DEVELOPING DECENT WORK CONDITIONS: A STUDY OF EMPLOYMENT REFORM FROM

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 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 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 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 179 Developing a framework of legal indicators for decent work 180 Selection of approach 180 Scope 181 Developing the indicators 181 Presenting the framework 183 Conclusion 185

CHAPTER 6: LEGAL INDICATORS FOR DECENT WORK: A FRAMEWORK FOR LEGISLATIVE ASSESSMENT 186 Introduction 186

vii

Selection of indicators 187 Wages protection 190 Sources of decent work indicators 190 Table of decent work indicators for the protection of payment of wages 191 Paid annual leave 193 Sources of decent work indicators 193 Table of decent work indicators for paid annual leave (for full time employees) 194 Maternity protection 197 Sources of decent work indicators 197 Table of decent work indicators for maternity protection (for full time employees) 198 Termination of employment 202 Sources of decent work indicators 202 Table of decent work indicators for termination of employment 203

CHAPTER 7: APPLYING THE FRAMEWORK 207 Introduction 207 Protection of wages 208 Summary 208 Application 208 Medium of payment 209 Payment of wages in event of employer bankruptcy 209 Freedom to dispose of wages 209 Deductions from wages 209 Period, time and place of payment 210 Information on wages 210 Paid annual leave (full time employees) 217 Summary 217 Application 217 Eligibility 217 Length of leave 218 Taking leave 219 Payment whilst on annual leave 219 Unused leave on termination of employment 220 Maternity protection (full time employees) 225 Summary 225 Application 225 Duration of leave 225 Cash benefits 225 Employment protection and non-discrimination 226 Health protection 227 Other related leave 228

viii

Termination of employment 234 Summary 234 Application 234 Justification for termination 235 Procedure for termination 236 Procedure for appeal 237 Period of notice 238 Severance allowance and other income protection 238 Termination because of redundancy (economic, technological, structural or similar reasons) 239 Conclusion 248

CONCLUSION 249

BIBLIOGRAPHY 254

ix

LIST OF FIGURES

Figure 1.1: Labour force by occupation, 2009 34 Figure 1.2: Formal sector employment by type of employment 2000 36 Table 1.1: Private formal sector businesses by industry 2000 (% of business licenses issued per industry category) 38 Table 1.2: Informal sector business licenses by location and sector 2000 39 Figure 1.3: Urban population and informal sector employment 1979 - 2009 41 Table 2.1: Summary of changes to the Employment Act [Cap 160] by the 2008 reform 60 Table 2.2: Summary of impacts on labour costs of the pre-2008 law and the 2008 reform 69 Table 2.3: VIPA statistics on business approvals and renewals 73 Table 2.4: Summary of changes to the Employment Act [Cap 160] by the 2008 reform and the 2009 reform 93 Table 2.5: Summary of impacts on labour costs of the pre-2008 law, the 2008 reform and the 2009 reform 94 Textbox 3.1: Changes to annual leave provisions in the Employment Act [Cap 160] pursuant to the 2008 reform 103 Table 3.1: Comparison of annual leave amounts in the Pacific, 2008 108 Textbox 3.2: Changes to maternity leave provisions in the Employment Act [Cap 160] pursuant to the 2008 reform 111 Table 3.2: Summary of ILO Convention standards on maternity leave 112 Table 3.3: Comparison of length of maternity leave amounts in the Pacific, 119 2008 Textbox 3.3: Changes to severance allowance provisions in the Employment Act [Cap 160] pursuant to the 2008 reform 123 Table 3.4: Comparison of severance amounts in the Pacific, 2008 127 Figure 5.1: Salais’ ethical approach to the use of indicators 167

x

INTRODUCTION

PERSONAL NOTE

In November 2008, with no prior public discussion or notification, the Vanuatu Parliament passed a Bill to amend the Employment Act [Cap 160]. The Employment (Amendment) Bill 20081 (the 2008 reform) significantly increased benefits for employees. For example, the 2008 reform increased severance allowance payments 300%, from 2 weeks’ salary for each year worked to 2 months’ salary for each year worked and doubled the amount of payment received by women taking maternity leave. These, and other changes, caused considerable consternation amongst employers who responded to the 2008 reform by stating that job losses and business closures would result because of increased costs. A number of businesses also terminated staff.2

I was not a neutral observer in these events. As well as being an employee of the University of the South Pacific, I have an interest in a local small business, and many of my friends own small businesses in Vanuatu. Following the 2008 reform I was asked by a number of people to explain the law, as well as asked for advice on issues such as legal procedures for termination of employment and drafting new employment contracts that would minimise the impacts of the 2008 reform on businesses.3 I was also a member of the technical committee established by the Vanuatu Chamber of Commerce and Industry to respond to this reform.

My enduring memory of this time is one of uncertainty and upset. My perception was that the radical shift in employment law undermined confidence in the business environment amongst both existing business owners and people who were

1 In Vanuatu after Bills have been passed by Parliament they do not immediately become Acts. Instead they only become Acts after the President has assented to them (Article 16(4) of the Republic of Vanuatu). As discussed in chapter two assent by the President did not occur until 8 June 2009, at which time the Bill became an Act. As all public discussion in this thesis of the piece of legislation occurred prior to June 2009, the law is referred to as a Bill. 2 This is discussed further in chapter two. 3 I am admitted to practice in Vanuatu as an “academic lawyer”, a category which does not permit engagement in private practice for personal gain, but which permits the undertaking of pro bono work for the purposes of training students (Part VI Legal Practitioners Act [Cap 119]). As I teach labour law some practical experience in the area helps me to ensure that this course remains relevant to the “real world” rather than “academic” understanding of labour law. 1

considering investing in Vanuatu. Conversations about whether to “sell up or close up” amongst business owners were common. Once businesses began to take the step of terminating staff, it was also, no doubt, a period of uncertainty for employees, who were not sure if they would keep their jobs, or what conditions they would be offered if they had an opportunity for re-employment. Most businesses in Vanuatu are small businesses. Because of this, close relationships between employers and staff are often formed. Having to terminate staff or renegotiate contracts on different conditions in order to avoid terminating anyone’s employment was upsetting, particularly knowing that for terminated staff it would be difficult to find another job.4

The timing of this major disruption could not have been much worse. Whilst Vanuatu has not suffered as greatly as some Pacific countries from the Global Financial Crisis,5 the effects of increased fuel prices on both local transport and transport to import and export goods and on electricity prices (which is primarily produced by diesel generators) were hitting both families and businesses at this time. In 2008 Vanuatu’s inflation rate for the year was 5.8%, which was the highest it had been since the turn of the century.6

The news headline ‘Businesses terminating employees “Does the Government know what it is doing?”’7 summed up the dominant public reaction to the 2008 reform, at least as portrayed by the media. This evolved, in my mind, into the broad research question of, if the 2008 reform really was as potentially destructive as employers made it out to be, then why was the reform made?

Ultimately, whilst the Employment (Amendment) Act 2008 did come into force, parts of it were immediately amended by the Employment (Amendment) Act 2009 (the

4 Stiglitz notes that in developing countries that do not have unemployment insurance the social cost of unemployment includes ‘widespread anxiety even among workers who have kept their jobs [and] additional financial burdens on family members who manage to remain employed.’ He also observes that domestic firms ‘may be attuned to the social context’ and has ‘forcefully observed’ a dynamic in Korea where domestic employers ‘felt an enormous social responsibility in letting their workers go’. (Joseph Stiglitz, Globalization and its Discontents (2002) 57.) My experience in Vanuatu suggests the same dynamic exists here. 5 Ron Duncan and Carmen Voight-Graf ‘Pacific Labour Market Scenarios: Economic crisis, climate change and decent work’ (Background Paper, ILO Decent Work for Sustainable Development in the Pacific Tripartite High Level Meeting, , Vanuatu, 8 – 9 February 2010) 9. 6 Reserve Bank of Vanuatu, Quarterly Economic Report December 2008 (2009) 15. 7 Bob Makin, ‘Businesses terminating employees “Does the Government know what it is doing?”’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008, 1. 2

2009 reform), which was gazetted at the same time as the Employment (Amendment) Act 2008. Again the contents of the 2009 reform were not made available to the public and were not open for public discussion prior to enactment.8 I had also heard from kava bar conversations9 with International Labour Organisation (ILO) representatives that the earlier Employment Relations Bill 2006 (ERB 2006), which had been drafted by a consultant engaged by the ILO and was intended to be a comprehensive reform of all aspects of employment law, was still being promoted within the Vanuatu Department of Labour for enactment.10 However, the draft of the ERB 2006 that I had seen11 was considerably less generous to employees in areas such as severance,12 sick leave13 and annual leave14 than the pre-reform Employment Act [Cap 160] was. I became interested in investigating the fact that three different reforms which were all, apparently, about promoting good working conditions,15 came to different conclusions as to what good working conditions are. This led to another broad research question: what is meant by “good working conditions”?

Another factor contributing to the development of my research question was my observation of the slow evolution16 of the Employment Relations Promulgation 2007

8 The 2009 reform may have been the subject of the tripartite Labour Advisory Board meetings, which is a board established by statute which contains representatives of employers, employees and government. However, there are no publically available records of the Labour Advisory Board having met and, if it did meet, the representatives on the Board did not consult with the constituents that they were meant to be representing in any manner that was made known to all constituents. 9 Kava is a traditional drink in Vanuatu with nakamals being traditional places to exchange information. This practice has transferred to the urban environment, although a kava bar conversation should not be taken as a formal or official statement of position. 10 Again, however, there was no open or public discussion on this Bill probably because discussions were being kept between selected government employer and employee representatives who were not either informing or consulting with their constituents in any effective way. 11 Letter from Commissioner of Labour Lionel Kaluat to Anita Jowitt, 5 April 2006. 12 Section 108 of the ERB 2006 required the employer to pay 1 week’s wages for year worker in the event of termination by the employer due to redundancy, whereas Part 11 of the Employment Act [Cap 160] provided 15 days salary per year worked for employees terminated on a wider number of grounds than redundancy. 13 Section 58 of the ERB 2006 provided 10 days paid sick leave per year whereas section 34 of the Employment Act [Cap 160] provided 21 days paid sick leave per year. 14 Section 59 of the ERB 2006 provided 10 days paid annual leave per year whereas section 29 of the Employment Act [Cap 160] provided 12 days paid annual leave per year, with the amount increasing with length of service. 15 The rationales for the 2008 reform and the 2009 reform are discussed further in chapter two. The long title of the ERB 2006 states that the primary purpose of the law is ‘[c]reating a fair and optimum working environment through the maintenance of minimum and acceptable labour standards that are fair to both workers and employers…’ 16 There were 10 years of consultations before Fiji’s Bill was finally tabled in Parliament. (Parliament of Fiji, ‘Report of the Sector Standing Committee on Social Service the Employment Relations Bill’ (Parliamentary Paper 49 of 2006) 5.8.1 3

(Fiji), which is very similar in content to Vanuatu’s ERB 2006. Despite years of consultation it was very controversial when finally passed, drawing criticism from both employers17 and trade unions.18 Clearly the issue of how to balance employer and employee interests during employment law reform was not unique to Vanuatu, and is likely to be shared by many other small island developing states both within and outside the Pacific islands region.

THE THESIS TOPIC

The first part of the thesis is exploratory research that develops an understanding of the 2008 reform. It assumes that impact analysis is at the core of policy evaluation and public policy interventions19 and analyses the impact of the 2008 reform (both actual and anticipated – as the reform never came into effect) on the promotion of decent work opportunities.

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 increase conformity to international labour standards. Further, economic analysis suggests that the 2008 reform was likely to have had a negative impact on the decency of work opportunities and may have also hindered the availability of work opportunities. As

http://www.parliament.gov.fj/legislative/bills.aspx?billID=308&viewtype=reports&billnav=bill (Accessed 12 January 2011). 17 See, for example, ‘Fiji’s Employment Relations Bill Shelved for 6 Months’ Radio New Zealand International 21 September 2007 http://www.rnzi.com/pages/news.php?op=read&id=35281 (Accessed 15 January 2011); ‘Maternity law worries bosses’ Fiji Times online 5 April 2008 http://www.fijitimes.com/story.aspx?id=85587 (Accessed 15 January 2011). 18 ‘Trade unions to challenge employment relations bill’ Fiji Times online 13 December 2007 http://www.fijitimes.com/story.aspx?ref=archive&id=76450 (Accessed 15 January 2011); Fijian Teachers Association v President of the Republic of Fiji Islands [2008] FJHC 59 http://www.paclii.org. Whilst the trade union challenge was on the grounds that the interim military government which had taken over following a coup in December 2006 did not have the authority to make laws, given that the Bill had a long history of consultation and had been passed in the lower house of Parliament prior to the coup it seems to have been a strange law to challenge, unless there were also underlying objections to its content. 19 This is discussed further in chapter 3, but briefly, ‘impact analysis can be justly regarded as the core of policy evaluation. This simply reflects the fact that in modern societies public policy interventions tend to be justified primarily through their intended and actual impacts in their respective target areas.’ (Gunther Schmidt, Jacqueline O’Reilly and Klaus Schomann, ‘Theory and Methodology of Labour Market Policy and Evaluation: An Introduction’ in Gunther Schmid et al (eds), International Handbook of Labour Market Policy and Evaluation (1997) 1, 2. 4

such impact analysis of the 2008 reform indicates that it cannot be justified as achieving stated policy goals.

As the impact analysis indicates that the 2008 reform would have hindered the promotion of decent work opportunities it then raises the question of, what policy objectives was the government trying to further in making the 2008 reform? My argument contends that the 2008 reform occurred because of a combination of the political and labour policy environment. Vanuatu’s political and labour policy environment is affected both by weaknesses in the functioning of the democratic Parliament and by a narrative of the relationship between employers and employees that derives from its colonial past and post-colonial present. These issues make it difficult to neutrally assess the impact that employment law reforms will have on policy goals.

Further, there is lack of clear definition, both domestically and at an international level, as to what the policy of increasing decent work opportunities involves. This issue makes it difficult to clearly align the content of law reforms with policy.

The answers developed in the first part of the thesis give rise to another question: how can developing states take international labour standards into account in their policy development processes when undertaking law reforms that aim to establish minimum standards relating to decent working conditions for private sector employees?

This question is addressed in the second part of the thesis, which builds the case for the need for a tool to assist the government of Vanuatu (and other countries that are similarly placed) to determine the extent to which laws or proposed reforms provide decent working conditions, as defined by international labour standards. It is argued that such a tool would enable social partners to engage more systematically on contentious reforms and would help governments to develop reforms on the basis of sound factual information. The latter chapters propose a legislative assessment framework (“the framework”) that provides indicators of decent working conditions, and demonstrates the use of the framework.

5

Scope: substantive law, private sector, formal sector

There are three parameters to this study. First, because my topic evolved out of the 2008 reform, which focused upon the content of substantive laws which ‘directly regulate the individual employment contract’,20 the thesis also focuses upon the content of substantive laws.

Second, the 2008 reform primarily affected the private sector, and part of my concern is how employment law reform, if done “badly”, can affect the operation of the private sector. The thesis therefore specifically focuses upon substantive laws that regulate private sector employment contracts, and does not consider regulation of the public sector.

Third, the private sector can be divided into the formal sector and the informal sector.21 Current employment law in Vanuatu does not distinguish between formal and informal sector employees. However, in the informal sector ‘typically employee numbers are low and labour is often provided by (sometimes unpaid) family members.’22 The casual nature of labour practices in the informal sector, coupled with the very nature of informality give rise to a different set of issues (including non-compliance issues23) to those faced within the formal sector. As substantive employment law is, in practice, primarily used to regulate employment practices in

20 Simon Deakin & Frank Wilkinson, ‘Labour law and economic theory: a reappraisal’ in Gerrit De Geest, Jacques Siegers & Roger Van Den Bergh (eds) Law and Economics and the Labour Market (1999) 1, 3. Substantive laws can be contrasted with procedural laws, which create the framework within which labour market mechanisms (such as collective representation), and institutions (such as tribunals and labour inspectorates) operate and promotional laws which ‘are concerned with enhancing labour market opportunities through activities such as [activities such as] training’ (Ibid) and job creation schemes. 21 In Vanuatu the private formal sector is defined as private sector businesses that have a turnover of 4 million vatu or more and are registered for value added tax (VAT), or are VAT exempt. (Vanuatu National Statistics Office, Vanuatu 2000 Labour Market Survey Report (2000) 7-8.) Attributes of formal sector businesses are that ‘labour is typically provided by employees who are paid a wage or salary. Business is carried out in an organised and systematic way within the government tax system.’ (Ibid, 8.) Informal sector businesses are smaller, with a turnover of less than 4 million vatu. 22 Ibid, 8. 23 See, for example, Anita Jowitt, ‘Do employers comply with and use employment contract law? A study from Port Vila, Vanuatu’ (Paper presented at the Regional Conference on Institutions, Globalisation, and their Impacts on Labour Markets in Pacific Island Countries, 17 – 19 October 2006, University of the South Pacific School of Economics, Suva, Fiji) 8, which indicates that kava bars are the business sector that is least compliant with employment law. Kava bars, whilst required to be licensed by the municipality, are primarily informal sector businesses. 6

formal sector businesses24 this thesis only examines substantive laws from the perspective of the formal sector, and does not take into account any additional or different issues that may arise in an informal business setting.

Consistent with this focus, the term employees is used to refer specifically to private formal sector employees engaged under individual employment contracts unless otherwise specified.

Why not focus on collective bargaining?

