Paternity Leave

By Daniela Arias V., associate at Alfaro, Ferrer & Ramírez (AFRA)

On March 28, 2017, the Work, Health and Labor Development Commission of the National Assembly approved the first debate of the Draft of the Law No. 476 by which the paid Paternity Leave for the employees from the private and public sectors is created, for a term of 5 working days. The main purpose of this draft of the law is to strengthen the family bond within the Panamanian society, as well as to prevail at all times, the superior interest of the minor, included in the Convention on Children Rights of the United Nations. The Convention was signed and ratified by Panama in 1990, and is in force in the country since January 1991.

The Paternity Leave must not be perceived as an award or a benefit for the father but rather as a right of the new born to enjoy his/her parents during the first days of his/her life. Regarding the protection of the employees with family responsibilities, it would be progress for the country, to promote laws that are in agreement with the international recommendations established by the International Work Organization (IWT) in the resolution adopted by the International Work Conference (IWC) in 2009, where the governments are urged to formulate adequate policies that allow more equilibrium between work and family responsibilities.

However, the incorrect implementation of the promulgation of a law that approves a Paternity Leave with legal gaps could produce the bad use of this leave and degenerate in a direct impact to the private sector.

In countries such as Colombia, the Paternity Leave grants 8 days of leave with pay to the husband or companion who resides and works in the country, however, not all future Colombian fathers can be benefited by this leave since they must comply with certain requirements established in the Law No. 1468 of June 30, 2011.

For example, the future father must be a contributor to Entidades Promotoras de Salud (EPS) during the weeks before the delivery, since said institution pays the Paternity Leave. In case that the father of the new born is the only contributor, that is, the mother does not contribute to EPS, the father is only granted a 4 working days paternity leave with pay.

For Panama, the reality is different, since it is the private or public employer the one who will assume the expenses derived from the Paternity Leave during the 5 working days, that is, an additional expense to be assumed by the private sector, which is the motor of the Panamanian economy.

According to the Ministry of Work and Labor Development, the application of this draft will cost 6.4 million Dollars per year to the private sector, and 1.4 million Dollars to the public sector. However, businessmen in the country consider that this amount is way below the real amount, since it is around 30 million Dollars.

Because of this, and in order to mitigate the expenses of the private sector regarding the paternity leave, it is important to consider both, a new approach for this draft, and which entity will be responsible to assume said disbursement. Either that it generates a discount to the proportional vacations of the employee or have those 5 days reduced from the 15-day sick leave allowed per year under the Panamanian jurisdiction.

Another legal consideration is the amount of Paternity Leaves that could be requested by each employee annually, since the draft does not specify if there is a limit for that or if the paternity leave extends to all the parents in the country without considering their relationship to the mother. There must be a control as to the amount of annual leaves per employee and the eligibility of this leave for children born outside the marriage, in order to strengthen and preserve the family union within the society.

In general terms, the parental leave is notably beneficial for the integrated development of the child of the employee, however, at the time the legislation regarding the leave mentioned is created, the following must be clearly established: the eligibility, payment, duration, flexibility of the use, age of the child under care, and the transferability among the parents, so that in fact, the same complies with its main purpose, without affecting the economy of the country.