Telecoms & IT

Happy Worker, Productive Worker

Teleworking represents an opportunity for IT companies in Panama, though without clear guidelines, it can generate a series of challenges that could outweigh the benefits.

Technological evolution and the increase in the use of the internet worldwide have tested many of the well-known ways of offering services to consumers and have also revolutionized the labor sector. Ways of working that were unimaginable in the past are possible today due to the alternatives and advantages offered by information and communications technologies (ICTs). A clear example of this is teleworking.

This innovative form of work represents a “win-win” situation for the employer and employee. It serves to reduce costs and optimize and decentralize operations. Telework potentially contributes to a better work-life balance for workers, offering an improved quality of life for citizens. It can benefit the environment—for example, by reducing the number of cars on the road—and offers the opportunity for marginalized groups such as people with disabilities to be gainfully employed. However, in many countries, this innovative, alternative work arrangement does not have a proper legal framework regulating it, which can lead to employment practices that violate the fundamental rights of teleworkers.

Panama has become a services-oriented economy over recent years due to its strategic location. It is now a hub for global business operations and regional headquarters for multinationals. There are strong indications that telework is on the increase and that this trend will continue.

During a recent workshop ran on telework in Panama, around 46 companies were found to employ teleworkers. Most of these enterprises, such as Dell Panama, Sitel, and PCCW Teleservices, among others, do business related to customer services and telecommunications. The strength of Panama’s telecommunications infrastructure is one of the main reasons why these businesses turn to telework as an option. Panama has a solid broadband infrastructure, and the number of internet users is rising steadily: in 2010 the country had around 265,825 users; by 2015 the number had increased to 316,170. However, a question arises: is Panama legally prepared for this new form of work? Can it guarantee the proper protection of employee rights? We analyze the legal status of teleworkers in Panama and recommend steps that the country has to take into account in order to deal with the challenges related to the social and economic development of teleworkers, and in order to ensure the proper protection of labor rights and related rights contained in domestic and international instruments.

Current legal status of telework in Panama

Panama ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR) in 1977 and has also ratified around 78 conventions related to international labor rights.

Panama has no specific laws regulating telework. The Labour Code of 19717 contained two articles dedicated to “home-based work” articles that could be read as partly referring to telework. However, Law No.1 of March 19868 repealed those two articles because the legislator believed that there is no legal difference between workers. Therefore, in Panama the Labour Code should be applied to all workers in the same manner, taking into account specializations or the kind of work being done.

Given this legislative gap, teleworkers are considered normal employees falling under labor law, and the framework of engaement between teleworkers and employers is defined by the contract between the two, or the terms of service contract. This is when the problem arises. How do you define the rights of a teleworker and the duties of an employer when in countries like Panama the definition of an employee is quite general and in some ways based on obsolete ideas of what work means—an office or location where there is a hierarchy, and immediate oversight and control? The ICESCR affirms the obligation of states parties to assure individuals the right not to be deprived of work unfairly. This definition emphasizes the importance of work for personal development as well as for social and economic inclusion. The regulation of telework will help expand labor market opportunities, but in a way that the rights of workers are guaranteed.

The lack of a clear definition for telework

There is inadequate reliable data produced by government institutions in Panama to determine the actual number of teleworkers in the country or data that can support arguments regarding the benefits or costs associated with telework. This could be due to several factors, including the lack of a clear definition of telework in Panama and disinterest among the authorities to quantify the sector, given other social priorities in the country.

A general definition of telework is essential for the sector to be regulated. A definition will allow different types of telework, categories of teleworkers, and their respective rights and obligations such as minimum remuneration and standards for occupational safety and health to be defined. A definition will also enable lawmakers to distinguish telework from other forms of similar work, such as home-based work. The two concepts are normally confused, but they are a slightly different. “Remote work,” a concept commonly used in companies, is a benefit that the companies grant to their employees, allowing them to work from a location other than the office; however, their presence at the office is generally required. They have to comply with the same rules and obligations as the office-based employees. Remote work also refers to work done while travelling on business.

Teleworkers, however, are contracted to work outside of the office environment. They perform the job using information technologies that allow them to have access to systems available in the office, such as specific software programs and databases, and can even use the printers located in the offices. Therefore, the use of technology and communications are crucial. In this regard, the international community has been working on a definition of telework, even though there is no consensus on its definition. There are some agreements and guidelines such as the European Framework Agreement on Telework signed in 2002 that could help legislators identify the main elements and characteristics of telework and develop a definition. This agreement, which was signed by the European Trade Union Confederation (ETUC), the Union of Industrial and Employers’ Confederations of Europe (UNICE), the European Union of Crafts and Small and Medium-Sized Enterprises (UEAPME), and the Centre of Enterprises with Public Participation (ECPE), states that teleworkers should enjoy the same working standards as employees working in an office—which means that the employer is responsible for the protection of their occupational health and safety, that the workload and performance standards are equivalent, and that the training and career development are comparable, among others.

Telework offers countless benefits, but at what cost?

As mentioned, telework potentially offers a wide range of benefits to workers and companies alike. However, currently the relationship with telework employees in Panama is defined by the employer. Normally, under this type of contract, the teleworker does not have company employment benefits, a situation which also rewards the company with lower administrative costs. This means that the teleworker has to assume the risks and costs as an independent professional services supplier, while at the same time be subordinate to company rules and supervision. Without a proper legal framework, a company’s policy in contracting teleworkers can generate a series of challenges that could outweigh the benefits. These are some of them:

Isolation and lack of relationship building

Everyday interaction and informal communication among co-workers help to develop ideas and help employees work together more efficiently and effectively. The lack of day-to-day interaction may gradually isolate teleworkers from a professional as well as a social point of view, and can affect their career development. A report by the European Foundation on the health and safety issues facing teleworkers in the EU found that in several countries such as Ireland, telework often leads to a lack of both formal and informal contact and that teleworkers spend long periods of time working alone. In some countries, such as Portugal and the Netherlands, teleworkers are required to make periodic visits to the company offices.
The relative isolation can also create difficulties for teleworkers fulfilling their work duties, especially if they experience difficulties in communication with managers and coworkers, and in getting responses to their work queries on time.

No distinction between work time, family life, and leisure

Teleworkers have to manage their own time. There is a tendency to work longer hours when working outside of an office, a situation that can generate family conflict due to multiple roles and commitments. This is especially a challenge for women. These types of situations produce stress and can lead to the development of health problems.

Safety and health

There are some health risks that could be related to telework, including the stress caused by overlappng home and work commitments, and depression caused by the isolation. The European Foundation report found that in the UK, social isolation is generally regarded as the largest potential problem facing teleworkers. Isolation and loneliness are work stresses faced by teleworkers, and should be considered alongside other work stresses as factors that can have harmful psychological effects, impacting both on the teleworker and the organization if not taken seriously. There is a worrying gap in legislation in Panama recognizing these phenomena.

Lower remuneration

Teleworkers’ salaries are generally lower compared to comparable work done by other employees. Overtime is typically not financially rewarded. Research carried out in the UK showed that computer professionals employed as teleworkers earned between 19% and 29% less than onsite workers performing similar activities, and that overtime compensation is not usually paid to the teleworkers.

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