Kahn Freund’s model of “collective laissez-faire” in which trade unions negotiate freely with employers or employers’ associations involves the focus of labour law being on developing procedural rules to permit, or ensuring the absence of rules to prevent, collective bargaining. The collective laissez-faire model of labour law implies that, if employees are permitted to form trade unions and bargain collectively, this will overcome any imbalances of power that individual employees might experience and will ensure that employees’ rights are protected.25 This model is reflected in the International Labour Organisation’s (ILO’s) Declaration on Fundamental Principles and Rights at Work 1998, which states that the first of four fundamental principles and rights is ‘freedom of association and the effective recognition of the right to collective bargaining.’26 It is also reflected in Vanuatu’s Decent Work Country Programme (DWCP). Outcome 1.1 of the DWCP is ‘improved implementation of Vanuatu’s modernised labour legislation in compliance with the International Labour Standards’.27 Indicators for this outcome include an ‘increase in the number of collective bargaining agreements.’28

24 None of the Vanuatu employment cases reported on the PacLII website (http://www.paclii.org) between 2000 and 2006 involve informal sector business. From 1999 – 2006 I also volunteered at the University of the South Pacific Community Legal Centre, which provides free legal advice to people in Port Vila. In that time I only came across one employment case involving an informal sector business. This case involved the client wanting to enforce various promises or undertakings that had been made, rather than his rights under statutory employment law. 25 See ACL Davies, Perspectives on Labour Law (2004) chapter 1 for an overview of Kahn-Freund’s model and also shifts away from that model in the UK. See also Paul Davies, ‘The Representation of Workers in the United Kingdom from Collective Laissez-Faire to Market Individualism’ (1993- 1994) 15 Comparative Labour Law Journal 167, particularly 169 – 172. 26 Article 2 Declaration on Fundamental Principles and Rights at Work 1998. 27 International Labour Organisation, ‘Decent Work Country Programme Vanuatu’ (2009) 16. In 2014 a further Memorandum of Understanding between the Government of Vanuatu, the International Labour Organisation, Employers and Workers was signed a Memorandum of Understanding implementing the Decent Work Country Programme 2014 – 2016. This affirmed the parties 7

Whilst the DWCP does not exclude the possibility of employment law playing a role in setting minimum standards to protect employees who are not covered by collective agreements or well represented by unions, legislated employment rights for individual employees is not its focus. Given that the DWCP focuses on collective bargaining, it could be said that establishing a framework to assist law reform in relation to conditions of individual employment contracts is “missing the point”. Indeed, some commentators might argue that focusing upon substantive laws that regulate the individual employment contract is “buying in” to an individualistic neo- liberal agenda which is intrinsically harmful to employees’ rights.29

However, my position is that focusing upon substantive laws that regulate the individual employment contract is appropriate for Vanuatu. First, Vanuatu’s union movement is not strong. Unions were not a powerful political force in the lead-up to Independence.30 Post-Independence they also have not had a strong presence. This can partially be attributed to strike actions in 1993 and 1994 which resulted in strikers’ employment being terminated.31 The US Department of State estimated in 1999 that following these unsuccessful strikes union membership in Vanuatu declined from over 4000 to less than 1000.32 Assuming that all members were employed within the formal sector, only about 7% of formal sector employees were

‘commitment to collaborate in the implementation of the Decent Work Country Programme (DWCP)’ The first priority remained ‘completion of labour law reform and implementation’. (International Labour Organisation, ‘Decent Work Country Programme Memorandum of Understanding Vanuatu’ (2014).) 28 Ibid. Other indicators related to this outcome are ‘compatibility of the revised Employment Relations Bill with the ILS’ and ‘existence of proper dispute settlement procedures.’ 29 See, for example, Anna Pollert and Paul Smith, ‘The Limits of Individual Employment Rights: The reality of neoliberalism’ in Roger Blanplain (ed), The Modernisation of Labour Law and Industrial Relations in a comparative Perspective (2009)113, 113 – 115. 30 The first general (non industry specific) trade union was promoted, in 1973, by the anti- Independence Union des Communautes des Nouvelles-Hebrides (UCNH) in an attempt to garner support from ni-Vanuatu. Whilst this union did not last long, by 1975 the Commercial and Industrial Workers Trade Union was established, and finally granted registration by the colonial government in 1977. Unions were not overly involved in the independence movement, with Kalsakau stating that following the abortive union attempt by the UCNH ‘no further attempt was made in the lead-up to independence to involve ni-Vanuatu workers in politics’. (Ephraim Kalsakau, ‘Labour and Politics’ in Howard Van Trease (ed), Melanesian Politics: Stael Blong Vanuatu (1995) Melanesian Politics, 407.) See also Michael C Howard, ‘Wage Labour and Unions in Vanuatu’ (1983) 4 USP Sociological Society newsletter 23; Kevin Hince, ‘The Emergence of Trade Unionism in the New Hebrides (Vanuatu)’ (1996) 19 Journal of Pacific Studies 1. 31 Hince, ibid, provides an overview of these events. 32 US Department of State, ‘Vanuatu Country report on human rights practices 1999’ (2000) http://www.state.gov/g/drl/rls/hrrpt/1999/310.htm (Accessed 18 November 2010). Figures from 1999/2000 have been used because 2000 was the last year in which data on formal sector employment was collected. 8

union members in 1999.33 Only four collective bargaining agreements existed in Vanuatu in 2008.34 The lack of political success of the Vanuatu Labour Party is another indicator of a fairly weak union movement. Although the Vanuatu Labour Party was formed in 1987 it did not get its first representative in Parliament until 2005 when Joshua Kalsakau, who had been elected as a representative of the National Community Association Party, “defected” to the Vanuatu Labour Party.35 Whilst Kalsakau retained his seat in the 2008 national election, the Vanuatu Labour Party gained only 3.8% of the total vote in the constituencies in which they stood candidates.36 In the 2012 elections, whilst Kalsakau again retained his seat the Vanuatu Labour Party gained only 2.3% of the total vote in the constituencies in which they stood candidates.37

Second, Vanuatu’s formal sector labour market is dominated by small enterprises. In the most recent survey of Vanuatu’s formal private sector, in 2000, 89% of businesses had less than 20 employees. These businesses employed 45% of the total number of employees. Only 10 of the 939 businesses surveyed in 2000 had more than 100 employees.38 International experience indicates that small enterprises have lower rates of unionisation.39 There are various reasons for this, including that: it

33 This statistic is derived from the estimate of 1000 union member and the figure of there being 14,272 formal sector employees in 2000. (Vanuatu National Statistics Office, above n 21, 13). 34 International Labour Organisation, above n 27, 11. 35 Australian Labor’s International Projects Unit and the Pacific Institute of Public Policy, ‘Political Parties and Groupings of Vanuatu’ (2008) 24, 47. 36 Vanuatu Electoral Commission, ‘Declaration by Electoral Commission of Candidates Elected’ 10 September 2008. 37 Pacific Institute of Public Policy, ‘Election 2012 – Official Results’ (8 November 2012) http://www.pacificpolicy.org/blog/category/vanuatu-election-2012/ (Accessed 25 November 2012). 38 Vanuatu National Statistics Office, above n 21, 14. 39 The World Labour Report 1997-98 found that ‘unions have usually remained focused on workers in mass production in very large enterprises, thus ignoring the increasing numbers of workers employed in small and medium sized enterprises (SMEs), in services or in unconventional employment circumstances, such as part-time, informal and home workers.’ (International Labour Organisation, ‘ILO Highlights Global Challenge to Trade Unions’ (1997) http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang-- en/WCMS_008032/index.htm (Accessed 18 November 2010)). Whilst data sources on unionisation in SMEs are not abundant, Dundon et al note that in the UK ‘less than 1 per cent of those employed in small (private) sector establishments are members of trade unions.’ (Tony Dundon, Irena Grugulis and Adrian Wilkinson, ‘“Looking out of the black-hole” Non-union relations in an SME’ (1999) 21(3) Employee Relations 251, 253.) Similar results have been found in Germany, with larger firms having higher percentages of union membership (Claus Schnabel and Joachim Wagner, ‘Determinants of Trade Union Membership in Western Germany: Evidence from Micro Data, 1980-2000’ (IZA Discussion Paper 708, January 2003.) Fenwick et al provide some data on unionisation within small enterprises in developing countries. Again rates are low. (Colin Fenwick, John Howe, Shelley Marshall & Ingrid Landau, ‘Labour and Labour-Related Laws in Micro and Small Enterprises: 9

may be too costly for unions to try to organise within small enterprises; 40 the “family culture” of small enterprises may be hostile to the establishment of unions;41 and employment practices in small enterprises tend to be characterised by informality and less stability of employment which makes it difficult for a union to organise.42

Vanuatu’s union activity has followed the international trend and focused on larger employers. The strike activities in 1993-1994 involved the public service, which is Vanuatu’s largest employer and in 2009 employed 26% of the formal sector workforce.43 Between 2005 and 2009 reported union activities involved UNELCO, which has over 100 employees,44 Air Vanuatu, which also has over 100 employees,45 and Vanuatu Abattoirs Ltd, which has about 80 employees.46

For these two reasons Vanuatu’s private formal sector employees are currently likely to be employed on individual contracts and are unlikely to be in a position to have their interests protected via collective action. Until the collective environment has become stronger, it may undermine employees’ access to decent work if statutory minimum guarantees for employees employed under an individual employment contract are overlooked by law reform initiatives that focus mainly upon strengthening collective bargaining.

Innovative Regulatory Approaches’ (University of Melbourne Legal Studies Research Paper No. 322) 48 – 49.) 40 For instance, in the United States ‘anecdotal evidence suggests that unions tend to shy away from trying to organize small companies [because] the resources expended to organize a small workplace and administer the contract seldom ever returned in the form of dues payments.’ (Stuart Basefsky and Sean Sweeney, ‘Employment Relations in SMEs: The United States’ (Undated, Cornell School of Industrial and Labor Relations) [3.2] http://www.ilr.cornell.edu/international/news/upload/BERLIN%20SME%20report.pdf (Accessed 18 November 2010).) 41 Martin McCracken and Michael Sanderson, ‘Trade union recruitment: strategic options?’ (2004) 26(3) Employee Relations 274. See particularly 281 – 282. See also Dundon et al, above n 39. 42 Fenwick et al, above n 39, 50. 43Vanuatu National Statistics Office, 2009 National Population and Housing Census Basic Tables Report, Volume 1 (2011) 127. 44 UNELCO, ‘Profile’ (undated) http://www.unelco.com.vu/en/ (Accessed 10 June 2015). 45 Phone conversation, Mr Reynold, Human Resources Manager, Air Vanuatu Ltd, 19 November 2010. 46 Phone conversation, Susanne Vira, Accountant, Vanuatu Abattoirs Ltd, 19 November 2010. 10

Significance of the topic

There are a number of reasons why this topic is of significance. First, the thesis is useful to ongoing debate in Vanuatu47 about how to reform employment law. The examination of the 2008 reform provides detailed analysis of matters that could, or should, be considered by policy makers in respect of reforming laws relating to the specific areas of annual leave, maternity leave and severance allowance. Further, although the 2008 reform never came into force in its entirety the controversial nature of both the content of the reform and the process by which it was made render visible the challenges of employment law reform in these areas which are, maybe, less apparent when reforms are more incremental. The framework presented in the latter chapters can also be used by the developers of Vanuatu’s new employment legislation to help guide discussion on particular areas of the law that might be under consideration for reform.

Second, the contemporary history of the 2008 reform and analysis of the broader policy context in which it arose adds to the academic literature on Vanuatu’s policy environment and contributes to understandings of the political aspects of law reform in Vanuatu. The thesis provides a record of a law-making process that does not fit political ideals associated with the modern democratic nation state. Instead, law was introduced to Parliament without prior public notification, input or debate. There was no publically available policy document which provided an analysis of the likely impact of the Bill. The Bill was passed over the course of two days, with debate being limited to the Committee of the whole House of Parliament. It was not referred to a smaller parliamentary committee for deeper analysis or discussion of the implications of the Bill. Debate within the Committee of the whole House of Parliament was superficial. Whilst this law-making process is common in Vanuatu, it is, perhaps, unfamiliar to those in more mature democracies. The 2008 reform

47 In late 2010 the Employment (Amendment) Act 2010, which abolished the labour advisory board and reestablished it as the Tripartite Labour Advisory Council was passed by Parliament. On 1 May 2011 the Tripartite Labour Advisory Council was launched in Vanuatu (International Labour Organisation, ‘Tripartite Labour Advisory Council launched in Vanuatu’ (2011) http://www.ilo.org/asia/info/public/pr/WCMS_155453/lang--en/index.htm (Accessed 14 May 2012)). The first activity the new Council has undertaken has been reviewing Vanuatu’s employment law (International Labour Organisation, ‘Breakthrough in reforming labour legislation in Vanuatu’ (2011) http://www.ilo.org/suva/information-resources/public-information/press- releases/WCMS_160856/lang--en/index.htm (Accessed 14 May 2012)). 11

provides clear illustration that one cannot assume that there will be analytical policy development processes before Bills reach Parliament, parliamentary committee processes to ensure that laws are carefully debated from a range of political perspectives or opportunities for the public to be involved or consulted before laws are finally put to the vote. It also illustrates how post-colonial narratives may take the place of reasoned policy in the law making process, to the detriment of the achieving desired policy outcomes. It therefore acts as a cautionary tale, particularly for external advisors from mature democracies that come to Vanuatu to help develop laws.

Third, whilst Pacific countries all face different issues, they also have some similarities.48 The framework that is proposed in the latter chapters of the thesis can be applied to other countries within the region. A number of significant national law employment law reform activities have either recently been undertaken or are underway,49 so the thesis is particularly timely. Similar DWCPs can be in found in ILO member countries across the globe,50 so the framework may also be useful in other parts of the world.

The 2008 reform also illustrates how international labour standards can be misused in law reform if they are not refracted through a context-sensitive lens. Whilst local policy developers are best placed to be sensitive to context the 2008 reform also illustrates the extent to which policy developers in Vanuatu (and, maybe, other similarly technically limited post-colonial countries) have limited capacity use international labour standards in a context appropriate manner. As such it highlights the need for capacity building in this area.

48 For an overview of similarities and differences of Pacific countries and economies see Anita Jowitt, ‘Reconceptualising Labour Markets in the South Pacific’ (2002) 6 Journal of South Pacific Law http://www.paclii.org/journals/fJSPL/vol06/4.shtml (Accessed 10 January 2011). 49 See for example the Employment Relations Promulgation 2007 (Fiji); the Employment Relations Bill 2006 (Tonga); and the Employment Relations Bill 2006 (Vanuatu). Kiribati, Tuvalu, Vanuatu, Papua New Guinea, Samoa and Solomon Islands are all currently implementing Decent Work Country Programmes in conjunction with the International Labour Organisation. (International Labour Organisation, ‘Employment promotion: ILO Office for Fiji, Papua New Guinea, Solomon Islands, Kiribati and other South Pacific islands’ (Undated) http://www.oit.org/asia/areas/lang--en/facet-- LOC.ASIA-_-ASIA.EMP-_-ORG-_-ASIA----RO-BANGKOK----ILO-SUVA-_- 2629/WCMS_DOC_ASI_ARE_EMP_EN/index.htm (Accessed 18 November 2010). 50 The full list can be found at International Labour Organisation, ‘Decent Work Country Programmes: Programmes by Country/Subregion’ (undated) http://www.ilo.org/public/english/bureau/program/dwcp/countries/index.htm (Accessed 22 September 2012). 12

Currently developing countries tend to rely on the ILO for technical assistance in conducting legislative assessments of the extent to which national law conforms to international labour standards. This reliance on external assistance can reduce the sense of national ownership of law reforms. There is also a potential danger in over- reliance on external assistance from an organisation which has a vested interest in seeing countries adopt international standards that it promotes. Externally conducted legislative assessments may not be the most effective way to build local knowledge of international labour standards, and do not systematically build countries’ internal capacity in respect of conducting legislative assessments, which is an initial stage in the development of legal policy reform. Undermining local capacity development at this stage may in turn undermine the extent to which local policy developers that are not used to using impact analysis consistently are confident to recommend the adaptation of standards to local conditions on the basis of an assessment of their potential impacts.

Finally, at an international level, attention has recently begun to focus on “how to measure decent work”. So far, however, approaches for measuring the content of laws have not been well developed. The framework that is proposed in the latter part of the thesis draws on and extends existing work carried out by the ILO on measuring decent work, and so can contribute to international debate on how to assess the “decency” of laws that regulate the content of individual employment contracts.

Structure

Chapter one contextualises the challenges surrounding the development of employment law in Vanuatu. It introduces readers who may be unfamiliar with Vanuatu to the nature of the country, its legal system and labour market environment. It also identifies key labour market issues, the government’s current policy responses to those issues and specific labour market policy challenges.

Chapter two provides a summary of the catalysing event that underlies this study: the 2008 reform. It begins by providing an overview of the changes brought about by the

13

2008 reform, and analyses the potential impact that these changes would have on labour costs and employer liabilities. It then describes the public reaction to the 2008 reform and the public perception of what drove the reform. The chapter concludes by explaining the aftermath of the 2008 reform. The discussion in chapter two is used to clarify further analytical questions about the content of the 2008 reform.

Chapter three analyses the extent to which the 2008 reform to annual leave, maternity leave and severance allowance could be justified to a reasonable audience on the basis that it fulfilled stated policy objectives. It develops the position that, whilst the stated aim of the 2008 reform was to bring Vanuatu’s laws into compliance with international labour standards, which in turn relates to the government policy of increasing decent work opportunities, a close examination of the content of the 2008 reform indicates that it did not consistently increase compliance. Indeed, it may have had a negative impact on the decency of work opportunities and may also have hindered the availability of work opportunities. Chapter three concludes that the 2008 reform was not, in sum, justifiable. This then raises the question of why the reform was made.

Chapter four considers the ideological dimensions of the 2008 reform. It explores how Vanuatu’s history and post-colonial context have created a narrative that sees employers as (primarily foreign) exploiters of (local) employees and employment law as the protector of the exploited local. It argues that, as the 2008 reform was situated as promoting local interests and resisting foreign oppression it was able to be uncritically accepted, with little regard to the “truth” of claims that current laws did not provide decent working conditions, or consideration of the consequences of the reforms.

Chapter five proposes a tool to help avoid narratively driven employment law reforms in the form of a framework that provides indicators of the extent to which the content of either existing or proposed laws provide conditions that respect the principle of decent work. The chapter begins by explaining the fundamental objective of the framework and why this objective has been selected. The chapter then surveys other approaches that have been taken to defining and assessing decent work. This survey is used to develop the approach taken in the framework.

14

Chapter six continues development of the framework. It explains in more detail the principles for deriving indicators. It then uses those principles to derive indicators in the four areas of payment of wages, annual leave, maternity protection and termination of employment.

Chapter seven demonstrates the use of the framework by using it to conduct a baseline legislative assessment of Vanuatu’s current Employment Act [Cap 160].

The thesis concludes with some comments on the future potential of the framework.

15

CHAPTER 1

THE VANUATU CONTEXT

INTRODUCTION

The aim of this chapter is to contextualise the challenges surrounding the development of employment law in Vanuatu. It introduces readers who may be unfamiliar with Vanuatu to the nature of the country, its legal system and labour market environment. It also identifies key labour market issues, the government’s current policy responses to those issues and specific labour market policy challenges.

The chapter reviews both primary and secondary literature, including statistical sources. The paucity of reliable and comprehensive data on the labour market both in Vanuatu and more generally throughout the Pacific1 makes it difficult to provide accurate information on the labour market environment. As at December 2012 the most recent published statistics on employment in the formal sector and the informal sector came from surveys conducted in 2000.2 Household income and expenditure surveys (HIES) can also be a source of labour market data, but the most recent published HIES report at the time of initial submission of the thesis uses the 2006 HIES data.3 The 2009 national census provides the most recent population statistics,

1 Ron Duncan and Carmen Voight-Graf ‘Pacific Labour Market Scenarios: Economic crisis, climate change and decent work’ (Background Paper, ILO Decent Work for Sustainable Development in the Pacific Tripartite High Level Meeting, Port Vila, Vanuatu, 8 – 9 February 2010) 22. Specific data issues in Vanuatu are discussed further in Anita Jowitt, ‘Unemployment in Vanuatu’ (2001) October Development Bulletin 55, 55. 2 Vanuatu National Statistics Office, Vanuatu 2000 Labour Market Survey Report (2000); Vanuatu National Statistics Office, Informal Sector Survey 2000 (2000). 3 Vanuatu National Statistics Office, Vanuatu Main Report on the Household Income and Expenditure Survey 2006 (undated). In 2010 a further Vanuatu HIES was conducted but the report was not released until early 2013, after initial submission of this thesis (Release date of Vanuatu National Statistics Office, Vanuatu Household Income and Expenditure Survey 2010 (December 2012) confirmed as early 2015 by personal communication with Ernest Killion, Statistician, Economic Section, Vanuatu National Statistics Office (Port Vila, 2 July 2015)). The Preliminary Release did not contain any labour market data (Vanuatu National Statistics Office, ‘Statistics Release, HIES 2010’ (2012) https://vnso.gov.vu/index.php/component/advlisting/?view=download&fileId=2008 (Access 14 June 2015). The third report from the HIES 2012 was released in 2013 (Vanuatu National Statistics Office and UNDP Pacific Centre, Vanuatu Hardship & Poverty Report 2012: Analysis of the 2010 Household Income and Expenditure Survey (2013).) As revisions were based on data that was available at the time of submission this data is not considered further. It can be noted that the labour force engaging in paid work was estimated to be 27,590 (Vanuatu National Statistics Office, Vanuatu Household Income and Expenditure Survey 2010 (December 2012) 101). As the labour force in the 16

but does not provide detailed information on the labour market. This chapter uses the most recent data sources that were available in December 2012.

