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Ce. Center for Logistics, Trade and Transportation and College of Business. THE UNIVERSITY OF SOUTHERN MISSISSIPPI. Study Abroad in Panama Coordinated by Dr. Tulio Sulbaran Tel: 601-266-6419 - Email: [email protected] A CASE STUDY OF EMPLOYMENT LAW FOR PROCTER & GAMBLE –

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THE UNIVERSITY OF SOUTHERN MISSISSIPPI

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Ce

Center for Logistics, Trade and Transportation

and

College of Business

THE UNIVERSITY OF

SOUTHERN MISSISSIPPI

Study Abroad in PanamaCoordinated byDr. Tulio SulbaranTel: 601-266-6419 - Email: [email protected]

A CASE STUDY OF EMPLOYMENT LAW FOR PROCTER & GAMBLE –

UNITED STATES VS PANAMAPresented by:Jeana O. RichTel: 601.325.8846 - Email: [email protected]

Jul 2012


Video Preamble

VIDEO NOT AVAILABLE

Presentation and interview with P&G was canceled.


Outline

  • 1- Introduction

  • 2- Information/Data Collection Approach

  • 3- Case Study

  • 4- Results and Results Impact

    • Similarities

    • Differences

  • 5- Summary


Introduction

  • Employment law consists of legal rights of & restrictions on employees & employers

  • Applies to broad area of topics, including hiring, wages, work hours, time off, child labor, and safety

  • Enacted to protect workers from

  • abusive employment practices

  • Applies to former, current &

  • potential employees


Introduction

  • Panama serves as international

  • commercial & financial center

  • GDP for 2011 - $50.25 billion

  • Per Capita GDP - $13,600

  • Labor force of 1.57 million

  • Shortage of skilled labor

  • Ranked 61 on World Bank’s

  • 2012 “Ease of Doing Business Index”

  • Improving infrastructure


Introduction

  • This case study compares certain aspects of the employment laws in Panama to those in the US. Specifically, the following items were compared:

  • Minimum wage requirements

  • Overtime pay requirements

  • Working hours

  • Mandatory paid time off


Information/ Data Collection Approach

The first part of the data collection approach consisted of extensive internet research. Two main search engines were used (Google & Bing). Government databases were also utilized .


Information/ Data Collection Approach

  • Data collected through the internet research consisted of information on the following items:

  • Business environment in Panama & US

  • P&G’s operations in Panama & US

  • Panama’s Labor Code of 1971 (Code)

  • US’s Fair Labor Standards Act (FLSA)


Information/ Data Collection Approach

The second part of the data collection approach would have been an on-site visit and personal interview with a representative from P&G in Panama. Unfortunately, these meetings were canceled by P&G.


Case Study

P&G is a multinational company that markets over

250 consumer products. In 2007, P&G relocated its

Latin American Regional HQ to Panama. It is the

largest consumer goods company in Latin America,

with regional sales of $6 billion and employing

more than 14,000 people across

14 countries. The region includes

19 manufacturing sites, 12

distribution centers, and a

service center.


Case Study

P&G was founded in the US in 1837. Its North American Regional HQ and corporate offices are located in Cincinnati, OH. Forty-two percent of total company sales in 2011 were generated in the US. P&G employs 138,000 people worldwide, with approximately 35,000 employees in the US.


Results and Results Impact

  • This case study compared the employment laws applicable to P&G in Panama to those of the United States. Because employment law is a broad area, the following specific items were compared:

  • Minimum Wage Requirements

  • Overtime Pay Requirements

  • Working Hours

  • Mandatory Paid Time Off


Results and Results Impact

Table of Similarities


Results and Results Impact

Table of Differences


Results and Results Impact

An analysis of the similarities and differences quickly highlights that the employment laws in the two countries are significantly different. As Panama continues to make itself an attractive destination for multinational businesses, US companies need to be aware of additional labor costs that will be incurred due to the requirements of Panama’s labor code. Additionally, noncompliance can lead to fines.


Summary

  • P&G has locations in both the US and Panama

  • Required to comply with different employment laws

  • Only two similarities exist

  • Panama imposes maximum working hours and mandatory paid time off

  • Panama’s additional requirements can increase labor related costs

  • Noncompliance can lead to penalties


THE UNIVERSITY OF SOUTHERN MISSISSIPPIfounded in 1910

Thanks!

Center for Logistics, Trade and Transportation

and

College of Business


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