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
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Slide1
Employment Reforms Update
Australian High Commission 29 Sept 2015
Slide2TLAC
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
Slide3ERB
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
Slide4Employers 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
Slide5Employer position
Slide6General 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
Slide7General 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
Slide8Not as currently drafted – many changes are needed
Does ERB meet these principles?
Slide9Moving 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
Slide10Proposed 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
Slide11Proposed 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
Slide12Amending the Employment Act to promote job
security
Slide13Making 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
Slide14Termination
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
Slide15Amending the Employment Act to promote j
ob
opportunities
Slide16Annual 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
Slide17Maternity 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
Slide18Payments 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
Slide19Why 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
Slide20Why 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
Slide21Is 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