OVERVIEW OF VANUATU

Vanuatu, formerly known as the New Hebrides, is a collection of over 80 islands located in the south western Pacific.4 In 2012 its population was approximately 250,000 people.5 The population is dispersed over 64 islands, with only six islands having a population of more than 10,000 people (, Espiritu Santo, Tanna, Malekula, Pentecost and Ambae).6 Vanuatu has two urban areas, Port Vila, the capital, located on Efate and Luganville, located on Espiritu Santo. Approximately 25% of the population lives in these two urban centres.7 Peri-urban settlements are growing and it has been estimated that by 2010 75,000 people would be living in and around Port Vila and 25,000 people would be living in and around Luganville.8

The population is young, with the 2009 census data indicating about 39% was under the age of 15.9 The median age of the population in 2009 was 20.5 years.10 Population growth is rapid. The annual population growth rate between 1999 and

HIES is taken to be persons 10 years and over, and the labour forces in the census is taken to be 15 years and over, the labour force engaged in paid work as reported in the 2010 HIES aligns with the labour force engaged in paid work as reported in the 2009 census (25,006 people), discussed later in this chapter. 4 Two particularly useful sources that provide a brief overview of society in contemporary Vanuatu are Lamont Lindstrom, ‘Vanuatu’ in Ember and Ember (eds) Countries and their Cultures (2001) 2391 and Miranda Forsyth, A Bird that Flies with Two Wings: The kastom and state justice systems in Vanuatu (2009) chapter 1. For an overview of state structures see Tess Newton Cain and Anita Jowitt, National Integrity Systems – Transparency International Country Study Report: Vanuatu 2004 (2004). For more information on Vanuatu Miranda Forsyth and Anita Jowitt, ‘An Annotated Bibliography of the Literature Concerning Vanuatu’ (2006) http://www.vanuatu.usp.ac.fj/sol_adobe_documents/usp%20only/vanuatu/forsyth.htm (Accessed 20 November 2012) provides references to secondary literature dealing with a wide range of aspects of Vanuatu society. 5 In 2009 the population was 234,000, with an annual growth rate of 2.3% (Vanuatu National Statistics Office, 2009 National Census of Population and Housing Summary Release (2010) iii.) 6 Vanuatu National Statistics Office, 2009 National Population and Housing Census Basic Tables Report, Volume 1 (2011) 12 – 13. 7 The 2009 census indicates that 24.4% live in these two centres (Ibid). Whilst Lenakel, on Tanna, has recently been made a municipality the 2009 census does not include the population of Lenakel in the urban population statistics. 8 Cox et al, ‘The Unfinished State Drivers of Change in Vanuatu (2007) 15 www.ausaid.gov.au/Publications/Documents/vanuatu_change.pdf (Accessed 14 May 2012). 9 Vanuatu National Statistics Office, above n 6, iv. 10 Ibid. 17

2009 was 2.3%.11 The urban population growth rate is considerably higher than the growth rate for Vanuatu as a whole, with the annual population growth rate in urban areas being 3.5%, as compared to 1.9% in rural areas.12 The dynamics of urban growth, and in particular urban migration, are not fully understood; however it appears from the difference in urban and rural growth rates that there is a fairly significant flow of people from the rural areas to the urban areas.13

About 95% of the population is indigenous ni-Vanuatu.14 Whilst the indigenous population is broadly Melanesian, over 100 linguistically distinct cultures exist, leading a former President of Vanuatu to observe that is ‘like 100 nations inside one country.’15 Customary social systems continue to be an important aspect of social ordering. ‘Kinship ties, often referred to as the wantok system, are central to custom, and are the basis of political groupings, which tend to be small and localised.’16 Whilst traditional leaders are frequently referred to as “chiefs”, traditional authority in Melanesia is usually associated with the “big man” model of authority, ‘which is associated with cultural characteristics including “achievement of leadership status… competition for and uncertainty of authority”.’17 Whilst Melanesian societies can be either matrilineal or patrilineal, Vanuatu is patriarchal and ‘there is an enormous division among ni-Vanuatu based on gender.’18

11 Ibid. 12 Ibid. 13 Studies indicate the population is highly mobile, and circularity of movement is very common. (See, for example Gerald Haberkorn, Port Vila: transit station or final stop (1989); Richard Bedford, New Hebridean Mobility: A study of circular migration (1973). Research carried out by the Vanuatu young people’s project on young people in Port Vila indicates that less than 20 % of the 13 – 25 year olds surveyed were born in Port Vila or came here as children. Over half of the survey population had been back to their home islands in the 3 years immediately prior to the survey (Jean Mitchell, Young People Speak… A report on the Vanuatu Young People’s Project, Vanuatu Cultural Centre, April 1997-June 1998 (1998)16. In this study 1053 13 – 25 year olds residing in Port Vila were surveyed). The 2009 census indicated that about 30% of the Port Vila population had moved to Vila within the past 5 years (Vanuatu National Statistics Office, above n 6, 61). 14 The 2009 census report does not contain data on ethnicity but during the 1999 census 98.7% of the population identified as ni-Vanuatu and 99% of the population were Vanuatu citizens. (Vanuatu National Statistics Office, The 1999 Vanuatu national population and housing census: Main report (2000) 19.) The 2009 census provides data on citizenship. About 96% of the resident population are citizens by birth, with a further 3.5% being citizens by naturalisation. Expatriates (citizens of other countries who are resident in Vanuatu) account for less than 1% of the population. (Vanuatu National Statistics Office, above n 6, 27.) 15 quoted in Forsyth, above n 4, 21. 16 Anita Jowitt, Yoli Tom’tavala and Joseph Foukona, ‘ and public health’ (Technical paper prepared for Model Public Health Law for the Pacific Islands Project, La Trobe University, 2009) 3. 17 Ibid, 4, quoting Lamont Lindstrom. 18 Forsyth, above n 4, 13. 18

Vanuatu maintains a secular state, but is a “Christian country”. Its national motto is “long God yumi stanap” (in God we stand). Over 83% of the population identifies with a Christian denomination.19 Christianity is now intertwined with tradition and in relation to customary social systems ‘[r]eligious affiliation is second in importance only to kinship and neighbourhood ties’.20 Religious leaders often play a traditional leadership role.

Vanuatu has an unusual colonial history, having been colonised jointly by and Great Britain in an arrangement known as the Condominium. This arrangement commenced in 1906. On gaining Independence in 1980 Vanuatu constituted itself as a representative democracy. The President is the non-executive Head of State, with the Prime Minister being the executive Head of State.21 The country is divided into 6 provinces and there has been some decentralization of services to these provinces.22 However, Vanuatu is an underdeveloped country23 and ‘geographical considerations combined with resource considerations means that many parts of state legal systems are concentrated in urban areas, and simply do not have a presence in “the outer islands” or rural areas.’24 This fact, in combination with the existence of a strong customary social system, means that ‘many people see the state government as a remote concept with little impact on their lives.’25

Economic activity within the cash economy is principally an urban activity. Less than 14% of the rural labour force is engaged in paid employment, with a further 6% identifying as employers or self employed. The remaining rural labour force engages in voluntary work, unpaid family work, and subsistence or “subsistence plus surplus” agriculture, with the surplus being sold. In contrast 71.5% of the urban labour force

19 Vanuatu National Statistics Office, above n 6, 34. 20 Lindstrom, above n 4, 2394. 21 For more on the , executive and other institutions of government see Anita Jowitt and Krista Lee Jones, National Integrity Systems, Transparency International Country Study Report, Vanuatu Update 2006 (2007) particularly 22 – 25. 22 For more on provincial government see ibid, 55 – 60. 23 United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, ‘List of the Least Developed Countries’ (undated) http://www.un.org/special-rep/ohrlls/ldc/list.htm (Accessed 6 July 2006). 24 Anita Jowitt, ‘The Future of Law in the Pacific’ (2008) 12 (1) Journal of the South Pacific Law 43, 44 http://www.paclii.org/journals/fJSPL/vol12no1/pdf/jowitt.pdf (Accessed 8 September 2009). 25 Forsyth, above n 4, 3. 19

is engaged in paid employment, with a further 13% identifying as employers or self employed.26 One factor that facilitates this subsistence lifestyle is that in Vanuatu all land is owned by the customary land owners27 (although leases are possible) and 93% of rural households live on customary land or land occupied under informal arrangements. In contrast, in urban areas less than 31% of households live on customary land or land occupied under informal arrangements.28

Vanuatu’s gross domestic product (GDP) is primarily derived from services, including tourism and offshore financial services. Agriculture is the next most significant sector in terms of the contribution to GDP, with manufacturing being a relatively insignificant contributor.29 Vanuatu is not economically independent and aid is an important source of income for the country. In 2010 overseas development assistance accounted for 16% of gross national income.30 Vanuatu is on the United Nations list of least developed countries, primarily because its economy is small and remote and is vulnerable to natural shocks and trade shocks.31 Part of the reason for this is that Vanuatu’s economy relies on agriculture and tourism and both of these sectors are vulnerable to natural disasters including cyclones, earthquakes, volcanoes and tsunamis. The vulnerability of agriculture to shifts in world commodity prices and the vulnerability of tourism to the economic performance of its major tourism markets (currently Australia and New Zealand) are other factors outside of Vanuatu’s

26 Vanuatu National Statistics Office, above n 6, 127. 27 Article 73 Constitution of the Republic of Vanuatu. 28 Vanuatu National Statistics Office, above n 6, 189. 29 In 2011 it was estimated that agriculture accounted for 21.2% of GDP, industry accounted for 10.4% of GDP and services accounted for 68.4% of GDP. (Central Intelligence Agency, “The World Factbook’ (2012) https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html (Accessed 14 May 2012). 30 World Bank, ‘Net ODA received (% of GNI)’ (undated) http://data.worldbank.org/indicator/DT.ODA.ODAT.GN.ZS (Accessed 12 May 2012). 31 The United Nations Committee for Development Policy considers three criteria in deciding whether a country is a least developed country: ‘a “low-income” criterion, based on a three-year average estimate of the gross national income (GNI) per capita…; a “human assets weakness” criterion, involving a composite index (the Human Assets Index) based on indicators of (i) nutrition (percentage of the population that is undernourished); (ii) health (child mortality rate); (iii) school enrolment (gross secondary school enrolment rate); and (iv) literacy (adult literacy rate); and [a]n “economic vulnerability” criterion, involving a composite index (the Economic Vulnerability Index) based on indicators of (i) natural shocks…; (ii) trade shocks…; (iii) exposure to shocks…; (iv) economic smallness… and (v) economic remoteness.’ (United Nations Conference on Trade and Development, The Least Developed Countries Report 2011 (2011) iii.) Vanuatu ranks highly in respect of the low- income and human assets weakness criteria. Its low ranking on the economic vulnerability index accounts for its current position as a least developed country. 20

control that contribute to the vulnerability of the economy.32 Political instability has also, at times, resulted in mismanagement and hindered foreign investment, particularly in the 1990s.33

Economic growth is further hindered because the development of local business is limited by weak infrastructure, particularly outside of urban areas. Grid electricity supply is primarily limited to the urban areas.34 Inter island shipping is not always reliable, access to airstrips is limited and flights between islands are very costly. Road networks are poor.35 These factors limit access to the primary domestic markets for goods and services. Costs of production are also high. This is, in part, because many goods used in the process of production need to be imported36 and Vanuatu’s remoteness makes transportation costs associated with importation high.37 Similarly, the cost of exporting goods by ship or by plane is a hindrance to the development of export markets.38

In terms of human development in 2011 Vanuatu was in the bottom third of medium development countries on the United Nations human development index (HDI), with a rank of 125 out of 197 countries.39 The HDI ranks countries based upon life expectancy at birth, the average number of years of education people over the age of 25 have received and GDP per capita.40 Since 1985 life expectancy has increased 16.6%, to 71 years, average years of education has increased 13%, to 10.4 years and

32 TK Jayaraman, ‘Being least developed’ Fiji Times online 3 February 2009, http://www.fijitimes.com/story.aspx?id=113472 (Accessed 10 January 2011)). See Cynthia Ala and Philip Arubilake, ‘Chapter 1: Domestic Economy’ in Simeon Athy and Ferdinand van der Walle (eds), 20 Years of Central Banking in Vanuatu (2000) 12 for an overview of Vanuatu’s national economy. See also David Cowen, Alexander Wolfson and Jian Ming Ni, International Monetary Fund Vanuatu Country Report (2002) available online at http://www.imf.org/external/pubs/cat/longres.cfm?sk=16224 (Accessed 27 July 2006). 33 See Ala and Arubilake, above n 32 Cowen, Wolfson and Ni, above n 32. Conversely, relative political stability has been used to partially account for periods of growth in GDP (See Cox et al, above n 8, i). 34 Vanuatu National Statistics Office, above n 6,181. 35 Vanuatu National Statistics Office, above n 14, 77 – 83. 36 In February 2012 the balance of trade was -2051 million vatu. (Vanuatu National Statistics Office, ‘Statistics Update: Overseas Trade February 2012 Highlights’ http://www.vnso.gov.vu/images/stories/Releases/Highlights.pdf (Access 14 May 2012).) 37 Cox et al, above n 8, 4. 38 Ala and Arubilake, above n 32. 39 United Nations Development Programme, ‘Vanuatu HDI values and rank changes in the 2011 Human Development Report’ (2011) http://hdrstats.undp.org/images/explanations/VUT.pdf (Accessed 11 November 2012) 2. 40 Ibid, 1. 21

income per capita has increased 9.8%, to $3950 (2005, purchasing power parity US$).41

Whilst the number of people who have attended school, and the length of schooling, is increasing, levels of formal education are low. The 2009 census indicated that almost 70% of the population over the age of 15 had primary education or less as their highest educational qualification.42 Functional literacy, which requires that a person be able to read and write, was estimated in 1999 to be 30% for women and 37% for men.43 The 2009 census data stated that the percentage of the population who could read and write a simple sentence (so have basic literacy, which may not be the same as functional literacy) was 84.8%.44 Functional literacy is further complicated by the dual education system that Vanuatu maintains, which has arisen because Vanuatu was jointly colonised by both the British and the French. When considering literacy by language, 64% of the population can read and write a simple sentence in English, 37% can read and write a simple sentence in French and 74% can read and write a simple sentence in Bislama,45 a pidgin that is the national language of Vanuatu.46

THE LEGAL SYSTEM

The Constitution adopted British and French laws that were in force at the date of Independence, along with Joint Regulations and subsidiary legislation made by the colonial authorities that were in force at the date of Independence, as the laws of the country.47 Customary law is also part of the law of Vanuatu.48 However, as the concept of employment did not exist in indigenous customary practice or law indigenous customary law has no practical significance in the (non-customary) area of employment law, and is not discussed further.49 Locally made legislation has now

41 Ibid, 2. 42 Vanuatu National Statistics Office, above n 6, 23. 43 United Nations Development Program Pacific Human Development Report 1999 (1999) 105. 44 Vanuatu National Statistics Office, above n 6, v. 45 Ibid. 46 Article 3(1) Constitution of the Republic of Vanuatu . 47 Article 95 Constitution of the Republic of Vanuatu . 48 Ibid. 49 For further discussion of indigenous customary law see Forsyth, above n 4. It can be noted that as part of the of contract terms may be implied into a contract by custom (see, generally 22

largely superseded adopted legislation. English common law, as evolved by local courts for the Vanuatu context, is particularly important as a source of law, possibly because the form of the court system in Vanuatu is essentially English (common law, with adversarial courts) rather than French (civil law, with inquisitorial courts) in character. In practice, French law is used very rarely.50 All law must comply with the Constitution, and in particular with the fundamental rights provided in Chapter 2 Part 1. Constitutional rights that have particular significance for labour and employment include the right to freedom from forced labour51 and the right to freedom of assembly and association.52

The main courts are the Magistrates Court, Supreme Court and Court of Appeal. The Magistrates Court has jurisdiction in most civil matters where the amount claimed or the subject matter in dispute does not exceed 1,000,000 vatu (approximately US$11,000). This amount is increased to 2,000,000 (US$22,000) vatu in landlord and tenant cases. The Supreme Court has unlimited jurisdiction in all criminal and civil matters, except for disputes involving customary ownership of land and hears appeals from the Magistrates Court. The Court of Appeal has jurisdiction over appeals from the Supreme Court. A panel of 3 or 5 judges usually constitutes the Court of Appeal. Judges are a combination of those from the Supreme Court and judges from overseas, with judges from New Zealand, Fiji, Solomon Islands and Australia being used in recent years. There is no right of appeal to an “off-shore” court such as the United Kingdom Privy Council.53

There is one additional subsidiary court; the Island Court. Island Courts are warranted to have jurisdiction over a variety of minor criminal and civil matters.

Karen Wheelwright Labour Law (1999) 56). Such implied terms do not form part of the body of customary law, but are instead part of the body of common law. 50 The only published employment law case that applies French rather than is Mouton v Selb Pacific Ltd (Judgment #3) [1998] VUCA 8 http://www.paclii.org. 51 Article 5(1)(e) Constitution of the Republic of Vanuatu. 52 Article 5(1)(h) Constitution of the Republic of Vanuatu. 53 This section has been modified from Anita Jowitt, ‘Annexure 2: Vanuatu’ in Livingstone Armytage (ed) Searching for Success in Judicial Reform: Voices from the Asia Pacific Experience (2008) 317, 317 – 320. 23

Whilst each Island Court has its own warrant, all warrants are similar, and provide jurisdiction over claims in contract and tort up to a value of 50,000 vatu.54

Employment law

Whilst the common law “fills gaps” left by legislation and also helps in the interpretation of the various statutes in the event of disputes, the primary source of employment law is statute. None of Vanuatu’s employment legislation has been continued from colonial times. Parliament has passed a number of pieces of legislation which regulate aspects of employment and the rights and obligations of private sector employers and employees, including the Employment Act [Cap 160]55 (1983), the Health and Safety at Work Act [Cap 195] (1986), the Labour (Work Permits) Act [Cap 187] (1985), the Minimum Wage and Minimum Wages Board Act [Cap 182] (1984), the Trade Disputes Act [Cap 162] (1983), the Trade Unions Act [Cap 161] (1983), the Vanuatu National Provident Fund Act [Cap 189] (1986) and the Workmen’s Compensation Act [Cap 202] (1987, entered into force in 2004). The primary piece of legislation regulating the individual employment relationship is the Employment Act [Cap 160].

