Panama

Panama, located in Americas, appears in 2 of the three employment-protection datasets tracked on PlainEmploy (ILO EPLex, World Bank B-READY 2025, and OECD EPL). The most recent ILO EPLex composite score is 0.445 out of 1.0 (2018), summarizing statutory termination rules into a single index. The OECD EPL overall strictness index is 2.35/6.0, where higher values indicate stricter rules on individual and collective dismissal.

Statutory notice periods in Panama scale with tenure across 7 tiers, reaching 0 months at 20 years of service. Severance pay can reach 0 months of salary at 20 years, while redundancy-specific pay is 14.8 months. The maximum probation period allowed by law is 3 months, defining how long employers can assess workers under reduced protection.

The EPLex redress/reinstatement sub-indicator is 0.500/1.0, reflecting how strong remedies are when a dismissal is ruled unlawful. 6 direct country-vs-country comparisons are available below, letting you see how Panama stacks up against peers on the same metrics.

These figures draw on three different measurement traditions, so read each one on its own terms before comparing across countries. The ILO EPLex composite condenses statutory termination rules into a single index from zero to one, where higher numbers mean stronger legal protection against dismissal. The World Bank Business Ready 2025 labor score runs from zero to one hundred and blends the quality of regulation with how well public services and dispute processes actually work in practice. The OECD employment protection index uses a zero to six scale and only covers member economies, but it offers the longest historical series, which makes it the better choice for tracking reform over time. A country can score strictly on paper yet still process dismissals quickly, so always weigh the statutory index against the practical estimates. Where a country appears in fewer than all three datasets, treat the missing measures as not yet collected rather than as a sign of weak protection, and revisit this page when new releases are published because indicators can shift year over year.