DEVELOPING DECENT WORK CONDITIONS: A STUDY OF EMPLOYMENT LAW REFORM FROM VANUATU by Anita Jowitt A thesis submitted in fulfillment of the requirements for the degree of Doctor of Philosophy © 2015 by Anita Jowitt, School of Law The University of the South Pacific November 2015 DECLARATION ACKNOWLEDGEMENTS Thank you to my supervisor Miranda Forsyth. Thank you to people who took the time to comment on drafts, especially Howard Van Trease and Ted Hill. A number of people helped to make sure this was completed. Thank you to Robert Early, Howard Van Trease, John Lynch, Kenneth Chambers and Tess Newton Cain. This thesis was initially conceived following a conversation with the then Director of the Suva Office of the International Labour Organisation, Werner Blenk in 2009. It had been almost entirely written by January 2012, and was initially submitted in December 2012. Since the bulk of the work was completed I have had the privilege of using my academic work practically as a member of the Vanuatu Tripartite Labour Advisory Council. I have the greatest respect for all the people who have worked, and continue to work practically on employment law reforms in Vanuatu, including colleagues on the Vanuatu Tripartite Labour Advisory Council, International Labour Organisation advisors, members of the Vanuatu Chamber of Commerce and Industry and trade union representatives. Thank you for giving me the opportunity to take work done to meet academic requirements and use parts of it in practice, hopefully for the benefit of all. i ABSTRACT In November 2008 the Vanuatu parliament passed a Bill to amend the Employment Act [Cap 160] (the 2008 reform), which significantly increased benefits for employees. The 2008 reform caused considerable consternation amongst employers. This event led to my desire to understand how and why the 2008 reform happened and to identify a strategy to avoid such potentially disruptive employment law reforms in the future. The first part of the thesis develops an understanding of the 2008 reform. My argument contends that whilst the 2008 reform was publically stated to align with Vanuatu’s labour policy of increasing decent work opportunities by promoting international labour standards it did not, in fact, consistently do so and is likely to have had a negative impact on the decency of work opportunities. It was, however, able to occur because Vanuatu’s political environment is affected both by weaknesses in the functioning of parliament and by ideology that derives from its colonial past and post-colonial present. These political and ideological issues make it difficult to pass law reforms that are consciously aligned with policy goals. Further, there is lack of clear definition as to what the labour policy of increasing decent work opportunities involves. This also makes it difficult to develop law reforms aimed at promoting decent work. The second part of the thesis proposes a legislative assessment framework that provides indicators of decent working conditions which can be used to assess the extent to which the content of either existing or proposed laws ensure that private formal sector employees engaged under individual employment contracts are provided with conditions that respect the principle of decent work. It is designed to be a tool to both build local knowledge as to the content of international labour standards related to decent work and to provide comprehensive baseline information on how well either laws or proposed reforms meet non-prescriptive indicators associated with decent work. It is argued that this information will enable social partners to engage more systematically on contentious reforms and will help governments to develop reforms on the basis of sound factual information. ii ABBREVIATIONS ADB Asian Development Bank AFP Australian Federal Police CEACR Committee of Experts on the Application of Conventions and Ratifications CEDAW Convention for Elimination of Discrimination Against Women CRC Convention on the Rights of the Child CRD Convention on the Rights of People with Disabilities CRO Criminal Records Office CRP Comprehensive Reform Programme DWCP Decent Work Country Programme ERB Employment Relations Bill 2006 EU European Union FEMM Forum Economic Ministers’ Meeting FPRW Fundamental Principles and Rights at Work GDP Gross domestic product HIES Household Income and Expenditure Survey JBIC Japan Bank for International Cooperation ICCPR International Convention on Civil and Political Rights ICESCR International Covenant on Economic Social and Cultural Rights ICLS International Conference of Labour Statisticians IFIs international financial institutions ILC International Labour Conference ILO International Labour Organisation ILS International labour standards