There is no separate employment court or tribunal. Labour officers are mandated to promote settlement through conciliation in disputes between individual employees and employers but have no coercive powers.56 This service is free, and is used. A survey of businesses in Port Vila conducted in late 2003 indicated that 34% of respondents had been contacted by the Department of Labour in respect of an individual employment dispute in the past three years.57 In the event that the dispute is not settled through conciliation then parties can proceed to the Magistrates Court or Supreme Court, depending upon the size of the claim. Trade disputes, which

54 See ibid, 143 – 145; Anita Jowitt, ‘Island Courts in Vanuatu’ (1999) 3 Journal of South Pacific Law http://www.vanuatu.usp.ac.fj/journal_splaw/Working_Papers/Jowitt1.html (Accessed 18 April 2013). 55 In Vanuatu when legislation is consolidated it is provided with a chapter number. Legislation is then referred to be this chapter number ([Cap #]), rather than by year. 56 Part 2 Trade Disputes Act [Cap 162]. 57 Anita Jowitt, ‘Do employers comply with and use employment contract law? A study from Port Vila, Vanuatu’ (Paper presented at Regional Conference on Institutions, Globalisation, and their Impacts on Labour Markets in Pacific Island Countries, Suva Fiji, 17 – 19 October 2006) 14. 24

involve collective actions, may be referred to a conciliator or a board of arbitration. Settlements arrived at by conciliation or awards made through arbitration are binding on parties for the period specified in the settlement or award.58 No permanent board of arbitration exists, with boards instead being appointed as required. In practice boards of arbitration are not commonly used.

Vanuatu has been a member of the International Labour Organisation (ILO) since 2003 and, as of October 2012, is a signatory to eight ILO Conventions.59 Vanuatu maintains a dualistic system which requires that ‘before a convention comes into effect as part of the domestic law the country must enact domestic legislation.’60 Domestic ratifying legislation has been passed for all eight Conventions.61 Vanuatu has not, however, made any other changes to its domestic laws and has not provided any reports to the ILO in respect of the ratified Conventions.62

The legislative process

Vanuatu’s Constitution establishes a representative democracy. Parliament is unicameral and is comprised of 52 members. Parliament is formed through national elections which occur at intervals of no more than four years.63 The country is divided into 17 constituencies, with the number of seats per constituency determined

58 Part 3, Trade Disputes Act [Cap 162]. 59 Forced Labour Convention 1930 (Convention 29); Freedom of Association and Protection of the Right to Organise Convention 1948 (Convention 87); Right to Organise and Collective Bargaining Convention 1949 (Convention 98); Equal Remuneration Convention 1951 (Convention 100); Abolition of Forced Labour Convention 1957 (Convention 105) Discrimination (Employment and Occupation) Convention 1958 (Convention. 111); Worst Forms of Child Labour Convention 1999 (Convention 182); Seafarers' Identity Documents Convention (Revised) 2003 (Convention 185). 60 Don Paterson, Anita Jowitt and Yoli Tom’tavala, ‘Legal Traditions and Systems in the Pacific: An overview of challenges and opportunities for legislative reform’ (Paper prepared for the Legislative Reform and the Convention on the Rights of the Child (CRC) in the Pacific: Sub-Regional Meeting, Port Vila Vanuatu, 25–28 August, 2008) 3. 61 Discrimination (Employment and Occupation) Convention (Ratification) Act 2005; Equal Remuneration Convention (Ratification) Act 2005; Seafarers' Identity Documents (Revised) Convention (Ratification) Act 2005; Abolition of Forced Labour Convention (Ratification) Act 2006; Forced Labour Convention (Ratification) Act 2006; Freedom of Association and Protection of the Right to Organise Convention (Ratification) Act 2006; Right to Organise and Collective Bargaining Convention (Ratification) Act 2006; Worst Forms of Child Labour Convention (Ratification) Act 2006. 62 International Labour Organisation, ‘Reports requested and replies to CEACR comments: Vanuatu’ (undated) http://www.ilo.org/dyn/normlex/en/f?p=1000:14000:0::NO::P14000_COUNTRY_ID:103350 (Accessed 8 December 2012). 63 Article 21(1) Constitution of the Republic of Vanuatu. 25

by the population in that constituency.64 Voting is done on the basis of a single non transferable vote.65 Once Parliament is elected the Members of Parliament collectively form the legislature. The Executive is drawn from Parliament, with members voting to elect the Prime Minister,66 who then appoints his (Vanuatu has only ever had male Prime Ministers) cabinet.67

The Constitution empowers Parliament to ‘make laws for the peace, order and good government of Vanuatu’.68 Further procedures are provided in Part V of the Standing Orders of Parliament 1982. Both private and government Bills that have been through executive processes are permitted, and both follow the same procedure. Bills must be submitted to the clerk at least 15 days in advance of their tabling in Parliament, and must be circulated to all Members of Parliament at least 10 days before this date. The Standing Orders provide a three stage process: first reading; committee stage and second stage.69 During the first reading debate ‘which is confined to the principles and merits of the Bill’70 may take place. The Bill is then ‘automatically referred to the Committee of the whole House’71 unless a motion is passed to refer the Bill to an ad hoc committee, comprised of no more than seven members of Parliament that proportionately represent the parties in Parliament.72 In practice ad hoc committees appear to be little used, but when they are they make reports back to the Committee of the whole House. Once the Bill comes before the Committee of the whole House, either directly after the first reading or from the ad hoc committee, each section of the Bill is read and voted on. Amendments can be introduced and voted on at this time. Following this process ‘Parliament shall read the Bill as amended a second time either forthwith or at some subsequent sitting.’73 After the second reading the Bill is voted on, and passes by simple majority. The Bill is then presented to the President, who must either assent to it within 2 weeks or, if he considers it to be inconsistent with the Constitution, refer it to the Supreme Court.

64 Representation of the People Parliamentary Constituencies and Seats Order 2002. 65 Section 33 Representation of the People Act [Cap 146]. 66 Article 41 Constitution of the Republic of Vanuatu. 67 Article 42 Constitution of the Republic of Vanuatu. 68 Article 16(1) Constitution of the Republic of Vanuatu. 69 Order 27 Standing Orders of Parliament 1982. 70 Order 28(1) Standing Orders of Parliament 1982. 71 Order 29(1) Standing Orders of Parliament 1982. 72 Order 48(2) Standing Orders of Parliament 1982. 73 Order 30(1) Standing Orders of Parliament 1982. 26

If there is an inconsistency between a Bill and the Constitution then it is not promulgated.

The process for the development of Bills is not legally defined. However, the role of the executive is legally defined to include ‘the strategic policy planning of significant matters affecting Vanuatu… [and] implementing Government policy beginning with the implementation of the CRP’.74 All Government Bills should complement this role. The usual practice is that ministries and line agencies develop drafting instructions, accompanied by draft Bills, often with the assistance of outside consultants. Once drafting instructions (and, maybe a draft Bill) are developed and approved by the Council of Ministers in conjunction with the Development Council of Officials75 the Attorney General’s Office legislative drafting section completes the draft of the Bill to be presented in Parliament as a government Bill. Whilst Vanuatu’s Constitution provides for a law reform commission, this institution has only recently been established, with the secretary being appointed in 2011.76

The socio-political context of the legislative process

Vanuatu’s model of legislative law making is not unusual. It maintains a system of checks and balances between the executive, and legislature. The legislature is subject to judicial oversight in respect of the constitutionality of Bills. Government Bills are subject to approval by the legislature. The individual members of the legislature act as a check on each other. Parliament derives its power from, and is ultimately accountable to, citizens through the electoral process. As the Supreme Court has observed, ‘if the representatives of the people of Vanuatu (Members of Parliament) in Parliament use their national powers to pass laws against the interests of the people of Vanuatu considered as such, it is within the power of the people

74 Section 6(2) Government Act [Cap 144]. 75 This is an advisory body established under the Government Act [Cap 144]. 76 ‘Secretary to Vanuatu Law Commission appointed’ Vanuatu Daily Post Online 5 August 2011 http://www.dailypost.vu/content/secretary-vanuatu-law-commission-appointed (Accessed 11 November 2012). 27

themselves to recent (sic) and reverse what may be done.’77 Citizens are therefore the ultimate check on legislative power.

The notion that Parliament derives its authority from citizens is a fundamental aspect of modern nation states, which are underpinned by ‘a complex network of social norms, economic models and political ideals.’78 Part of this complex network is a host of written and unwritten standards including an expectation that ‘the powers [parliamentarians] have must be exercised reasonably, proportionately and rationally’79 and that there is a ‘duty to account for their actions through explanation and justification.’80 Further, there is an expectation that officials will exercise self- restraint. Again, ‘[t]he basis for restraint is the social relationship between citizens and officials, according to which authority ascends from the citizens, is held on trust, and is to be used according to acceptable standards.’81 Another expectation, reflected in Vanuatu’s Constitution, is that although Members of Parliament are elected by particular constituencies, in exercising their powers they will act for the good of the country as a whole.82 The system of checks and balances is intended to uphold this network of written and unwritten standards.

In Vanuatu, however, the system of checks and balances surrounding the legislative process does not always operate effectively. One reason for this is that the complex network of written and unwritten standards that underlies the exercise of parliamentary power is undermined by the lack of connection between the system of governance established on Independence and traditional forms of authority. Miranda Forsyth observes:

Prior to Independence, authority was either exercised by force by the two colonial powers or else was traditional and achieved its legitimacy through belief in the sanctity of traditions, kastom and obedience to community

77 Virelala v Ombudsman [1997] VUSC 35 http://www.paclii.org affirmed in In re the President's Referral, President of the Republic of Vanuatu v Attorney-General[1998] VUSC 18 http://www.paclii.org. 78 Graham Hassall, ‘Governance, Legitimacy and the Rule of Law’ in Anita Jowitt and Tess Newton Cain (eds), Passage of Change: Law, Society and Governance in the Pacific (2003) 51, 53. 79 DJ Galligan, Law in Modern Society (2007) 131. 80 Ibid. 81 Ibid, 251. 82 Article 16(1) Constitution of the Republic of Vanuatu. 28

leaders… At Independence there was a sudden shift to a different type of authority and a different, legal-rational basis of legitimacy.83

This swift transition has led to a disjunction between the philosophies and values underpinning the Republic of Vanuatu as represented in the written Constitution and social and political practices, which continue to have strong roots in traditional authority.84 Amitai Etzioni’s classification of State types usefully illuminates fundamental differences in the philosophical foundations, values and virtues of societies based on these different forms of authority. Civil society, which aligns Vanuatu’s constitutional form, perceives tolerance, self control, critical thinking and participation in civil affairs to be virtues. Individualism (and human rights based upon individualism) is valued and beyond that values are largely left to the individual to decide. Membership is based upon voluntary citizenship. Good society, which aligns with traditional authority and customary Vanuatu society, has a quite different perception of values and virtues. Good society is characterised by having a communitarian philosophical foundation in which the State is based on shared values developed by public consensus. Membership is ascribed and relational and social virtues such as being a good parent, neighbor and loyal community member are more important than being an independent critical thinker.85

These fundamental differences in philosophies, values and virtues, coupled with limited education for the majority of the population, hinder the effective operation of both Parliament and the accountability mechanism of elections.86 One set of issues arises from the relationship between Members of Parliament and the public. The “big man” model of authority is based on personal power. Power may be obtained through

83 Forsyth, above n 4, 10. 84 See MD Olson, ‘The Politics and poetics of social transformation in Samoa’ (2000) 45 Journal of Legal Pluralism and Unofficial Law 19. 85 Amitai Etzioni, ‘Law in Civil Society, Good Society and the Prescriptive State’ (2000) 75(2) Chicago Kent Law Review 355, particularly 358 – 375. In the Vanuatu context William FS Miles, Bridging Mental Boundaries in a Postcolonial Microcosm (1998) is devoted to the boundaries between custom, colonialism, and the nation of Vanuatu. See, in particular chapter 2 for boundaries between custom and the nation of Vanuatu. 86 On the operation of elections generally see Anita Jowitt, ‘Free and Fair Elections: Societal Challenges to Vanuatu’s Electoral System’ (1997) 13(2) Kasarinlan 79; Shirley Randall (ed), Republic of Vanuatu National Elections 2 May 2002: Report of the Elections Observer Group (2002); Howard Van Trease, ‘The Single Non-Transferable Vote System in Vanuatu’ (2005) 43(3) Commonwealth and Comparative Politics 296. 29

displaying particular personal characteristics,87 participating in custom grade taking ceremonies,88 and developing influence through exchange.89 The development of influence through exchange affects the perception of the role of Members of Parliament and the operation of the democratic process. At election time, candidates tend not to attract support on the basis of clearly articulated policy positions and are not expected to act as a voice for those policy positions within Parliament. The lack of emphasis on policy is also reflected within political parties.90 Nor do voters critically assess various policy positions. Instead, Members of Parliament are ‘expected to provide access to resources and “development” funds. Indeed, all members of parliament act as central nodes in networks of distribution and exchange focused on access to state resources.’91 This dynamic personalises the perceived functions of Members of Parliament and undermines any political incentive for them to act in pursuit of national interests. It also undermines the ability of the electoral process to act as a check on Parliament.92

87 Chief Philip Tepahae, ‘Chiefly power in southern Vanuatu’ (Discussion Paper 9, State, Society and Governance in Melanesia Project, 1997). 88 Lindstrom, above n 4. 89 Marshall Sahlins, ‘Poor Man, Rich Man, Big Man, Chief: Political types in Polynesia and Melanesia’ (1963) 5(3) Comparative Studies in Society and History 285. 90 ‘[T]he principles on which they exist and mobilize support and membership are still strongly linked to kinship and local loyalty. Some do not even articulate national issues… There is a complex interaction between issues of personality, kinship, tribal-regional loyalty and ethnicity. Ideological differences in terms of adherence to standard political principles… rarely exist.’ (Steven Ratuva, ‘Primordial Politics? Political Parties and Tradition in Melanesia’ in Roland Rich, Luke Hambly and Michael Morgan (eds) Political Parties in the Pacific Islands (2006) 27, 29.) 91 Michael G Morgan, ‘Political fragmentation and the policy environment in Vanuatu, 1980–2004’ (2004) 19(3) Pacific Economic Bulletin 40, 45. 92 Whilst bribery and treating are electoral offences (Representation of the People Act [Cap 146] sections 45 and 46) it has been observed that ‘some voters see the receipt of gifts in return for voting a particular way to be a legitimate part of the electoral process. Such gifts may be the only actual return that some voters expect to ever see out of the State political system… Although the acceptance of gifts may seem to subvert the political system, given that the political system remains largely meaningless for a lot of people, the acceptance of gifts in return for voting appears to be a legitimate blending of custom and introduced systems in the eyes of some people.’ (Newton Cain and Jowitt, above n 4, 15.) There are also other factors that undermine the integrity of the electoral process. In the 2012 national election irregularities in the electoral roll, irregularities with proxy voting, failure to provide voters with electoral cards, which must be shown in order to be permitted to vote and improper screening of candidates to ensure that meet the candidacy of criteria are some of the problems that occurred. (Len Garae, ‘40 Politicians Petition Government, Electoral Commission’ Vanuatu Daily Post Online 7 November 2012 http://www.dailypost.vu/content/40-candidates-petition-government-electoral-office (Accessed 1 December 2012); ‘2012 Election Worst in History: Politicians’ Vanuatu Daily Post Online 12 November 2012 http://www.dailypost.vu/content/2012-election-worst-historypoliticians (Accessed 1 December 2012); Jane Joshua, ‘2012 General Elections Worst Ever: Natapei’ Vanuatu Daily Post Online 26 November 2012 http://www.dailypost.vu/content/2012-general-elections-worst- ever-natapei (Accessed 1 December 2012). As of December 2012, following the national elections, 24 election petitions had been filed. (‘Vanuatu’s Supreme Court begins hearing election petitions’ Radio New Zealand International http://www.rnzi.com/pages/news.php?op=read&id=72669 4 30

A further challenge, which stems, in part, from the lack of grounding of political parties in policy platforms, and, in part, from the personalised nature of Vanuatu politics, is that in the past 20 years political parties have become increasingly fragmented. This in turn has led to instability within government.93 Since the election in 1991 no one party has garnered enough seats to be able to govern on its own, resulting in the necessity of government by coalition.94 There are currently 16 parties and 4 independents in Parliament,95 with 12 parties and one independent in government.96 Large coalitions are inherently unstable and there are frequent changes in cabinet, coalition and government.97 Because government, and particularly cabinet, positions allow Members of Parliament greater access to resources with which to provide resources to their constituencies, a situation occurs in which ‘members of parliament are forced into frantic efforts to join government and gain access to the state’s funds. This… [diverts] the attention of members of parliament from their institutional roles as law makers, overseers of government, and representatives.’98

This political environment affects the law making role of Parliament.99 There is no expectation that there will be public consultation on proposed Bills before they enter

December 2012 (Accessed 5 December 2012). None of these issues is new (see, for example, Randall, above n 86.) 93 Detail of the causes of fragmentation are beyond the scope of this chapter. For further see Michael G Morgan, ‘The Origins and Effects of Party Fragmentation in Vanuatu’ in Roland Rich, Luke Hambly and Michael Morgan (eds) Political Parties in the Pacific (2006) 117; Morgan, above n 91. 94 Michael G Morgan, ‘The Origins and Effects of Party Fragmentation in Vanuatu’ in Roland Rich, Luke Hambly and Michael Morgan (eds) Political Parties in the Pacific (2006) 117, 127 – 130. 95 Pacific Institute of Public Policy, ‘The Waiting game’ (15 November 2012) http://www.pacificpolicy.org/blog/category/vanuatu-election-2012/ (Accessed 25 November 2012). 96 Pacific Institute of Public Policy, ‘Coalition government formed’ (21 November 2012) http://www.pacificpolicy.org/blog/category/vanuatu-election-2012/ (Accessed 25 November 2012). By the first week of December the first motion of no confidence was filed with the Speaker. It should have been tabled in Parliament on 7 December but the opposition boycotted the Parliament session after former opposition member Kalvau Moli was offered a cabinet position. (Campbell Cooney, ‘Vanuatu opposition boycotts own no-confidence vote’ Radio Australia 7 December 2012 http://www.radioaustralia.net.au/international/2012-12-07/vanuatu-opposition-boycotts-own- noconfidence-vote/1057638 (Accessed 8 December 2012)). It is not clear exactly how many parties are in the government at the moment. 97 For details of changes see the Vanuatu political reviews published annually in the Fall edition of The Contemporary Pacific. Between the 2008 and 2012 elections the prime ministership changed seven times, with four of these changes subsequently being voided by court action. 98 Morgan, above n 91, 45. 99This section is based upon the most recent available assessment of Vanuatu’s Parliament. Whilst Hassall refers to a more recent legislative needs assessment project undertaken by the United Nations Development Programme (UNDP) in Vanuatu in 2008 (Graham Hassall, ‘Pacific Island parliaments: 31

the parliamentary process. Many ‘Bills are prepared in conditions that do not allow for public debate. Some Bills are prepared in secrecy, with interested members of the public being unable to obtain copies. Even when Bills are not prepared secretly there is currently no institutionalised system of calling for public submissions or comments on Bills before they get tabled in Parliament.’100 Once Bills enter the parliamentary process a combination of limited timeframes between when Members of Parliament receive Bills and when they are read in Parliament, lack of technical capacity, geographical difficulties and lack of expectation that Members of Parliament will consult with their constituents mean that consultation with the public on Bills after they enter the parliamentary process is also limited, or non-existent.101

