy promotes full, productive and freely chosen employment, based on an economic and social policy that stimulates sustainable economic growth and development, raises living standards and eliminates unemployment and underemployment, and effectively coordinates the economic investments of the PEG with the generation of quality employment; (ii) ensure the coordination of such employment policy with the country’s economic and social policy; (iii) formulate, implement, monitor and review active labour market measures adopted in the context of employment policy, taking into account the target groups; (iv) address the problem of labour market duality and contractual precariousness by promoting job stability as a means of ensuring predictable income and social protection; (v) establish a robust system for monitoring and evaluating active labour market policies, including a labour observatory with tripartite participation; and (vi) ensure that the current review of the Decent Work Country Programme (DWCP) is carried out through full and effective consultation with the social partners, ensuring that their views are taken into account in the definition of new priorities.

The Committee requests the Government to provide detailed information on the nature and impact of such measures, including statistics, disaggregated by sex, age and province, on labour market developments, particularly on labour force participation, employment, unemployment and underemployment rates.

Informal economy. The Committee notes the Government’s indication that, although the country has seen a significant recovery in employment following the COVID-19 pandemic, this has taken place in a context of high and persistent levels of informality, which particularly affects the most vulnerable sectors of the population. The Government adds that the high rate of informality: (i) represents a structural challenge to economic development; (ii) limits access of a significant portion of the workforce to fundamental rights, such as social security, contractual stability and various benefits; and (iii) has not been effectively reversed by the public policies implemented, highlighting the need to adopt more integrated, sustainable and coordinated strategies. To address this situation, the PEG includes, among its objectives, tackling the structural causes of informality through inter-institutional and multi-sectoral coordination, integrating the efforts of the State, the private sector and civil society, with a view to designing and implementing inclusive and sustainable solutions. The Government indicates that, with this approach, it is expected to achieve significant progress in reducing labour informality. The Committee also notes that CONUSI reports that excessive informality is one of the main structural problems facing the labour market. In this regard, CONUSI emphasizes that: (i) workers in the informal economy do not contribute to social security and are not protected in case of illness, old age or maternity; and (ii) the measures adopted by the Government, such as the creation of a register of self-employed workers, are insufficient and do not address the structural magnitude of the problem.

In this context, the Committee notes with concern the alarming and persistent levels of informality in the country, especially among young people. According to statistical information from ILOSTAT, the informal employment rate in 2024 was 58.7 per cent (60.7 per cent among men and 55.9 per cent among women), reaching 69.4 per cent among young people. In this regard, the Committee recalls once again that, in order to combat informality effectively, the Government may refer to the guidance provided by the Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204). Recommendation No. 204 sets out the strategic vision developed by the ILO’s tripartite constituents to ensure the transition to the formal economy through the creation and implementation of integrated policy frameworks that include labour, tax and social security laws. These integrated policies are essential to promoting sustainable growth that generates jobs, and benefits people living in poverty. In view of the persistent and alarming levels of informality, especially among young people,the Committee urges the Government to provide information on the measures taken within the framework of employment policy to promote the transition from the informal to the formal economy, in coordination with other public policies, including, for example, social protection, education, budgetary and rural development policies. The Committee invites the Government to indicate whether such measures include, for example, any of the following actions: (i) strengthening the legal framework to ensure that laws promote formalization and are effectively enforced; (ii) developing social dialogue with employers and workers’ organizations with a view to designing and implementing formalization strategies, while promoting gender parity in the labour market to ensure that women have the same opportunities to transition to the formal economy; (iii) supporting entrepreneurship, together with improving access to microfinance, with a view to providing the necessary resources for small businesses to grow and become part of the formal economy; (iv) investing in skills development and vocational training to equip workers with the skills needed in the formal economy, as well as extending social protection to provide a safety net for informal workers; (v) promoting private sector-led growth to create formal employment opportunities, while implementing specific programmes to reduce informality; and (vi) strengthening labour inspection mechanisms.