IMF International Monetary Fund ISS Informal Sector Survey MAP Monitoring and Assessing Decent Work project MDGs Millennium Development Goals NHNP New Hebrides National Party NUP National United Party OSH Occupational safety and health PAA Priorities and Action Agenda iii PIF Pacific Island Forum REDI Rural Economic Development Initiative TLAC Tripartite Labour Advisory Council VAT Value added tax VNPF Vanuatu National Provide Fund UCNH Union des Communautes des Nouvelles-Hebrides UDHR Universal Declaration on Human Rights UK United Kingdom UMP Union of Moderate Parties UN United Nations UNECOSOC United Nations Economic and Social Council UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Program VIPA Vanuatu Foreign Investment Promotion Authority VP Vanua’aku Pati WPHC Western Pacific High Commission WTO World Trade Organisation iv TABLE OF CONTENTS INTRODUCTION 1 Personal note 1 The thesis topic 4 Scope: substantive law, private sector, formal sector 6 Why not focus on collective bargaining? 7 Significance of the topic 11 Structure 13 CHAPTER 1 THE VANUATU CONTEXT 16 Introduction 16 Overview of Vanuatu 17 The legal system 22 Employment law 24 The legislative process 25 The socio-political context of the legislative process 27 The labour market environment 33 The labour force 33 Employers 38 Key formal sector employment issues 40 Unemployment and underemployment 40 Unemployment and crime 42 Oversupply of unskilled labour, undersupply of skilled labour 43 Low wages for low-skilled workers? 44 Current policy responses to employment issues 45 The PAA: Private sector led development 45 Ideological foundations of the PAA 46 The Decent Work Country Programme 49 Ideological foundations of decent work 50 Labour market policy challenges 52 Conclusion 57 CHAPTER 2 ‘THIS BILL WILL CAUSE LARGE SCALE UNEMPLOYMENT IF GAZETTED’: THE 2008 REFORM 59 Introduction 59 The 2008 Reform 59 Overview of the changes 59 Impact of the 2008 reform: productive labour costs 61 Scenario 1: The employee has worked less than 20 years and takes no maternity leave 64 Labour costs using the pre-2008 law 64 v Labour costs using the 2008 reform 65 Scenario 2: The employee has worked for between 20 and 25 years and takes no maternity leave 65 Labour costs using the pre-2008 law 65 Labour costs using the 2008 reform 66 Scenario 3: The employee has worked less than 20 years and takes maternity leave 66 Labour costs using the pre-2008 law 66 Labour costs using the 2008 reform 67 Scenario 4: The employee has worked for between 20 and 25 years and takes maternity leave 67 Labour costs using the pre-2008 law 67 Labour costs using the 2008 reform 67 Scenario 5: The employee works for 10 years before resigning and takes 3 periods of maternity leave in this time 68 Labour costs using the pre-2008 law 68 Labour costs using the 2008 reform 68 Summary 68 Impact of the 2008 reform: liabilities 70 Impact of the 2008 reform: employment and foreign investment 71 Reactions to the 2008 reform 74 Reasons for the reform? 80 The constitutional challenge 89 Current state of the law: the 2009 reform 91 Conclusion 95 CHAPTER 3 ‘DOES THE GOVERNMENT KNOW WHAT IT IS DOING?: ASSESSING THE 2008 REFORM 97 Introduction 97 Structure 101 Annual leave 102 Did the reform increase compliance with international labour standards? 103 Costs and benefits in respect of achieving government policy 105 Maternity protection 109 Did the reform increase compliance with international labour standards? 111 Costs and benefits in respect of achieving government policy 115 Severance allowance 120 Did the reform increase compliance with international labour standards? 123 Costs and benefits in respect of achieving government policy 126 Conclusion 128 vi CHAPTER 4 ‘OUTDATED COLONIAL LAWS’: RELATING THE NARRATIVE TO VANUATU 133 Introduction 133 Initial experiences of employment 135 Pre colonisation 135 Colonisation 136 Historical experiences and the contemporary perception of employment law 140 The broader post-colonial dynamic 140 State law vs kastom 140 Kastom vs development 143 Summary 147 Government policy 148 “Self reliance” and “Melanesian socialism”:The first and second national development plans 148 “Economic reality”: The third national development plan 150 “Neo-colonial hijacking”: The CRP and PAA 151 “Resistance”: The national self-reliance strategy 152 Summary 157 An ideological driver for of the 2008 reform? 157 Conclusion 161 CHAPTER 5: DEVELOPING A FRAMEWORK FOR REFORM 163 Introduction 163 Objectives of the framework 164 Goal: Decent work 164 Role: Non-prescriptive legal indicators 165 Limitations 167 Defining decent work: Survey of literature 170 Approaches to legal indicators for decent work 177 A descriptive approach 177 An index approach 178 A textual approach