In addition to the failure of Members of Parliament to discuss proposed legislation with their constituencies, discussion within Parliament is limited. The ‘effectiveness of the Committee of the Whole House is limited by the reluctance of political parties to debate contentious legislation in the parliament’,102 in part because confrontation will weaken already fragile coalitions.103 ‘The general level of debate has been limited by the inexperience of members, their incomprehension of technical issues

developmental aspirations and political realities’ (2012) 27(1) Australasian Parliamentary Review 213, 231) there is no record of this project on the UNDP website (United Nations Development Programme Fiji Multi-Country Office, ‘Democratic Governance Projects’ (Last updated 6 December 2012) http://www.undp.org.fj/index.php?option=com_content&task=view&id=124&Itemid=180 (Accessed 8 December 2012)). Since the 2001 legislative needs assessment Members of Parliament have had some training. Following the 2008 and 2012 elections three day induction programmes for Members of Parliament were held (Hassall, 232;‘Induction Program Increases Knowledge of Vanuatu Parliamentarians’ Islands Business 26 November 2012 http://www.islandsbusiness.com/news/index_dynamic/containerNameToReplace=MiddleMiddle/focu sModuleID=130/focusContentID=30553/tableName=mediaRelease/overideSkinName=newsArticle- full.tpl (Accessed 8 December 2012)). The Centre for Democratic Institutions has also held a number of workshops for Vanuatu parliamentarians (Centre for Democratic Institutions, ‘Vanuatu’ (last updated 23 October 2012) http://www.cdi.anu.edu.au/.VAN_.htm (Accessed 8 December 2012) and Hassall details a number of regional meetings. Despite these capacity building activities Hassall concludes that ‘[i]n reality, the functioning of both legislative and executive branches of government in Pacific Island countries still require a strong development focus, in which not only MPs and administrators but also constituents and civil society also (sic) have an important developmental role to play.’ (at 235.) The issues that Hassall finds currently exist across the region are the same as those found in the 2001 Vanuatu legislative needs assessment, which indicates its currency. 100 Newton Cain and Jowitt, above n 4, 24. 101 Michael G Morgan, ‘Integrating Reform: Legislative Needs Assessment, Republic of Vanuatu’ (Technical Report for UNDP, March – April 2001) [2.2]. 102 Ibid, [2.3]. 103 Van Trease observes that that last Prime Minister to survive a full four year term, Ham Lini, ‘managed to do so because Lini was able to stay in power mainly because he refused to take action… or make decisions that could jeopardize the coalition. Maintaining political stability was his prime objective.’ (Howard Van Trease, ‘Vanuatu Political Review 2009’ (2010) 22(2) The Contemporary Pacific 467, 467.) This dynamic also limits confrontation in parliamentary debate. 32

and their lack of legal and technical secretariat support.’104 Capacity issues are exacerbated by the diversion of parliamentarians’ attention to internal political manoeuvring. Bills can, and do, pass from first reading to final vote in the course of one day, with minimal debate.105 There is a perception ‘that Parliament rubber stamps presented legislation, rather than putting it through a rigorous select committee process, or any other kind of scrutiny.’106 These factors give rise to considerable disillusionment with Parliament, and government more generally.

THE LABOUR MARKET ENVIRONMENT

The labour force

The 2009 census data tables indicate that the labour force (defined as people over the age of 15 who are engaged in economic activity or are actively seeking work) contained about 100,000 people.107 Subsistence agriculture engages about 42% of the labour force. A further 8.5% engage in unpaid family work and 10% produce goods for sale. The category of producing goods for sale is distinct from being self employed and captures people who produce surplus goods for sale at markets as part of subsistence agriculture activities. About 25% engage in the labour market as employees, with a further 1% being employers and 6% being self employed workers. Only 5.5% were recorded as not working and actively looking for work. The remaining 2% engage in voluntary work.

104 Morgan, above n 101, [2.3]. 105 Ibid, [2.3.2]. 106 Newton Cain and Jowitt, above n 4, 24. 107 Vanuatu National Statistics Office, above n 6, 129, 135. This figure differs from the summary statistics on page iv of the same report. It is not clear what accounts for this difference. All employment data in this section is taken from the data tables. The data tables have been preferred because the summary statistics are not internally consistent. For example, the unemployment rate in the summary tables is recorded as 4.6%. However, when the unemployment rate is calculated from the figures on the summary (with the labour force derived from the employed population + subsistence workers + unemployed) then the unemployment rate is 5.1%. 33

2% 6% Subsistence agriculture & 7% unpaid family work Produce goods for sale

Employee 25% 50% Employer & Self employed

Voluntary work 10% Unemployed

Figure 1.1: Labour force by occupation, 2009

The low official unemployment rate relates to how unemployment is officially measured, rather than being an indicator of fairly well matched supply of and demand for labour. One reason for this is that ‘[i]t is difficult to measure true unemployment in Vanuatu as many people who might be unemployed do not look for work because there are no jobs available and they do other activities such as subsistence gardening.’108 In the 1999 census only people over the age of 15 who did no economic activity at all (including work for pay or profit, helping for free in a family business, working as a subsistence farmer, or other unpaid work) in the 7 days prior to completing the census questionnaire were asked whether they were unemployed.109 Whilst the 2009 census does not discuss the methodology used to measure unemployment it is assumed the same methodology as was used in 1999 was used in 2009.110 This means that the pool of unemployed excluded people who would like paid work in addition to or instead of their current, unpaid, economic activity. Such people may be referred to as underemployed. Literature indicates that there is a large pool of people in Vanuatu who are underemployed.111

108 Vanuatu National Statistics Office, above n 6, 108. 109 Vanuatu National Statistics Office, above n 14, 213. 110 This assumption is supported by the title of data table 7.12: ‘Population 15 years and older in private households by sex who did not work in the week before the census and did not have a job, and whether actively looking for work…’ (Vanuatu National Statistics Office, above n 6, 135). 111 For example see John Connell and John Lea Urbanisation in the Island Pacific (2002) 85 – 100; Asian Development Bank, ‘Priorities of the People: Hardship in Vanuatu’ (2003) http://www.adb.org/Documents/Reports/Priorities_Poor/VAN/van0100.asp (Accessed 25 September 2003); Te’o I J Fairbairn, Island Economies (1985) 199 – 231; Anita Jowitt, ‘Unemployment in Vanuatu’ (2001) 26 Development Bulletin 55; Anita Jowitt, ‘Economic growth, urban crime and 34

Of the 25,006 people who were recorded as employees in the 2009 census, 6,489 (26%) were government employees. The other 18,517 were private sector employees.112 The census data does not report in more detail on the activities of employees. This detail is provided in specific labour market surveys, with the most recent published data being the Vanuatu 2000 Labour Market Survey Report and the Informal Sector Survey 2000. In these surveys the formal sector is defined as being the government and those private sector businesses that have a turnover of 4 million vatu or more (approx US$44,000 in October 2012) and are registered for value added tax (VAT), or are VAT exempt.113 The formal sector can be contrasted with informal sector businesses, which are defined to have a turnover of less than 4 million vatu. Whilst informal sector businesses are also meant to be registered and to adhere to other laws, including employment laws ‘typically employee numbers are low and labour is often provided by (sometimes unpaid) family members.’114

In 2000 14,272 people were employed in the formal sector, with 4,475 being employed by government and the remainder being private sector employees.115 As the figure below indicates, about half of the formal sector workforce is engaged in various types of office work.

unemployment in developing economies: a case study from Vanuatu’ in M H Sierle and T Birirnger, Economics of Transition: Theory, Experiences and EU Enlargement (2001) 157. 112 Vanuatu National Statistics Office, above n 6, 127. 113 Vanuatu National Statistics Office, Vanuatu 2000 Labour Market Survey Report (2000), 8. 114 Ibid. 115 Ibid, 20. 35

Office w orkers: Legislators, senior officials and managers, professionals, technicians, associate professionals, clerks

16% Service and Sales Workers

6% Skilled agriculture and fishery workers 46%

11%

Crafts and related trades

3%

Plant and machine operators and assemblers 18%

Elementary occupations

Figure 1.2: Formal sector employment by type of employment 2000116

The majority of formal sector employees within the private sector are located in urban areas, with 75.5% working in Port Vila, 16.4% working in the second urban centre of Luganville, and 8.2% working in rural areas.117

Data on employment within the informal sector is harder to interpret. The Informal Sector Survey 2000 (ISS) provides data on informal sector businesses that hold business licenses, including data on paid employment in the informal sector. The 2000 ISS estimated that about 6000 people are employed in informal sector businesses that hold business licenses.118 It is not clear whether this figure includes only wage employees or also self employed and unpaid workers. In terms of sectoral paid employment, 61% of all informal sector employees recorded in the 2000 ISS were employed in retail stores. Transport operations (which account for 13% of informal sector employees) and kava bars (which account for 12% of informal sector

116 Ibid, 17. 117 Ibid, 16. 118 Vanuatu National Statistics Office, Informal Sector Survey 2000 (2000) 11. 36

employees)119 are two other major sources of paid work for informal sector employees.

In addition to the formal and informal sectors there is a “sub-informal sector”. As the 2006 HIES observes, ‘many households in essence operate small businesses selling agricultural and other commodities produced in the home as the good are marketed and sold on a regular basis. But most of these households would not consider themselves to be operating a business, mostly because they do not have a business license.’120 No data on paid employment in this sub-informal sector is available. The sub-informal sector also includes those who are employed as domestic workers in households, as households are not businesses.

Unlike some Pacific Island countries, Vanuatu does not have an established post- Independence history of people going overseas to find work and to send remittances home. However, in 2007 New Zealand instituted a Regional Seasonal Worker scheme. In its first year 1,698 workers travelled to New Zealand, and it is intended to increase the number of work visa for ni-Vanuatu to go to New Zealand under this scheme to 8,000 per year.121 Australia is piloting a similar scheme, which was launched in 2008. It is not yet operating fully, with only 60 of 2500 visas having been taken up by mid-2010.122 By September 2011 the first 57 workers under the scheme had travelled to Australia.123

119 Ibid. 120 Vanuatu National Statistics Office, above n 3, 17. 121 International Labour Organisation, ‘Decent Work Country Programme Vanuatu’ (2009) 6. 122 ‘Australia defends its seasonal worker scheme’ Radio Australia 14 July 2010 http://www.radioaustralia.net.au/pacbeat/stories/201007/s2953691.htm (Accessed 20 January 2011). 123 Godwin Ligo, ‘Australia increases Vanuatu seasonal workers’ Vanuatu Daily Post Online 30 September 2011 http://www.dailypost.vu/content/australia-increases-vanuatu-seasonal-workers (Accessed 10 May 2012). 37

Employers

The government is the biggest single employer in Vanuatu, engaging 26% of paid employees in 2009.124 The 2000 Labour Market Survey recorded 939 formal private sector businesses.125 The majority of these (78.2%) were located in Port Vila, with a further 14.2% being located in the second urban centre of Luganville.126 Only 7.6% were located in rural areas. Many formal private sector businesses are small. Just over 10% of formal private sector businesses in 2000 had no employees and a further 64% had 1 – 9 employees.127

As the table below indicates, the majority of formal private sector businesses are in retail and wholesale trade or service industries.

Percentage of businesses per industry category Retail and wholesale trade 35.3 Other business services 13.7 Hotels and restaurants 10 Other services 9.5 Manufacturing 7.9 Construction 7.2 Transport and Communication 6.7 Agriculture, forestry, fishing, mining 5.6 Finance and insurance 3.9 Electricity and water 0.2 Total 100

Table 1.1: Private formal sector businesses by industry 2000 (% of business licenses issued per industry category) 128

124 Vanuatu National Statistics Office, above n 6, 127. 125 Vanuatu National Statistics Office, above n 113, 13. 126 Ibid, 16. 127 Ibid, 14. 128 Ibid. The table within the Labour Market Survey as published also includes the government. As this table is only looking at private sector businesses the government was excluded from the calculations for this table. 38

As stated above, it is harder to interpret informal sector data, but the three major sectors of informal sector employment were in retail, transport and nakamals, or kava bars. These three sectors also account for the majority of business licenses issued. In 2000 of the 4604 informal sector business licenses issued 2,266 (49%) were for retail, 759 (16.5%) were for transport and 460 (10%) were for nakamals.129 As the table below indicates whilst more informal sector transport operator business licenses were issued in urban areas than in rural areas, the majority of informal sector nakamal and retail store business licenses were issued in rural areas.

Transport Nakamals Retail Rural 45% 69% 80% Urban 55% 31% 20%

Table 1.2: Informal sector business licenses by location and sector 2000130

The number of paid employees per business license issued is small, with surveyed transport operators having an average of 4 paid employees per business, surveyed nakamals having an average of 1.5 paid employees per business and surveyed retail stores having an average of 1.6 paid employees per business.131 The majority of labour engaged within retail and nakamals are owners or unpaid family members, with 74.4% of people working in retail132 and 65.2% of people working in nakamals.133 In transport about 49% of workers were owners or unpaid family members.134

129 Vanuatu National Statistics Office, above n 118, 10. 130 Ibid 12, 22, 28. 131 Ibid. 132 Ibid, 29. 133 Ibid, 22. 134 Ibid, 13. 39

KEY FORMAL SECTOR EMPLOYMENT ISSUES

Unemployment and underemployment

The major issue in respect of employment in Vanuatu is that population growth is considerably more rapid than employment growth, and this leads to unemployment or underemployment. Nationally it is estimated that the formal sector is currently producing fewer than 700 new jobs per year, whilst there are 3,500 new entrants to the labour force annually.135

Youth unemployment or underemployment is a particular issue. The youthful structure of Vanuatu’s population also means that there is no balance between the number of people retiring from formal sector employment and the number of new entrants to the labour force. In a survey carried out by the Vanuatu young people’s project in 1997- 1998 64% of respondents did not have paid employment.136 Of those that had work, 75% were earning less than 5000 vatu per fortnight. Based on the assumption that they were being paid at or above the legally required minimum wage these employees were working less than full time.137

Urban unemployment is another particular issue. As the chart below indicates, the gap between the urban population and urban employed is growing.

135 International Labour Organisation, ‘Decent Work Country Programme Vanuatu’ (2009) 5. 136 Mitchell, above n 13, 29. 137 Ibid, 31. 40

Figure 1.3: Urban population and formal sector employment 1989 – 2009138

This is a particular problem because the urban lifestyle increases dependence on the cash economy. In rural areas, where people primarily reside on their customary land, ‘ni-Vanuatu still live in “subsistence affluence”, enjoying plentiful natural resources in an unspoilt environment.’139 Whilst ‘lack of economic opportunity and growing demand for the trappings of modern life are placing stresses on rural communities’140 these stresses are different from those experienced in urban areas, where many people are immigrants from other islands, so do not have “free” customary land to on which to dwell. Further, urban dwellers often live in densely populated settlements that restrict opportunities to engage in subsistence activities and require more cash for food and other basic needs such as housing, water and cooking fuel.141 The basic needs poverty line reflects this. The adult per capita basic needs poverty line in 2006 was estimated to be 11,075 vatu per month in Port Vila, 6,110 vatu per month in Luganville and 3,366 vatu per month in rural Vanuatu.142 The number of households in 2006 whose income fell below the basic needs poverty line was 27.2% in Port Vila, 9.2% in Luganville and 8.5% in rural Vanuatu.143

Recognition of the issue of unemployment and underemployment is not new. Indeed, the mid-term review of the first national development plan, which occurred in 1984,

138 Source: Anita Jowitt, ‘Unemployment in Vanuatu (2001) 26 Development Bulletin 55, updated using 2009 census data, iv. 139 Cox et al, above n 8, 4. 140 Ibid. 141 Ibid 16 – 17. 142 Vanuatu National Statistics Office, Vanuatu Analysis of the 2006 Household Income and Expenditure Survey Report on the Estimation of Basic Needs Poverty Lines, and the Incidence and Characteristics of Poverty in Vanuatu (undated) v. 143 Ibid. 41

discussed population as one of three selected development issues. This review pointed out that if current population growth continued at the rates experienced in the late 1970s, then Vanuatu’s population would reach 1,000,000 by 2050.144 In terms of the labour market, the policy implication was that ‘the great majority of the new entrants to the labour force from 1984 are going to have to find work on the land… The question as to whether the youth of the 1980s and 1990s will be prepared to take up jobs in agriculture, forestry and fishing rather than seeking employment in town is one of the most problematic for development planners.’145 Subsequent development plans also recognised the same issue.146

Unemployment and crime

A related issue to unemployment is the public perception that increasing unemployment, particularly in urban areas, is leading to an increase in crime. The potential issue was first raised at a national policy level in 1987 in the second national development plan, although it was mentioned as a possible future problem rather than an immediate problem.147 This view began to be articulated more frequently in 2000 following coups in Fiji and Solomon Islands, considerable unrest in the northern town of Luganville, and a high profile murder in Port Vila of a long term expatriate businessman. The apparent spread of unrest throughout Melanesia increased fears that Vanuatu might experience similar problems.148 Whilst statistics

144 Vanuatu National Planning and Statistics Office, Mid-term review of first national development plan (1984) [ 27.2]. 145 Ibid, [27.34]. 146 In the 1985 urban census 71% of the population that identified as unemployed was under the age of 25. (As reported in Mitchell, above n 13, 30.)The second national development plan, for 1987 – 1991, recognised that ‘major problems now facing the country include: the potential for a significant increase in youth unemployment or underemployment… Prospects for employment creation in the wage paying sector of the economy are limited. Many school leavers will therefore have no alternative but to find jobs in the more traditional activities or become self-employed… this is unlikely to be attractive to many young people who have benefited from education and exposure to alternative lifestyles.’ (Vanuatu National Planning and Statistics Office, Second National Development Plan 1987 – 1991 (1987) [1.12], [1.14].) By the third national development plan from 1991 – 1996, there was ‘anecdotal evidence of the growing emergence of underemployment, due to a growing number of young and educated ni-Vanuatu entering the labour market each year without hope of finding paid employment that is commensurate with their education.’ (Vanuatu National Planning and Statistics Office, Third National Development Plan 1992 – 1996 (1992).) 147 Vanuatu National Planning and Statistics Office, Second National Development Plan 1987 – 1991 (1987) [8.17] and [8.18]. 148 This emerging discouse is detailed in Anita Jowitt, ‘Vanuatu Political Review 2000’ (2001) 14(2) The Contemporary Pacific A Journal of Island Affairs 461; Anita Jowitt, ‘Economic growth, urban 42

on criminal offenders are not particularly comprehensive, statistics from 1997 – 2000 do support the public perception that, around this time, urban crime was linked to unemployment.149 Since 2000 the link between unemployment and crime has recurred in public discussion of the urban crime problem.150

Oversupply of unskilled labour, undersupply of skilled labour

Despite issues with unemployment, formal sector employers note that there is insufficient skilled labour, with about 59% of respondents in the 2000 Labour Market Survey noting difficulties in recruiting skilled staff.151 A 2009 survey of businesses on Efate recorded that an inadequately educated workforce was the fourth most commonly identified biggest obstacle to doing business for 13.9% of respondents (after electricity, access to finance and crime, theft and disorder).152 The ILO observes that ‘this situation is caused by a complex mix of reasons including the nature of the school system which prepares school leavers for urban white-collar work while failing to teach adequate technical and vocational skills.’153 The ISS similarly noted a shortage of skills in the informal sector. About 60% of both the retail sector and nakamal sector respondents said that they and all their staff would benefit from training in preparing a business plan, managing a business, basic maintenance, simple book keeping and handling cash, with an additional 16% saying that some of their staff would benefit from this training.154 Transport sector training needs were similar in all areas except for handling cash, where only 24% of

crime and unemployment in developing economies: A case study from Vanuatu’ in MH Stierle and T Birringer (eds), Economics of Transition: Theory, Experiences and EU Enlargement (2001) 157. 149 Anita Jowitt, ‘Economic growth, urban crime and unemployment in developing economies: A case study from Vanuatu’ in MH Stierle and T Birringer (eds), Economics of Transition: Theory, Experiences and EU Enlargement (2001) 157, 170 – 172. 150 See, for example, Parkinson Wirrick, ‘Restricting the Freedom of Movement in Vanuatu: Custom in conflict with human rights’ (2008) 12(1) Journal of South Pacific Law 76; Godwin Ligo, ‘Crime Rate in Port Vila Triples’ Vanuatu Daily Post Online 24 December 2010 http://www.dailypost.vu/content/crime-rate-port-vila-triples (Accessed 8 December 2012); Glenda Shing, ‘Freshwota Independence celebration focuses on combating crime and violence’ Vanuatu Daily Post Online 27 July 2012 http://www.dailypost.vu/content/freshwota-independence-celebration- focuses-combating-crime-and-violence (Accessed 8 December 2012). 151 Vanuatu National Statistics Office, above n 113, 43. 152 World Bank, ‘Enterprise Surveys, Vanuatu’ (2009) http://enterprisesurveys.org/Data/ExploreEconomies/2009/vanuatu (Accessed 10 May 2012). 153 International Labour Organisation, above n 135, 5. 154 Vanuatu National Statistics Office, above n 118, 26, 33. 43

respondents said all staff needed training in this area and a further 6% saying some staff needed training in this area.155

Low wages for low-skilled workers?

