Important Business News Wednesday 27 May 2020
Legal Advice on recent Labour Department directives
Due to the escalating number of enquiries by businesses that are concerned about potential changes to employment conditions and directives given by the Labour Department, VCCI engaged a lawyer to clarify the legal position of businesses owners affected. Below is a summary of the advice we have received in relation to specific cases of businesses being told to rehire employees:
Regarding statements that ‘Employers must re-hire staff or place them back onto the payroll and apply for the ESP and pass on the 30,000VT per month’ the Commissioner of Labour ‘has no power in the Employment Act or in any other Vanuatu law to order reinstatement if an employer has otherwise complied with the law’ or ‘deal with any employer who uses [Covid-19] situation to unfairly dismiss workers’.
We encourage businesses to make sure that they have paid out all entitlements if they have had to make staff redundant to stay compliant under Employment law.
Employment Stabilization Payment benefiting very few
On 15th of May VCCI met with the Minister of Finance to raise concerns regarding the changes to the types of businesses that were ‘qualified’ for the Employment Stabilization Payment (ESP), printed in the Daily Post on Saturday 9th May.
VCCI was left feeling optimistic after understanding that a commitment was made by those present that there would be a revision made to the announcement based on inclusion, but unfortunately, despite constant follow up and patience, there has been no such result to date.
If statements made to VBTC by the Ministry of Finance are correct, over 83 million vatu has been paid to employers to hand down to their employees. From our spot checks many qualified businesses are still waiting for their March payments, and those who have received payments have only for March. April and May payments remain outstanding. We request the government to share with us their progress made (number of businesses and number of employees who have benefited) and to please recognise the needs of all of our businesses and improve the efficiency of its processing of the ESP.
Who is supporting the development of Ni Vanuatu workers?
It has come to our attention via a range of sources that a directive from the Commissioner of Labour has been received by the State Law Office, requesting that 33 additional occupations be added to the restricted occupations list under the Employment Act/Work Permit Act.
Regarding adding more restricted occupations to the Act, particularly as the indications are that these are managerial positions, many of the occupations we understand to be proposed have been identified as having skill shortages and skill gaps under the National Trade Policy Framework Update 2019-2025 (TPFU), and therefore inconsistent with this policy. Due to the lack of data available from the Department of Labour, the TPFU conducted an industry survey in 2018 with the support of VCCI and other professional associations representing approximately one third of the private sector employment in Port Vila. It summarised: “Finding skilled workers is the number one issue for employers in Vanuatu.”
Evidence on the unmet skill demand in Vanuatu was also summarized in the TPFU as follows:
- There is significant demand to improve the technical and basic skill amongst the existing workforce in preference to filling gaps through foreign worker recruitment
- Part of the skills gap and shortages are filled by foreign workers predominantly in managerial, professional and technician/associate professional levels.
- The tourism sector has identified chefs and various types of managers (general, food and beverage, finance etc.) as the more significant areas of skill shortages and skills gaps
- The manufacturing and agriculture sectors have identified maritime engineers, managers (again various forms) and sales and marketing staff as the areas they find most difficult to recruit locally
The release of the Department of Labour’s communication has therefore increased concerns amongst employers and it has the potential to undermine its very objective, to increase the number of decent, productive employment opportunities, because there will be inadequate workers available in the labour market, both ni-Vanuatu and expatriate, to operate and grow business.
It is our recommendation that the private sector and public sector work together and commit to a 10 year implementation plan involving Ministry of Education and Training, Department of Labour, Prime Minister’s Office and VCCI to provide the adequate support to the development of the ni Vanuatu workforce as a matter of urgency.
Round table on the effects of Pacific Labour Mobility Programs on businesses in Vanuatu
VCCI hosted an informal round table meeting between the Labour Department and 8 private sector businesses that have experience of staff engaging in working overseas opportunities. This meeting allowed businesses to discuss some of their core concerns and possible solutions to these with the Labour department, while also hearing from the Labour Department about what elements of the programs it controls and has input into.
Some of the topics raised most frequently included lack of notice given to employers by employees travelling overseas on the schemes, concerns that if more qualified or skilled labour leaves when our borders open what impact that may have on tourism businesses during the recovery period and the overall cost of providing skills development to staff who choose to leave Vanuatu to take up unskilled labour positions in Australia and New Zealand. It was also noted that staff that have returned from working overseas returned with increased skills and brought back ideas and attitudes to work that were positive.
The Labour representatives shared their intention to provide more support to workers before they depart for work overseas and will continue to work with agents to make sure everyone is doing their jobs effectively. VCCI looks forward to working in stronger collaboration moving forward.