The Committee also draws the Government’s attention to the possibility of strengthening its operational framework by using technical tools specifically designed and developed by the ILO to facilitate these transitions. In this regard, the Committee highlights the potential usefulness of the “Formalize Your Business” (FYB) training module to complement current national efforts to develop the administrative capacity of microentrepreneurs. Furthermore, with regard to the challenges of extending social protection and inspection to uncovered sectors, the Committee encourages the Government to consult the Methodological Note: Diagnosis of Informality to refine its identification of the determinants of informality in specific sectors, such as domestic work and agriculture.

Article 3. Consultations. The Committee notes the Government’s indication that Executive Decree No. 3 of 22 April 2024, which establishes the public employment service, creates the Employment Service Advisory Committee. This tripartite Advisory Committee is responsible for suggesting and coordinating employability actions implemented by the employment service, including active labour market policies, plans and projects to generate employment. The Government indicates that it is expected to be activated to carry out effective tripartite consultations. It also notes that the powers of this Committee are assumed by the Labour Foundation (FUNTRAB), a non-profit non-governmental organization that promotes social dialogue and tripartism in the country. FUNTRAB is composed of CONEP, CONATO and since 2012, MITRADEL, becoming a tripartite institution. The Government also refers to the National Institute for Vocational Training and Human Development (INADEH) and the Higher Specialized Technical Institute (ITSE), whose advisory councils include representatives of the social partners and academia, ensuring that their programmes respond to the needs of the labour market. Furthermore, the Government refers to the holding of regional consultations to design specific policies, such as the Economic Agenda for Rural Women, in which more than 300 rural women leaders from various regions participated to ensure an inclusive and representative policy. The Committee notes, however, that the Government has not responded to its previous comments or to the conclusions of the Conference Committee regarding effective consultations with representatives of the social partners on employment policies.

The Committee notes that CONUSI denounces that the conditions for effective social dialogue and full cooperation of workers’ organizations, which are fundamental pillars for the implementation of the Convention, are seriously compromised by flagrant and continuous violations of freedom of association and the persecution of trade union leaders. CONUSI emphasizes that consultation with the social partners must be genuine, effective and carried out from an early stage, ensuring the full participation of workers’ organizations in the formulation, implementation and mandatory monitoring of employment policies. CONUSI points out, however, that workers’ opinions are often not taken into account in a comprehensive manner, but are merely heard without their contributions being reflected in concrete decisions.

Finally, the Committee notes that CONATO and CONUSI emphasize that the report on the implementation of the Convention was not discussed in a tripartite manner. They indicate that CONATO received a copy of the report on 12 August 2025, while CONUSI did not, in contravention of article 23(2) of the ILO Constitution. In this regard, CONUSI emphasizes that this omission demonstrates a lack of transparency, and a disregard for tripartite social dialogue, and undermines effective participation in the formulation and monitoring of employment policies by denying workers’ organizations access to official information.

Recalling that Article 3 of the Convention requires consultations not only to exchange information but also to take full account of the experiences and opinions of the social partners, and to obtain their full cooperation, the Committee urges the Government to take the necessary measures to ensure effective and genuine consultations. The Committee requests the Government to: (i) clarify the relationship between the new Consultative Committee and FUNTRAB to ensure that there is a permanent and effective forum for the design of employment policies; (ii) provide specific examples of how the opinions expressed by CONEP, CONATO and CONUSI have been taken into account in the formulation of recent policies; and (iii) indicate the mechanisms established to consult the representatives of those affected by the measures who work in the informal economy and the rural sector, beyond the specific consultations mentioned.