No data on current average wages is available. Older data on wages and on household incomes does, however, allow some comment.

In 2000 the lowest earning occupations in the formal sector labour force were skilled agriculture and forestry workers, elementary occupations, plant and machine operators and sales and service workers. In total 44% of the formal sector labour force was engaged in these sectors. The average wage across these sectors was 23,720 vatu per month.156 At the time minimum wage was 16,000 vatu per month, or 91 vatu per hour, a rate that had been set in 1995.157

In 2005 the minimum wage was increased to 22,000 vatu per month,158 which was below the average wage paid in low-paid occupations, so may not have affected it greatly. The average wage in low-paid occupations should have increased following minimum wage increases in 2008, when the wage was increased to 26,000 vatu per month,159 and 2012, when the minimum wage was increased to 170 vatu per hour.160 Anecdotal evidence suggests that now the minimum wage is being increased more frequently, the minimum wage now provides the benchmark for the amount of payment for low-skilled employees.161 There is no current data on wages of paid employees, but in 2009 48% of the total urban labour force (which includes paid employees, but also other categories such as self employed and unpaid family work)

155 Ibid, 19. 156 Vanuatu National Statistics Office, above n 113, 33. 157 Minimum Wages Order 1995. 158 Minimum Wages Order 2005. 159 Minimum Wages Order 2008. 160 Minimum Wages Order 2012. No monthly minimum wage was stated. 161 In 2012 I was on the Tripartite Labour Advisory Council that proposed the minimum wage increase so heard anecdotal information from both employers and employees in this role. The catalyst for the increase was a demand from 3,000 employees that the minimum wage was too low to live on, which further suggests that there is a considerable pool of employees earning the minimum wage (Godwin Ligo, ‘3,000 employees call for wage increase’ Vanuatu Daily Post Online 9 July 2012 http://www.dailypost.vu/content/3000-employees-call-wage-increase (Accessed 10 September 2012)). 44

were engaged in the four lowest-paid occupations.162 Earlier data suggests that this group of paid employees is likely to be receiving close to the minimum wage. This is of particular concern in urban areas where the monthly urban basic needs poverty line per household was estimated, in 2012, to be 63,528 vatu.163 Urban households with two minimum wage earners will still fall below the basic needs poverty line.

CURRENT POLICY RESPONSES TO EMPLOYMENT ISSUES

The PAA: Private sector led development

The Priorities and Action Agenda (PAA), is the current national development plan. The first sentence of the national vision contained in the PAA is that ‘[b]y 2015 Vanuatu will have achieved a significant increase in real per capita incomes, along with steady growth in levels of employment.’164 This plan is a continuation of the policy direction implemented under the 1997 Comprehensive Reform Programme (CRP),165 which was developed with the assistance of the Asian Development Bank (ADB) after mismanagement and corruption had driven Vanuatu to ‘the verge of bankruptcy’.166 ‘Private Sector Development and Employment Creation’167 is listed as the first of its key priorities. The first strategy to achieve this priority is to ‘lower costs of doing business’.168 Other strategies relate to developing various sectors of the economy in order to create more private sector activity, and therefore more demand for employees.

Lowering the costs of employment is not specifically mentioned in the PAA. However, the PAA can be situated within broader statements by the ADB, which

162 Vanuatu National Statistics Office, above n 6, 132. 163 Vanuatu Tripartite Labour Advisory Council, ‘Report: Minimum Wage Proposal August 2012’ (Unpublished, 2012) 5. 164 Government of Vanuatu, ‘Priorities and Action Agenda 2006 – 2015’ (2006) 1. 165 Ibid, 3. 166 Russell Nari, Comprehensive Reform Programme in the Republic of Vanuatu: A major challenge, through the eyes of a ni-Vanuatu’ (ANU Asia Pacific School of Economics and Government, Update Papers, June 2000) 3. Whilst Nari reflects the popular perception, the CRP documentation suggests instead that Vanuatu was not bankrupt but instead the catalysing issue was a ‘crisis in confidence in [the] government.’ (Vanuatu Office of the Prime Minister, Comprehensive Reform Programme (1997)). 167 Government of Vanuatu, above n 164, 1. 168 Ibid, 17. 45

sees that ‘an active private sector operates in a supportive institutional environment with, among other things few restrictions on wage levels and other conditions of employment’.169 This is because:

Minimum wages, particularly for youth labor, may prevent labor whose marginal productivity is lower than the set wage from being hired. Implicit on-costs for hired labor such as workplace standards, leave entitlements and loadings, and unfair dismissal laws and redundancy entitlements can increase the true opportunity cost of labor significantly above the actual wage level. The exercise of union power through strikes or the threat of strikes may be reflected in wages of additional labor benefits that place the price of labor above its marginal productivity.170

The ADB views Vanuatu’s employment laws (even prior to the 2008 reform) as being ‘the sole exception’171 to benign Pacific employment laws, with generous leave provisions and the severance allowance identified as creating costs that are problematic to the development of the private sector. Vanuatu’s employment laws also fare poorly in World Bank measures, with Vanuatu having the least flexible employment laws in the Pacific.172

Ideological foundations of the PAA

The central policy approach of the ADB (and the other major international financial institutions, the World Bank and the International Monetary Fund) involves the introduction of structural adjustment programmes that aim to downsize government

169 Ron Duncan, Sandy Cuthbertson and Malcolm Bosworth, Pursuing Economic Reform in the Pacific (1999) 13. 170 Ibid, 159. Similarly the World Bank, through its “Doing Business” survey, creates an index which measures the extent to which laws create barriers to private sector development. Less regulation in respect of “hiring and firing” employees and work hours rates better on its employing workers index. (See for example, World Bank, Doing Business 2010: Reforming through difficult times (2009) 22 – 26.) This index is controversial and was excluded from the aggregate rankings in 2011 and 2012, although data was still included in the reports as an annex (World Bank, Doing Business 2012: Doing business in a more transparent world (2012) 22). 171 Asian Development Bank, Vanuatu Economic Performance, Policy and Reform Issues, (1997) 77. 172 In 2010 Vanuatu ranked 75 out of 183 countries. The average regional ranking of the 10 Pacific island countries was 28.1 (Derived from country tables in World Bank, Doing Business 2010: Reforming through difficult times (2009)). This ranking was based on laws as of 1 June 2009, so excluded the 2008 and 2009 reforms. 46

and minimise government involvement in activities outside of the provision of core services.173 Complementing the downsizing of government is the enhancement of the private sector, particularly by removing government created barriers to development within the private sector.174 Foreign investment is to be encouraged as a source of capital, technology and expertise,175 although the development of the domestic private sector is also to be encouraged. Globalisation is seen to be beneficial, with international trade viewed as a driver of economic growth.176 All of these features were present in the CRP and continue to be present in the PAA.

The PAA, with its envisaged “downsized” role for government, aligns with free market ideology which is ‘hostile to State intervention in the workings of the market’.177 This ideology is also ‘opposed to international standard-setting which… prevents economic forces from taking their natural course.’178 Free market ideology, which is based on neoclassical economic theory, traces its convenient origin to Smith’s theory of the invisible hand, which asserts that people act to maximise benefit to themselves and that, when everyone is left to act freely this also maximises the benefit to society and the economy. Neoclassical economic theory holds that, left to its own devices, the labour market will settle into equilibrium, or a balanced state in which the wage is set at such an amount that the amount of labour demanded is

173 Core services have been defined by the World Bank as being the ‘provision of a stable macroeconomic environment that sets the rights incentives for efficient economic activity; provision of an institutional infrastructure, such as property rights, peace, law and order, and rules, to encourage efficient long-term investment; alleviation of poverty by providing basic education, health care, and economically viable physical infrastructure required for economic activity; and protection of the environment.’ (World Bank, Enhancing the Role of Government in the Pacific Island Economies (1998) 11.) 174 ‘The private sector can only flourish and create employment opportunities if the environment in which it operates is conducive to business. Frequently governments – deliberately or inadvertently, directly or indirectly – create an environment that adds to the costs of doing business, reduces profits, and discourages dynamism and entrepreneurship.’ (Paul Holden, Malcom Bale, and Sarah Holden, Swimming Against the tide? An assessment of the private sector in the Pacific (2004) 42) 175 The ADB notes that ‘increased investment, particularly foreign investment, create demand for skilled labor and provides a low cost means of training labor in the new technology that typically accompanies such investment. (Duncan et al, above n 169, 3.) 176 ‘Liberalising trade facilitates the introduction of new techniques and products. It also puts a cap on monopoly in both goods and labor markets.’ (Ibid). 177 Nicolas Valticos, ‘The ILO: A retrospective and future view” (1996) 135: 3-4 International Labour Review 473, 476. See also Dharam Ghai, ‘Decent Work: Universality and Diversity’ in Dharam Ghai (ed), Decent Work: Objectives and Strategies (2006) 1; Bob Hepple, ‘Rights at Work’ in Dharam Ghai (ed), Decent Work: Objectives and Strategies (2006) 33, particularly 51 – 53. 178 Valticos, above n 177, 476. 47

equal to the amount of labour supplied.179 However, if regulations provide minimum standards which are above the market equilibrium then they will reduce demand for labour whilst increasing supply of labour. This in turn leads to increased unemployment.

This position has support from theoretical literature within the law and economics movement. One of the leading figures within this movement, Richard Posner, in his analysis of minimum wage laws, states that a ‘minimum wage law… [forces] up the wage of non-union labor and so [reduces] the demand for that labor.’180 The entry on minimum wage laws in the Encyclopedia of Law and Economics notes that ‘[e]conomists have traditionally been hostile to minimum wage legislation, seeing it as an unwarranted interference with the operation of the market and a cause of unemployment among the less skilled’.181 The assumptions underlying such analysis of minimum wage laws also apply to other areas of regulation which increase labour costs.

This theoretical position is not entirely hostile to labour market regulation. It recognises that the free labour market may operate inefficiently due to matters such as imperfect information and the costs associated with hiring and firing workers and as a result regulation may be necessary in the limited situation of correcting market inefficiencies. 182 As such, neoclassicists ‘hold that state and other interventions in the free functioning of market forces, unless designed to correct market failures, lead to inefficiencies in resource allocations and hence to slower growth, wage and employment expansion and material progress for workers and enterprises.’183

179 An employers’ decision as to how much labour to hire depends on the cost of each employee in relation to the increased output, or product, that hiring that employee will result in. This rests upon the assumption that ‘the profit maximizing firm will tend to employ labor up to the point at which the value of the marginal product of that labor equals the extra cost of that labor.’ John T Addison and W Stanley Siebert The market for labor: an analytical treatment’ (1979) 35. Employment levels and wages will therefore be connected to the demand for the goods of service that the business is supplying. 180 Richard Posner, Economic Analysis of Law (5th ed, 1998) 361. 181 Simon Deakin and Frank Wilkinson, ‘Minimum Wage Legislation’ in B Boukaert & G De Geest The Encyclopedia of Law and Economics’ (2000) 561, 561. 182 Sangheon Lee and Deirdre McCann provide a summary of some recent studies in this area (Sangheon Lee and Deirdre McCann, ‘New Directions in Labour Regulation Research’ in Sangheon Lee and Deirdre McCann, Regulating for Decent Work (2011) 1, 9 – 14). For an overview of reasons why regulation may be justifiable see Johan Den Hertog, ‘General Theories of Regulation’ B Boukaert & G De Geest (eds) The Encyclopedia of Law and Economics (2000) 223. 183 Ghai, above n 177, 24. 48

The Decent Work Country Programme

The Vanuatu government also recognises, through its Decent Work Country Programme 2009 – 2012 (DWCP),184 that employment growth involves the ‘promotion of decent employment opportunities’.185 The DWCP identifies 4 priority areas:

Priority 1. Labour legislation reform and application of International Labour Standards; Priority 2. Promotion of decent employment opportunities, particularly for young women and men, and inclusive of persons with disabilities; Priority 3. Capacity building of tripartite partners and improvement of social dialogue; Priority 4. Increasing social protection.186

The priorities fall ‘within the overarching theme of “decent work for all men and women”’.187 Decent work is not defined, however. As the DWCP was developed by the ILO, the ILO definition of decent work can be adopted. The ILO’s vision for decent work was first proposed at the 87th Session of the International Labour Conference in 1999:

The primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, , security and human dignity. This is the main purpose of the Organization today. Decent work is the converging focus of all its four strategic objectives: the promotion of rights at work; employment; social protection; and social

184 Whilst the DWCP was signed on 22 April 2009, Vanuatu had been a member of the International Labour Organisation (ILO) since 2003 and the concept of decent work had been central to ILO activities since the late 1990s. Further, in 2005 target 1B of the United Nations Millennium Development Goals was added. Target 1B is ‘to achieve full and productive employment and decent work for all, including women and young people.’ (United Nations, ‘Millenium Development Goals’ http://www.un.org/millenniumgoals/poverty.shtml (Accessed 10 May 2012.)) It is reasonable to assume that the concept of decent work formed part of Vanuatu’s policy prior to the signing of the DWCP. 185 International Labour Organisation, above n 135, 14. My emphasis added. 186 Ibid. 187 Ibid. 49

dialogue… The goal is not just the creation of jobs, but the creation of jobs of acceptable quality.188

Whilst the DWCP does not only involve legal interventions, for law reformers responding to the decent work agenda, the substantive content of laws should aim at providing conditions of work which ensure that jobs are “of acceptable quality.”

Ideological foundations of decent work

The concept of decent work has its ideological foundations in a narrative of employment189 that assumes conflict: employers and employees with different interests joined uneasily in an ongoing relationship. Within the area of employment law the narrative becomes framed by contract,190 which is underpinned by the theoretical value of freedom of contract.191 As the employment relationship is conceptualised as contractual the traditional narrative results in an account of ‘law constraining, or humanising, or softening, or resisting contract in the name of justice, democracy, fairness and equality’,192 with the traditional justification for legal

188 International Labour Office, ‘Report of the Director General to the 87th Session of the International Labour Conference, 1999’ (1999) http://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-i.htm (Accessed 18 November 2010). 189 I have borrowed the concept of framing employment and employment law within a constituting narrative from Brian Langille, ‘Labour Law’s Back Pages’ in Guy Davidov and Brian Langille (eds) Boundaries and Frontiers of Labour Law (2006) 13. Narrative is representative of ideology because ‘story-telling is not a simple representing of a pre-existing reality, but is rather a politically motivated production of a certain way of perceiving the world which privileges certain interests over others.’ (Dennis K Mumby, ‘The Political Function of Narrative in Organizations’ (1987) 54 Communication Monographs 112, 113.) Because narratives ‘are not easily perceived as legitimating devices’ (Ibid, 112) they have powerful ideological impact. 190 In the early 21st century the notion that the employment relationship is contractual is so thoroughly embedded that it is probably unnecessary to observe that ‘[t]he common law views mutually agreed upon employment relationships through the lens of contract’. (Wells v Newfoundland [1999] 3 SCR 199 [30]). It is, however, acknowledged that literature recognises that framing the employment relationship as contractual misrepresents the relationship and so is somewhat inappropriate. (See Breen Creighton and Andrew Stewart, Labour Law: An introduction (4th ed, 2005) 11 – 16.) 191 ‘[P]ublic policy requires… that men of full age and competent understanding shall have the utmost liberty of contracting’. (Printing and Numerical Registering Co v Sampson (1875) LR 19 Eq 462 at 465.) For a general overview of the historical development of contract and philosophical shifts in relation to interfering with the freedom of contract see Burrows, Finn and Todd, Cheshire Fifoot & Furmston’s Law of Contract (7th New Zealand ed, 1988) chapters 1 and 2. 192 Langille, above n 189, 23. ‘[T]he one sentence version of the received wisdom’ about employment law is ‘that labour [is] being treated as a commodity by capitalists and the labour law [is] required to address this very problem.’ (Ibid, 30) See also: Breen Creighton and Andrew Stewart, above n 190, 5 – 7; Karen Wheelwright, above n 49, 9 – 10; Gordon Anderson et al, Butterworths Employment Law Guide (4th ed, 1994) 12 – 26. 50

intervention being that employees are relatively powerless in relation to employers, as ‘[n]ecessitous men are not, truly speaking, free men, but, to answer a present exigency, will submit to any terms that the crafty may impose upon them’.193 This being the case, ‘[t]he main object of labour law… [is] to counteract the inequality of bargaining power which is inherent… in the employment relationship.’194

The role of law in the employment relationship is often presented in the language of human rights.195 For instance the main international trade union body, the International Trade Union Congress, presents its programme as being ‘combating poverty, exploitation, oppression and inequality, ensuring the conditions for the enjoyment of universal human rights, and promoting effective representation of working women and men worldwide.’196 There are a number of international law instruments developed via the United Nations (UN) system that recognise human rights associated with employment. The Universal Declaration on Human Rights 1948 (UDHR) which is ‘the birth certificate of the [modern] Human Rights Movement’197 but, as a declaration, does not have binding legal effect, contains a number of provisions about workers’ rights.198 Seven of the nine core international human rights treaties as defined by the Office of the United Nations Commissioner for Human Rights also contain provisions about workers’ rights.199 Most important

