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Employment Reforms Update Employment Reforms Update

Employment Reforms Update - PowerPoint Presentation

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Employment Reforms Update - PPT Presentation

Australian High Commission 29 Sept 2015 TLAC In 2010 Tripartite Labour Advisory Council TLAC established to replace Labour Advisory Board Tripartite Employers Workers Government Employers reps Astrid ID: 802369

workers employment contracts job employment workers job contracts severance erb leave tlac unemployment fixed pacific countries 2014 worker act

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Slide1

Employment Reforms Update

Australian High Commission 29 Sept 2015

Slide2

TLAC

In 2010 Tripartite Labour Advisory Council (TLAC) established, to replace Labour Advisory Board

Tripartite: Employers, Workers, Government

Employers reps: Astrid

Boulekone

, Robert Bohn, Dick

Eade

, replaced by Anita Jowitt after May 2012

Workers reps:

Loreen

Bani

, Ephraim

Kalsakau

,

Mathilde

Butal

Govt reps: Jimmy

Rantes

,

Bethuel

Solomon, Judith

Melsul

Slide3

ERB

In 2011 TLAC starts to work on ERB, using an old draft, and assisted by ILO

Many meetings but no broad public consultation

A draft is produced in June 2012

2012 – 2014 Tripartite meetings to develop draft fail to happen

In July 2014 a tripartite social protection project launched, in part to try to get discussion on maternity and unemployment/severance moving ahead

This paper completed and endorsed by TLAC in Dec 2014

Dec 2014 TLAC agrees to a schedule of meetings to work through ERB in detail, part by part

Meetings do not happen

Slide4

Employers actions to consult on ERB

July 2013 business forum does not support much of the ERB content on benefits

Survey launched July 2014

397 business from throughout country respond

Multiple consultation meetings in Santo and Vila from Nov – Feb once survey results are out

May 2015 VCCI council asks to try to separate out “Employment Act” parts of ERB

August 2015 this approach rejected after validation meeting

In process of

finalising

revised position paper, recommending amendments to the Employment Act

Slide5

Employer position

Slide6

General principles

Employers want a fair, workable situation that will lead to employment growth and private sector led development for the good of all of Vanuatu

The current law is not seen to be fair and workable

Survey results show that many businesses laid off staff or reduced wages and conditions after 2008/2009

This is bad for workers, and particularly the large number of young school leavers and female workers

Slide7

General principles

Easy

to

understand

and

use

Flexible

Minimise

red

tape

Benefits

should be at a similar level to other Pacific

countries

Realistic for the Vanuatu context

Should

not stop small

ni

Vanuatu entrepreneurs from being able to grow and develop their

businesses

Reduce political interference

Slide8

Not as currently drafted – many changes are needed

Does ERB meet these principles?

Slide9

Moving forward?

The employers’ position is that

:

Further detailed discussion of the content ERB, following the plan at the December 2014 TLAC is needed in order to determine consensus policy positions.

TLAC should come to policy agreements and then new employment laws drafted, starting with a “clean slate” on the drafting.

As the development of the ERB is likely to take some time,

in the interim

the Employment Act should be amended to introduce provisions that provide better job security for workers and increase job opportunities by removing existing barriers to employment. Particular areas are identified for amendment are:

Formation of employment contracts

Termination and payments on termination

Leave benefits

Slide10

Proposed position

Law should promote more job opportunities and more job security for workers

Job security:

There should be more certainty around making contracts

There should be restrictions on terminating employment without any reason

Severance allowance creates barriers to full time ongoing employment and should be restructured into a different type of unemployment payment

Slide11

Proposed position 2

Law should promote more job opportunities and more job security for workers

Job opportunities:

Leave benefits are costly and prevent employment. They should be set at levels that are benchmarked against other Pacific countries

Severance allowance forces struggling businesses to close down which leads to job losses and should be restructured into a different type of unemployment payment

Slide12

Amending the Employment Act to promote job

security

Slide13

Making contracts

If workers ask then contracts must be in writing

A simple, optional pro forma to be provided in the Employment Act

Casual workers who work in regular systematic employment for 6 months or more are deemed to be on contracts for an indefinite period

Workers on fixed term contracts that are renewed more than 3 times are deemed to be on contracts for an indefinite period unless there are valid operational reasons for using fixed term staff

Slide14

Termination

Casual work can be terminated by either party at any time

Fixed term and fixed task contracts can expire at the end of their term

Fixed term/task contracts can be ended early if the worker commits serious misconduct or fails to perform

Indefinite contracts can only be ended if:

The worker commits serious misconduct,

The worker fails to perform and does not improve after warnings and assistance to improve

There is a redundancy situation (the business is downsizing and needs less staff)

The worker reaches 55 and is retired

The worker resigns by giving notice

Slide15

Amending the Employment Act to promote j

ob

opportunities

Slide16

Annual leave and sick leave

Annual leave should be a flat rate of 15 days per year

Still higher than other Pacific

countries

Accrued annual leave earned under the existing law should not be lost

Sick leave should be 10 days per year

On par with other Pacific countries

Slide17

Maternity benefits

Maternity leave should be 12 weeks at 50% pay

More generous than most Pacific countries

There should be more flexibility around when leave is taken

There should be more protections on terminating pregnant women

Paid nursing breaks

should

reflect actual needs of nursing mothers

1 hour for each 4 hours worked up to 6 months

½ hour for each 4 hours worked up to 12 months

More generous

than most

other Pacific countries

Slide18

Payments on termination

The current severance allowance should be removed altogether

Existing allowances get fixed at a date set in law, so no existing allowances are lost

A payment of 1 week’s salary per year worked, capped at 3 months salary, is directly paid by the employer if the worker is terminated because of redundancy

Additional ongoing contributions (2% by employer and 2% by employee) are made to the VNPF, and can be withdrawn if needed on unemployment.

If there is no need to withdraw these funds then the retirement payment is larger

Slide19

Why move from severance?

Data (VNPF, VIPA, business licenses, survey results) show the 2008/2009 changes to severance led to job losses, and more use of casual and part time work to avoid severance.

This particularly affects low wage/low skilled workers, who most need an unemployment benefit

Severance does not reach who it needs to

The proposed scheme is a benefit to workers as more workers become eligible for access to unemployment payment

Slide20

Why move from severance?

Redundancy can be difficult for businesses as they are being asked to pay when they are struggling and there is a real risk that they do not have money to pay. Reducing the amount of payment in this situation helps to keep struggling businesses going

If a business goes bankrupt there is no money to pay so workers lose out altogether. Having money saved in VNPF avoids this risk for workers

Slide21

Is this a final position?

Still under discussion

The last approach

proposed by employers

(the

Employment Contracts Bill) was rejected

by VCCI members after validation

The proposal is for interim amendments to remove some of the big problems in the Employment Act

B

roader policy and institutional issues must be sorted out, but we also need solutions while taking the time to

do this

Feasibility of moving to a pooled maternity benefit needs to be explored

Feasibility of moving to a pooled

unemployment insurance needs

to be explored