Participation of women in the labour market. The Committee notes that the Government refers to the continued implementation of the following policies with a view to promoting the participation of women in the labour market: (i) the Public Policy on Employability and Labour Market Integration of Young People and Women (PEIM), which includes projects such as Empowering Women (Impulso Mujer), benefiting more than 2,500 people, which aims to strengthen entrepreneurship, economic autonomy and the inclusion of women in sectors that traditionally have a higher representation of men; (ii) the Public Policy on Equal Opportunities for Women 2024–34 (PPIOM), which seeks to guarantee substantive equality for women by establishing clear goals in economic autonomy, access to education, health, political participation and rural empowerment; and (iii) the Gender Parity Initiative (IPG), which trains the private sector in gender perspectives, improving organizational culture and reducing economic gaps. In this regard, the Committee notes that CONATO and CONUSI state that: (i) the above-mentioned government policies have not reversed structural gender segregation and inequality in the labour market, or the high concentration of women in the informal sector and in low-productivity, low-wage sectors; and (iii) there is no system for monitoring the measures adopted with indicators relating to women’s employment (such as formalization rates, wage gaps or access to management positions) and no further surveys on time use have been conducted.

The Committee notes that, according to ILOSTAT, in 2024, the labour force participation rate among men over 15 years of age was 74.4 per cent and only 51.8 per cent among women, and the unemployment rate among women reached 11.3 per cent compared to 6.6 per cent among men. The Committee also notes that the scope of programmes such as Empowering Women (Impulso Mujer) appears limited in relation to the magnitude of the observed participation gap. The Committee further notes that the Government does not provide specific information in its report on the nature and impact of the measures taken under the aforementioned programmes or on the consultations held with the social partners in this regard. Given the persistence of labour market segregation and structural barriers,the Committee encourages the Government to continue its efforts to combat persistent vertical and horizontal gender segregation in the labour market, the low labour market participation rate of women, and their high concentration in the informal sector of the economy.The Committee once again requests the Government to provide specific information on: (i) the quantitative and qualitative results of the measures taken under the PEIM 2030 and the PPIOM 2024-34, specifying how many women have managed to transition to formal and sustainable employment; (ii) the measures taken to promote a more equitable distribution of family responsibilities and improve care infrastructure, in light of the need to update time use surveys, as pointed out by the social partners; and (iii) the content and outcome of the consultations held with the social partners on this issue.

Youth employment. The Committee notes the information provided by the Government on the various programmes and measures implemented to promote youth employment: (i) the “My First Job” programme, which has enabled 624 young people to enter the labour market (out of 1,058 internships offered) and through which it is envisaged to generate 2,780 additional opportunities by 2025; (ii) the “Learning by Doing” (Aprender Haciendo) programme, which facilitates access to a first work experience for young people between the ages of 17 and 24, in collaboration with various government and business organizations; (iii) the signing of a cooperation agreement with the Private Sector Council for Educational Assistance, which provides training through the online platform conecta, aligned with labour market demands and including periodic evaluations to monitor participants’ progress; and (iv) the continuation until December 2024 of the “Solidarity Employment” programme to encourage the hiring of people in vulnerable situations who lost their jobs during the COVID-19 pandemic. The Committee also notes that, in its observations, CONUSI highlights the high rate of youth unemployment and denounces the fact that government programmes such as “Business Mentor” (Padrino Empresario) or “Learning by Doing” (Aprender Haciendo) have no real impact and are sometimes used by companies to fill vacancies with temporary internships, without stable employment or decent pay. Likewise, CONATO and CONUSI maintain that the Mi Primer Empleo programme has had a limited impact on reducing youth unemployment, as it has very limited coverage (only 600 young people have been placed) and also has a short-term welfare approach and provides remuneration below the established minimum wage. They also point out that no audit of the programme’s impact has been carried out.

While taking note of the above, the Committee observes that, according to ILOSTAT, in 2024 the youth unemployment rate was 19.7 per cent (26.7 per cent among women and 15 per cent among men). The Committee also notes that the information provided by the Government does not address all the issues on youth employment raised in its previous comments. Therefore, in view of the high unemployment rate among young people, especially young women, the Committee once again requests the Government to provide detailed information on: (i) the nature and impact of actions taken to integrate into employment policy measures aimed at promoting access to the labour market and self-employment for young people, including statistics disaggregated by age and sex on employment, unemployment and underemployment among young people; (ii) how coordination is ensured between the various programmes and projects implemented to promote youth employment; and (iii) the consultations held with the social partners on these measures.

The Committee is raising other matters in a request addressed directly to the Government.