193 Vernon v Bethwell (1762) 28 ER 838, 839. 194 Otto Kahn-Freund, quoted in Anderson et al, above n 192, 14. 195 For an explanation of the ideological nature of human rights and how this assists rights discourse to gain moral superiority see, for example, Makau Wa Matua, ‘The ideology of human rights’ (1996) 36 Virginia Journal of International Law 589. For a discussion in the context of labour law see Hugh Collins, ‘Theories of Rights as Justifications for Labour Law’ in Guy Davidov and Brian Langille (eds) The Idea of Labour Law (2012) 137, 139. 196 International Trade Union Congress, ‘Programme of the ITUC (Adopted by the Founding Congress of the ITUC Vienna, 1 - 3 November 2006)’ http://www.ituc- csi.org/IMG/pdf/Programme_of_the_ITUC.pdf (Accessed 20 October 2012). 197 Louis Henkin, ‘The Universal Declaration at 50 and the Challenge of Global Markets’ (1999) 25(1) Brook Journal of International Law 17, 19. 198 In addition to statements about the right to freedom from forced labour or slavery (Article 4) and freedom of association, including joining trade unions (Article 23(4)) Article 23 of the UDHR provides that: ‘(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. (2) Everyone, without any discrimination, has the right to equal pay for equal work. (3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection…’ Article 24 provides that ‘Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.’ 199 This list of nine core treaties is defined by the Office of the United Nations Commissioner for Human Rights http://www2.ohchr.org/english/law/ (Accessed 20 January 2011) . Of the “general” core human rights treaties, both the International Covenant on Economic Social and Cultural Rights (ICESCR) and the International Convention on Civil and Political Rights (ICCPR) include statements 51

for the active promotion of human rights based notions of employment law is the UN specialised agency, the International Labour Organisation (ILO) which promotes workers’ rights through the development of international Conventions and Recommendations (which together form the body of international labour standards200) and through programmes and projects in particular countries.201

LABOUR MARKET POLICY CHALLENGES

There is a degree of tension between these labour market policies. The 2006 PAA aims to raise ‘private investment by lowering obstacles to growth of private enterprise including lowering costs of doing business’.202 Legal regulation of employment in order to respect or protect human rights and ensure conditions of decent work may, however, increase costs of doing business. Globally this tension has fueled much debate. One strand of this debate has emerged from economic globalisation through the mechanism of trade agreements. This debate first emerged strongly in the 1990s, when there were moves to add a social clause into World

about the right to freedom from forced labour or slavery, freedom of association, including joining trade unions and the protection of children. The ICESCR also elaborates on the conditions of work. The five “population specific” core treaties, that aim to reduce discrimination against and protect the rights of specific populations of women, children, people with disabilities, migrant workers, and people of different races respectively, all contain provisions about employment. See Article 11 Convention on the Elimination of Discrimination Against Women; Article 31 and 32 Convention on the Rights of the Child; Article 27 Convention on the Rights of People with Disabilities; and Article 5 International Convention on the Elimination of All Forms of Racial Discrimination. As the name suggests, the International Convention on the Rights of Migrant Workers and their Families focused on a range of rights for this particularly vulnerable group of workers so many Articles are relevant to defining employee rights. The two that contain no provisions about employment concern torture and enforced disappearance. 200 It is acknowledged that human rights and workers’ rights, as stated in international labour standards, are conceptually slightly different. One of the reasons for this is because human rights are perceived as being inherent, universal, unqualified and indivisible whereas workers’ rights are instead ‘socially accepted principles of justice… [that] generally require positive actions by the state and others’ (Hepple, above n 177, 56. See, further, Hepple 56 – 59; Gillian MacNaughton and Diane F Frey, ‘Decent Work for All: A Holistic Human Rights Approach’ (2011) 26(2) American University International Law Review 441). Workers rights may be impossible to deliver due to contextual constraints. They therefore provide desirable social goals that can form the basis of development programmes rather than universal inherent rights. However, Amartya Sen notes that human rights and workers’ rights which reflect desirable social goals ‘are not necessarily antithetical… [unless] we make the fulfillment of each right a matter of absolute adherence (with no room for give and take and no possibility of acceptable trade-offs’ (Quoted in Hepple, above n 177, 57). In (non academic) discourse, asserting that workers have rights that should be reflected in law and practice, whether rights are conceptualised as “human rights” or “international labour standards”, is to make the same aspirational policy claim. 201 On the role of the ILO beyond the setting of labour standards, see Valticos, above n 177, 475. 202 Government of Vanuatu, above n 164, 3. 52

Trade Organisation (WTO) trade agreements,203 and has led to the question of whether international standardisation of employment law is needed in order to avoid exploitation of employees, or whether arguments supporting standardisation are, in fact, being used by developed countries to protect their own interests.204 It is particularly interesting for a developing country such as Vanuatu because of the “third world” voice within the debate.

On one side of the debate some voices, primarily from developed countries, have claimed that the lack of regulation of employment relationships in some developing countries is giving them an unfair advantage. There is a concern that some countries are using exploitative labour practices to attract foreign investment, which in turn shifts employment away from industrialised countries where labour costs are higher because of protective regulations.205 There is also a fear that the lack of regulation in some countries could result in a global “race to the bottom”, in which countries are forced to lower labour standards and practices in order to remain competitive.206

This side of the debate aligns with the position of the ILO, which was in part constituted on the basis that not having international labour standards puts countries with standards at a disadvantage.207 This can be seen in the preamble of the ILO’s

203 The WTO has rejected the proposition that it should develop a “social clause” and continues to resist pressure to become involved in labour standards. Whilst the issue has been raised since 1996, notably by President Clinton at the Seattle WTO meeting in 1999 ‘the WTO has been largely silent on labour related issues.’ (Luke Arnold, Labour and the World Trade Organization: Towards a Reconstruction of the Linkage Discourse’ (2005) 10(1) Deakin Law Review 83, 84.) See also Clyde Summers, ‘The Battle in Seattle: Free Trade, Labor Rights and Societal Values’ (2001) 22(1) University of Pennsylvania Journal of International Economic Law 61. 204 A summary of the different positions can be found in Anon, ‘Globalisation and its critics: A survey of globalisation’ The Economist (2001) 360(8241) Lift-out section. See also Jean-Louis Validire, ‘The Social Clause: an inconclusive debate’ (2001) 122 Labour Education 51; Andre Raynauld and Jean- Pierre Vidal, Labour Standards and International Competitiveness (1998). 205 In the early 1990s ‘AT&T revenues and profits [were] increasing, yet there have been massive job cuts and movement of capital to… Mexico and Asia. Why invest in the United States if AT&T can invest in Mexico and pay people 80 cents per hour?’ (Cohen quoted in Raynauld and Vidal, above n 202, 7.) 206 The race to the bottom was a ‘phrase [first] used by Justice Brandeis in 1933 to describe the competition between states to reduce regulatory requirements so as to attract business.’ (Bob Hepple, ‘New Approaches to International Labour Regulation’ (1997) 26(4) Industrial Law Journal 353, 354- 355.) 207 The ILO’s website observes that, in addition to social justice and humanitarian concerns one of the reasons the ILO was constituted was because ‘ There was also increasing understanding of the world's economic interdependence and the need for cooperation to obtain similarity of working conditions in countries competing for markets.’ (International Labour Organisation, ‘Origins and history’ (undated) http://www.ilo.org/global/about-the-ilo/history/lang--en/index.htm (Accessed 28 April 2015).) 53

Constitution, which was adopted as part of the post-World War I Treaty of Versailles 1919:

Whereas universal and lasting peace can be established only if it is based upon social justice;

And whereas conditions of labour exist involving such injustice hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled; and an improvement of those conditions is urgently required…

Whereas also the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries;208

On the other side of the debate, some voices, particularly those from developing countries, have argued that industrialised countries are trying to use workers’ rights/international labour standards in a manner calculated to protect their own interests. One argument is that if developing countries are required to adhere to the same labour standards as industrialised countries then they will not be able to attract foreign investment. This helps to protect the jobs of employees based in the developed world as companies will not have cheaper labour costs providing an incentive to relocate. It does not, however, help to create jobs within developing countries. Further, growth of domestic industry will be hindered. One way this may occur is that domestic businesses will not be able to afford to implement such labour standards, and will collapse. Another way that this may occur is that domestic businesses have to increase the cost of the goods and services that they produce. This, in turn, reduces demand for those goods and services which then has the flow- on effect of reducing demand for labour.209 The statement of former Malaysian

208 The full Constitution, with amendments is available at http://www.ilo.org/dyn/normlex/en/f?p=1000:62:0::NO:62:P62_LIST_ENTRIE_ID:2453907:NO (Accessed 28 April 2015). The text of Part XIII of the Treaty of Versailles 1919 can be found at http://avalon.law.yale.edu/imt/partxiii.asp (Accessed 28 April 2015). The Preamble has not been amended since 1919. 209 Clyde Summers, above n 203, particularly 68 – 73. 54

Prime Minister Mahathir is representative of the view that internationalised labour standards are nothing more than disguised protectionism:

Western governments openly propose to eliminate the competitive edge of East Asia. The recent proposal for a world-wide minimum wage is a blatant example. Westerners know that this is the sole comparative advantage of the developing countries. All other comparative advantages (technology, capital, rich domestic markets, legal frameworks, management and marketing networks) are with the developed states. It is obvious that the professed concern about workers’ welfare is motivated by selfish interest. Sanctimonious pronouncements on humanitarian, democratic and environmental issues are likely to be motivated by a similar selfish desire to put as many obstacles as possible in the way of anyone attempting to catch up and compete with the West.210

This tension between economic and social policy has been commented on at a regional level. In 2005 Pacific Islands Forum Economic Ministers’ Meeting made it clear that to foster private sector led development, a variety of barriers to investment, including costs of ‘hiring and firing workers’211 need to be investigated. This paper noted that ‘worker interests have to be balanced against the negative impacts of strict regulatory intervention, including less job creation and lower productivity. Perfecting this balance is a difficult task.’212

The tension between the desire for decent work conditions and the desire for jobs in general has also been commented on in respect of the ILO’s decent work agenda:

Three elements are essential to the achievement of decent work objectives: the need for jobs, the honouring of core labour standards, and the pursuit of further improvements in job quality…[but] beyond some point the

210 Quoted in Raynauld and Vidal, above n 204, 5 – 6. 211 ‘Costs of Doing Business in the Pacific’ (Session 1 paper, Forum Economic Ministers Meeting, Funafuti Tuvalu, 8 — 9 June 2005) 1. 212 Ibid, pp 2 – 3. 55

achievement of one of these objectives may come at the expense of another.213

The tension between economic and social policy should not be an “either or” proposition:

In actual fact neither could exist without the other: without a sound economic policy social policy is likely to lead to disaster. Conversely, without an equitable social policy, economic policy would become an end in itself, at the risk of neglecting the human factor and resulting in the survival of the fittest, oppression of the weak, injustice and, ultimately, social disruption.214

In common with other countries, Vanuatu’s labour market policy faces the challenge of having to reconcile the potential tension between economic and social policy, balancing competing interests in order to achieve the best outcomes for the country.

A further difficulty that complicates reconciliation of the tension between economic and social policy is that the concept of decent work is vague. The ILO statement that decent work involves ‘the promotion of rights at work; employment [job creation]; social protection; and social dialogue’215 is too general to give a clear answer to the question of what conditions of decent work may involve. ‘Indeed, some believe that decent work is a well meaning, nice sounding phrase that is not definable or measurable. This lacuna… greatly hampers ILO’s own work, as well as the ability of

213 Gary S Fields, ‘Decent work and development policies’ (2003) 142(2) International Labour Review 239, 240 – 241. See also Dharam Ghai, ‘Decent Work: Universality and Diversity’ in Dharam Ghai (ed), above n 177, 24 – 25. 214 Valticos, above n 177, 474 – 475. 215 International Labour Organisation, ‘Report of the Director General to the 87th Session of the International Labour Conference, 1999’ (1999) http://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-i.htm (Accessed 18 November 2010). Clarifying statements are found on, International Labour Organisation, ‘Decent Work Agenda’ http://www.ilo.org/global/about-the-ilo/decent-work-agenda/lang--en/index.htm (Accessed 10 September 2012). Whilst the ILO’s definition of decent work has attracted some criticism, this criticism has been directed at the ILO’s definition of various core labour standards, and the potential for these core labour standard to be used to narrowly define the concept, rather than at the broad concept of decent work. See, for example, Gillian MacNaughton and Diane F Frey, ‘Decent Work for All: A Holistic Human Rights Approach’ (2011) 26(2) American University International Law Review 441. For an overview of criticisms see Adelle Blackett, ‘Situated Reflections on International Labour Law, Capabilities and Decent Work: The Case of Centre Maraicher Eugene Guinois’ (2007) Revue quebecoise de droit international (Hors-serie) 223, 226 – 230. 56

its constituents to monitor and evaluate the situation in their countries.’216 Whilst work within the ILO on indicators for decent work is progressing, this work primarily focuses on “statistical indicators” that focus on quantitative measures of decent work (such as the number of children in wage employment or self- employment) rather than “legal indicators” that assess legal norms (such as the content of laws prohibiting child labour).217 As such, this work does not help law reformers to define what conditions of decent work are. As a result, before law reformers in Vanuatu can attempt to reconcile economic and social policies they need to define, more clearly, what its social policy involves.

CONCLUSION

This chapter aimed to provide some insight into the Vanuatu context, and the specific challenges it faces. These challenges are numerous. The country is geographically scattered, which affects the delivery of state services and state infrastructure. It also means that there is no united domestic market for goods and services, which affects development of the domestic private sector. Remoteness from export markets makes it difficult to create an export led private sector. The population is young and growing more rapidly than the private sector, leading to increasing unemployment. Although there is unemployment, education levels tend to be low and development of the private sector is hindered by a shortage of skilled employees. The country is affected by urban drift. Urban drift coupled with the failure of the traditional subsistence economy to function in urban areas and low pay for low skilled jobs is creating specific urban poverty issues. This may, in turn, be fueling urban crime.

Even a country with a stable government system would find these challenges difficult to respond to. Vanuatu’s political system does not, however, operate in ways that are conducive to stable government. Consistent responses to the various labour

216 Richard Anker, Igor Chernyshev, Philippe Egger, Farhad Mehran and Joseph Ritter, ‘Measuring Decent Work with Statistical Indicators’ (Working Paper No. 2, Policy Integration Department, International Labour Office, October 2002), vi. 217 Considerable progress has been made on developing statistical indicators, with the ILO’s Decent Work Indicators for Asia and the Pacific: A Guidebook for Policy-makers and Researchers (ILO, 2008) providing a regional example of the statistical indicators that can be used to measure decent work. The ILO manual Decent Work Indicators: Concepts and definitions (May 2012) provides statistical indicators, coupled with some general legal indicators, but these legal indicators are descriptive, and do not measure the content of laws against any external standards. 57

market issues are further complicated by economic and social policies that have different, and somewhat antagonistic, ideological foundations. Law reformers who wish to implement social policy are further challenged by the lack of clarity about what, specifically, decent work actually entails.

Vanuatu’s 2008 employment reforms, discussed in the following chapters, are considered in light of this context.

58

CHAPTER 2 ‘THIS BILL WILL CAUSE LARGE SCALE UNEMPLOYMENT IF GAZETTED’:1 THE 2008 REFORM

INTRODUCTION

The catalyst for this thesis was the Employment (Amendment) Bill 20082 (the 2008 reform). This chapter sets the scene for the later discussion in three ways. First it provides an overview of the changes brought about by the 2008 reform, and analyses the potential impact that these changes would have on productive labour costs and employer liabilities. Second, it describes the public reaction to the 2008 reform and the public perception of what drove the reform. Third, it explains the aftermath of the 2008 reform and summarises the current state of Vanuatu’s employment contract law. This discussion is used to clarify further analytical questions about the content of the 2008 reform.

THE 2008 REFORM

Overview of the changes

The 2008 reform dealt with three key areas: annual leave; maternity protection; and severance allowance. Minor changes were also made to sick leave and notice provisions. The major changes were as follows.3

The paid annual leave allowance for eligible employees increased from 12 days per year to 21 days per year for those who had worked less than 20 years with the same

1 Front page newspaper headline, Vanuatu Daily Post 22 November 2008 (Marc Neil-Jones, ‘This Bill will cause large scale unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 1. 2 As noted in the introduction, in Vanuatu after Bills have been passed by Parliament they do not immediately become Acts. Instead they only become Acts after the President has assented to them (Article 16(4) Constitution of the Republic of Vanuatu). As all public discussion in this thesis of the piece of legislation occurred prior to June 2009, the law is referred to as a Bill. 3 The controversial changes are discussed in more detail in chapter three. 59

employer.4 For those who had worked for 20 – 24 years, the paid annual leave allowance increased from 24 days per year to 36 days per year.5 The changes to maternity protection included doubling the rate of payment to a woman on maternity leave6 and doubling the time permitted to be taken as a paid nursing allowance.7 The severance allowance provisions8 changed by reducing the time an employee who chose to resign had to work before becoming eligible for a severance payment.9 This increased the number of people who would become eligible for a severance payment. The amount of the severance allowance also quadrupled.10

Less controversial changes included increasing the pool of employees who would be entitled to paid sick leave11 and changing the notice provisions in order to provide the employer with a remedy in situations where the employee failed to give the correct notice.12

4 Item 1 of the Schedule to the Employment (Amendment) Bill 2008. 5 Item 2 of the Schedule to the Employment (Amendment) Bill 2008. 6 Item 5 of the Schedule to the Employment (Amendment) Bill 2008. 7 Item 7 of the Schedule to the Employment (Amendment) Bill 2008 8 Severance allowance is a payment that, amongst Pacific Island countries at least, is unique to Vanuatu and provides eligible employees with an extra payment at the end of their contract. 9 Item 10 of the Schedule to the Employment (Amendment) Bill 2008. 10 Items 11 & 12 of the Schedule to the Employment (Amendment) Bill 2008. 11 Item 3 of the Schedule to the Employment (Amendment) Bill 2008. 12 Item 9 of the Schedule to the Employment (Amendment) Bill 2008. 60

Area Pre 2008 law 2008 reform Severance: amount 2 weeks’ salary per year 2 months’ salary per year worked worked

Severance: eligibility in the Employee must have worked Employee must have worked event that the employee 10 years 1 year resigns Annual leave: amount (on 1 – 19 years: 12 days/year 1 – 19 years: 21 days/year 100% salary) 20 – 24 years: 24 days/year 20 – 24 years: 36 days/year 25 – 29 years: 48 days/year 25 – 29 years: 48 days/year 30 + years: 72 days/year 30 + years: 72 days/year Maternity: payment 50% of salary for up to 12 100% of salary for up to 12 weeks weeks Nursing leave: amount ½ hour twice per day on 1 hour twice per day on 100% salary 100% salary

Sick leave: eligibility 12 months continuous 6 months continuous employment employment Notice: if employee leaves No statutory regulation – If employee fails to give without giving notice could be liable for common notice employer can deduct law damages for breach of salary that would have been contract paid during the notice period from the final payment to the employee

Table 2.1: Summary of changes to the Employment Act [Cap 160] by the 2008 reform

Impact of the 2008 reform: productive labour costs

As employees are employed for their productive capacities, it is the actual cost of productive labour, or the cost of labour per day actually worked, which is important to an economically rational employer.13 The productive labour cost needs to take into account the direct wage, cash benefits paid to the employee with the wage, deferred cash payments and non-salary benefits paid for by the employer for the employee’s benefit.14

13 JS Mill explained the economically rational person ‘as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end.’ (Quoted in Joseph Persky, ‘Retrospectives: The Ethology of Homo Economicus’ (1995) 9(2) The Journal of Economic Perspectives 221, 222.) Decisions will be informally rational in the sense that decisions will be ‘deliberative and consistent. The decision maker has thought about what he or she will do and can give a reasoned justification for the choice.’ (Thoma Ulen, ‘Rational Choice Theory in Law and Economics’ in Boudewijn Bouckaert and Gerrit De Geest (eds) Encyclopedia of Law and Economics (2000) 790, 791). Decisions will also aim to maximise wealth or, more broadly, utility (Ibid, 792). 14 For the definition of fringe benefits see Greg J Duncan, ‘Earnings Functions and Non-Pecuniary Benefits’ (1976) 11(4) Journal of Human Resources 462. 61

To illustrate the impact of the 2008 reform on employers’ productive labour costs, one can examine the simplified example of an employee who has worked for more than 1 year, is working 5 days per week and is earning 1000 vatu in direct wages per day.15 The example assumes that the employee:

 is provided with the statutory minimum amount of annual leave; and  is provided with the statutory minimum amount of paid sick leave; and  takes all sick leave; and  is entitled to a severance allowance payment on termination.

The assumptions are not necessarily a representation of reality, as an employee may not take the full amount of sick leave that he or she is entitled to.16 Further, severance may not be payable as employees must have worked for a minimum qualifying period (which varies depending upon whether the employer or the employee terminates the contract) before being entitled to a severance payment and employees who are terminated for serious misconduct are not entitled to severance allowance.17 There is, however, no uncertainty about the impact of statutory annual leave on productive labour costs because unused annual leave accumulates and must be “paid out” on termination.18 These assumptions do, nonetheless, allow us to see the maximum possible cost of productive labour inputs when annual leave, sick leave and severance allowance are included with the direct wage cost.

The amount of annual leave varies depending upon the amount of time worked and only women are entitled to maternity protection. In order to consider the various combinations of impacts that the 2008 reform could potentially produce, taking into account variations due to length of service and gender differences due to the potential for only women to take maternity leave, the productive labour costs are calculated

15 The figure has been chosen as differences between the direct wage paid and the productive labour cost also, effectively, demonstrates the percentage change. Such a wage would only be legal under Vanuatu’s current minimum wage laws if the person was working part-days. 16 It should be remembered that because employees are not required to present a medical certificate for paid sick leave until they have been sick for more than 2 days if working in the main urban centres of Port Vila or Luganville or more than 4 days if working elsewhere (Section 34(2) Employment Act [Cap 160]) it is easy to for employees to “rort” the sick leave entitlement. 17 Section 55(2) Employment Act [Cap 160]. 18 Section 32 Employment Act [Cap 160] and Samson v Tailleur [1988] VUMC 2 http://www.paclii.org. 62

under five19 different scenarios. Scenarios one and two show labour costs in years that no maternity leave is taken

1. the employee has worked between 1 and 20 years20 and takes no maternity leave; 2. the employee has worked for between 20 and 25 years and takes no paid maternity leave.

Scenarios three and four show costs in years that maternity leave is taken:

3. the employee has worked between 1 and 20 years and takes maternity leave; 4. the employee has worked for between 20 and 25 years and takes maternity leave.

It is likely that women will take maternity leave some years but not others. Scenario 3 and 4 give an accurate statement of the productive labour cost in the particular years that women take maternity leave but do not indicate the average productive labour cost of the employee over the course of her employment. Scenario 5 demonstrates the average cost per year of an employee who works for 10 years and has three children21 over the course of this period.

For each scenario the costs immediately prior to the 2008 reform and under the 2008 reform are considered. The example also includes the effect of Vanuatu National Provident Fund (VNPF) contributions on labour costs as these are fixed and apply to

19 Annual leave amounts also increase for employees who have worked 25 – 29 years and more than 30 years. It is therefore possible to have additional scenarios illustrating the maximum labour costs if length of service increases beyond 25 years. However, because the amount of annual leave for employees who work for 25 years or more was not altered by the 2008 reform these scenarios are not presented. 20 In scenarios 1 and 3 the first year of employment is excluded as no sick leave is payable in this period. 21 Three children has been selected as the national average number of children per woman aged over 15 is 2.6. (Vanuatu National Statistics Office, 2009 National Population and Housing Census Basic Tables Report Volume 1 (2011) 153.) There is no data on the average length of employment with one employer, so 10 years has been selected for convenience. 63

all employees. It ignores other fringe benefits that have a less fixed effect on labour costs.22

As wages are paid in return for productive labour outputs and employees can only be productive on the days that they are actually at work, measuring labour costs by dividing direct wages, deferred cash benefits and other cash benefits that are not directly paid to the employee by the number of days worked provides an accurate measure of the cost of labour inputs per day of productive work. This does not mean that the employee in the example directly receives more than his or her 1000 vatu per day in his or her “pay packet”. Paid leave is provided for days that employees do not work in order that their wages for that week do not decrease. Severance is paid at the end of the contract. Provident fund contributions are paid directly to the provident fund. Increases in these benefits do not, therefore, assist employees to meet daily costs of living.

Scenario 1: The employee has worked less than 20 years and takes no maternity leave

Labour costs using the pre-2008 law23

This scenario provides that the employee has 260 paid work days (52 weeks x 5 days per week) in a year and receives 260,000 vatu in direct wages per year. An additional 4% (10,400 vatu per year) is paid by the employer in VNPF contributions annually.24 Under the pre-2008 law the anticipated severance payment is 15 calendar days’

22 In particular: the effect of public holidays is being ignored as it is currently possible to give waged employees unpaid public holidays so public holidays do not necessarily contribute to increased productive labour costs, but instead may result in a reduction of productive capacity of a firm; repatriation allowance is being ignored because it applies to only a small percentage of workers; and worker’s compensation insurance costs are being ignored because they vary depending upon the employer’s industry and the number of employees employed. The impact of nursing allowances is discussed separately below. 23 In Vanuatu, once statutes are included in consolidations they become known by chapter numbers. The most recent consolidation in Vanuatu occurred in 2006. As there were no further amendments to the employment law between 2006 and 2008 the Employment Act [Cap 160] is a referral to the law immediately prior to the 2008 amendment. 24 Section 25 Vanuatu National Provident Fund Act [Cap 189] as amended by section 10 of the Vanuatu National Provident Fund Amendment Act 2003. 64

wages (11,000 vatu).25 With these costs factored in the labour cost becomes 281,400 vatu per annum. The employee is entitled to 12 days paid annual leave per year26 and up to 21 days of paid sick leave.27 If all this leave is taken then only 227 days are worked although the employer is paying wages for 260 days. The cost of the labour input in relation to the number of days worked (the productive labour cost) is therefore 1240 vatu per day (281,400/227) and not the 1000 vatu per day direct wage.

Labour costs using the 2008 reform

Under the 2008 reform the direct wage and VNPF contribution remain the same as in the above paragraph (260,000 vatu per year direct wage plus 10,400 vatu VNPF contribution), but the anticipated severance payment is 2 months wages (44,000 vatu).28 The labour cost therefore becomes 314,400 vatu per annum. The employee is entitled to 21 days paid annual leave per year29 and up to 21 days of paid sick leave.30 Assuming that the employee takes all of this leave only 218 days are worked (260 – 21 – 21) although the employer is paying wages for 260 days. The productive labour cost is therefore 1442 vatu per day worked (314,400/218).

Scenario 2: The employee has worked for between 20 and 25 years and takes no maternity leave

Labour costs using the pre-2008 law

As provided in scenario 1, the employee is entitled to 260,000 vatu in direct wages, 10,400 vatu in VNPF contributions and 11,000 vatu in severance allowance (281,400 vatu). Under the pre-2008 law, an employee who works for between 20 and 25 years is entitled to 24 days paid annual leave31 and 21 days paid sick leave. Under these

25 Section 56(2) Employment Act [Cap 160] and Public Service Commission v Manuake [2003] VUCA 21 http://www.paclii.org, which establishes that 15 days wages means 15 calendar days and not 15 working days. 26 Section 29(1) Employment Act [Cap 160]. 27 Section 34(1) Employment Act [Cap 160]. 28 See n 10 above. 29 See n 4 above. 30 Section 34(1) Employment Act [Cap 160]. 31 Section 29(2) Employment Act [Cap 160]. 65

conditions only 215 days are worked (260 days – (24 + 21)) so the productive labour cost becomes 1309 vatu per day worked (281,400/215).

Labour costs using the 2008 reform

As provided in scenario 1, the employee is entitled to 260,000 vatu in direct wages, 10,400 vatu in VNPF contributions and 41,000 vatu in severance allowance (314,400 vatu). Under the 2008 reform, an employee who works for between 20 and 25 years is entitled to 36 days paid annual leave32 and 21 days paid sick leave. Under these conditions only 203 days are worked (260 days – (36 + 21)) so the productive labour cost becomes 1549 vatu per day worked (314,400/203).

Scenario 3: The employee has worked less than 20 years and takes maternity leave

Labour costs using the pre-2008 law

Excluding maternity leave, the pre-2008 annual labour cost including VNPF contributions and severance allowance for a person employed on a direct wage of 1,000 vatu per day, 5 days per week is 281,000 vatu (see scenario 1 above). Leave entitlements are 33 days per year. Adding the impact of maternity leave payments, if the employee also takes maternity leave for the full twelve week entitlement then the employer has to pay a further 60 days of leave on ½ salary.33 This increases the productive labour cost to 1428 vatu per day worked in years that maternity leave is taken (281,400/(260 – 33 – (0.5 x 60)).

32 See n 5 above. 33 Section 36(2) Employment Act [Cap 160]. 66

Labour costs using the 2008 reform

Excluding maternity leave, the annual labour cost under the 2008 reform including VNPF contributions and severance allowance for a person employed on a direct wage of 1,000 vatu per day, 5 days per week is 314,400 vatu (see scenario 1 above). Leave entitlements are 42 days per year. If the employee also takes maternity leave for the full twelve week entitlement then the employer has to pay a further 60 days of leave on full salary.34 This increases the productive labour cost to 1990 vatu per day worked in years that maternity leave is taken (314,400/(260 – 42– 60)).

Scenario 4: The employee has worked for between 20 and 25 years and takes maternity leave

Labour costs using the pre-2008 law

In the fourth scenario the impact of maternity leave must be added into the costs from scenario 2 (1309 vatu per day based on 281,400/215). Under the pre-2008 law the maximum paid maternity leave allowance is 60 days on 50% pay.35 Under these conditions the productive labour cost becomes 1521 vatu per day worked in years that maternity leave is taken (281,400/(215 – (.05 x 60))).

Labour costs using the 2008 reform

The labour cost in scenario 2 is 1549 vatu per day (314,400/203). Under the 2008 reform, again the maximum paid maternity leave allowance is 60 days on 100% pay.36 Under these conditions the productive labour cost becomes 2199 vatu per day worked in years that maternity leave is taken (314,400/(203 – 60)).

34 See n 6 above. 35 Section 36(2) Employment Act [Cap 160]. 36 See n 6 above. 67

Scenario 5: The employee works for 10 years before resigning and takes 3 periods of maternity leave in this time

Labour costs using the pre-2008 law

In order to calculate the labour costs under this scenario, the average wage worked each year needs to be calculated. Scenario 1 provides the labour costs for the years that the employee does not take maternity leave. This amount is 1240 vatu per day. Scenario 3 provides the labour costs for the years that the employee does take maternity leave. This amount is 1428 vatu per day. The labour costs in the first year need to take into account that no sick leave is payable during the first year of employment. Assuming the employee does not take maternity leave in the first year the annual productive labour cost in this period is 1135 vatu. The average annual productive labour cost over the course of the woman’s employment in this scenario is 1286 vatu per day ((1135 + (1240 x 6) + (1428 x 3))/10).

Labour costs using the 2008 reform

Again, scenario 1 provides the labour costs for the years that the employee does not take maternity leave. This amount is 1442 vatu per day. Scenario 2 provides the labour costs for the years that the employee does take maternity leave. This amount is 1990 vatu per day. The average annual productive labour cost over the course of the woman’s employment in this scenario is 1606 vatu per day (((1442 x 7) + (1990 x 3))/10). It can be noted that under the 2008 reform the period of continuous employment to become eligible for sick leave reduced to 6 months, so 21 days of sick leave can be taken in year one of employment.

Summary

For ease of comparison, the labour cost per day of productive labour under each scenario is shown in table two below. The assumptions that these figures are based on are unlikely to be entirely realistic. Employees may not take their full entitlement to paid sick leave or maternity leave and may not be eligible for a severance allowance payment depending upon how and when the contract is terminated. The

68

average productive labour cost of a woman who takes maternity leave will vary depending upon the number of years worked and the number of times maternity leave is taken. However, it does show the productive labour costs if the employee takes maximum statutory entitlements in a year.

Direct wage Actual labour cost per day Actual labour cost per day paid per day of productive labour, pre of productive labour, 2008 reform 2008 reform Employee employed between 1 - 20 years. VNPF, Annual leave, severance and maximum sick 1000 1240 1442 leave paid. No maternity leave. Employee employed 20 – 24 years. VNPF, Annual leave, severance and maximum sick 1000 1309 1549 leave paid. No maternity leave. Employee employed between 1 - (Cost in years that maternity (Cost in years that maternity 20 years. VNPF, Annual leave, 1000 1428 1990 severance and maximum sick leave is taken) leave is taken) leave paid. Maternity leave paid. Employee employed 20 - 24 years. VNPF, Annual leave, 1521(Cost in years that maternity 2199(Cost in years that maternity severance and maximum sick 1000 leave is taken) leave is taken) leave paid. Maternity leave paid annually. Employee employed 10 years. (Average cost over the course (Average cost over the course VNPF, Annual leave, severance 1000 1286 1606 and maximum sick leave paid. of the employee’s employment) of the employee’s employment) Maternity leave taken 3 times.

Table 2.2: Summary of impacts on labour costs of the pre-2008 law and the 2008 reform

The table does not factor in the impact on labour costs of paid nursing time, mainly because few women currently use this entitlement. However, if employees take up their statutory nursing time, the impact of nursing time on labour costs is sizeable. For example, under the pre-2008 law a woman who was remunerated for an 8 hour day, which is the maximum normal working hours per day,37 would be entitled to 1 remunerated hour per day, or 12.5% of her time, as a nursing break. If the woman is paid 170 vatu per hour in direct wage (which is the minimum wage as of September 2012) but only works for 7 productive hours, ignoring the impact of other possible fringe benefits her “productive hours wage” becomes 194 vatu per hour, which is a 14% increase over the direct wage. Under the 2008 reform the same woman would

37 Section 22(1) Employment Act [Cap 160]. 69

be entitled to 2 remunerated hours per day as a nursing break. If the woman is paid 170 vatu per hour in direct wage but only works for 6 productive hours, her “productive hours wage” then becomes 227 vatu per hour, which is a 33% increase over the direct wage.

Impact of the 2008 reform: liabilities

Another significant cost aspect of the 2008 reform was the “retroactivity” of the increase to severance allowance, in the sense that employees who had been employed prior to 2008 but terminated after the 2008 reform would have their severance payment for the full time of employment calculated in accordance with the law at the time of termination.38 To illustrate we can take an example of an employer who has employed an employee for 10 years and at the time of termination is paying the employee 1000 vatu per day for a 5 day work-week. The employee’s severance entitlement prior to the 2008 law change would have been 15 calendar day’s wages x the number of years worked, or 11,000 x 10, which equals 110,000 vatu. If, however, the contract were to be terminated under the 2008 reform, the amount becomes 2 month’s wages x the number of years worked, or 44,000 x 10, which equals 440,000. Whilst a responsible employer who has been managing its employment liabilities should have been saving for the potential severance payment, once the 2008 reform came into effect even a responsible employer who has been saving in order to meet severance payments would find its savings short by 330,000 vatu.

The impact of the sudden increase is further compounded by accounting practices. The potential liability for severance shows up immediately as a liability on the employer’s accounts. The sudden increase in this liability could affect the solvency of businesses, which in turn affects their relationship with lending institutions, which may refuse further lending or call in loans. As explained by the Tom Bayer of the Vanuatu Financial Centre Association:

38 A plain English interpretation of the statute means that the increase to severance allowance has “retroactive” effect. This was challenged in court. On 30 November 2012 the Supreme Court ruled that the plain English interpretation of the statute is correct (BJ Skane, ‘Severance pay test case’ Vanuatu Daily Post Online 5 December 2012 http://www.dailypost.vu/content/severance-pay- %E2%80%98test%E2%80%99-case (Accessed 6 December 2012). At the time of submission of the PhD the decision was being appealed by one of the original defendants. This appeal was, however, unsuccessful (Wilco Hardware Holdings Ltd v Attorney General [2013] VUCA 12 http://www.paclii.org). 70

If a company has a 20 million vatu severance allowance provision in its books now for its staff… it will suddenly go to 80 million. That extra 60 million is an expense this year and must be taken up immediately. This will put many companies into insolvency… and the banks will withdraw their lending facilities as companies will be insolvent.39

Impact of the 2008 reform: employment and foreign investment

As Vanuatu does not regularly conduct labour market surveys there are no accurate labour market statistics that show the impact of the 2008 reform on employment or wage levels. The discussion in this section is therefore based upon a combination of newspaper reports, emails detailing actions that companies took in response to the announced changes and personal observations.

In Vanuatu, employees on contracts for an indefinite period can be terminated without reason by giving notice.40 A number of employers (who were able to afford to pay out severance allowances under existing allowance levels to all of their staff at the same time) terminated all of their employees and paid out whatever severance was owed under the old rates. Some employees, but not all, were then re-employed on different conditions that took into account the costs imposed by the 2008 reform.41 Whilst there are various approaches that could be taken to restructuring the costs of the employment relationship, the two types of employment contract that appeared to be the focus of most attention were contracts for part time staff and contracts that provided staff with remuneration in the form of minimum wage plus cash bonuses. The use of part time staff was an appealing option for some employers as employees who work less than 4 days per week are not entitled to severance

39Marc Neil-Jones, ‘This Bill will cause unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 4. 40 Section 49 Employment Act [Cap 160]. 41 Speculation about this occurring is recorded in the media: Marc Neil-Jones, ‘This Bill will cause large scale unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 1. Some actual terminations are also recorded: Marc Neil-Jones, ‘This Bill will cause unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 4; Bob Makin, ‘Businesses terminating employees “Does the Government know what it is doing?”’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008 1; Clarence Marae, ‘ Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5; Ricky Binihi, ‘Crowby will listen to employers, workers’ Vanuatu Daily Post (Port Vila, Vanuatu) December 19 2008, 2. 71

allowance42 or paid annual leave.43 Paying minimum wage plus cash bonuses was an attractive option for others because severance allowance is only calculated on the basis of wage remuneration, and not bonuses or other allowances.44 Restructuring pay therefore minimised severance payments, whilst also creating a work environment in which productivity could be rewarded. Another approach to restructuring that some businesses took was to get business licenses for former employees and make them independent contractors.45

Whilst there are no labour market surveys for the relevant period, there are other data sources which give some indication of employment levels before and after the reforms were announced. As discussed below, these data sources support the newspaper reports and personal observations that suggested that job losses occurred.

As all employees (including public and private sector) who earn more than 3,000 vatu per month are legally required to contribute to the Vanuatu National Provident Fund (VNPF), VNPF statistics give some indication of employment levels. Statistics on the number of employees actively contributing to the VNPF indicate that between quarter 4 of 2008 and quarter 1 of 2009, the number fell from 22,164 active VNPF contributors to 15,314 active VNPF contributors 46 - a decrease of 6,850 employees, or more than a quarter of active VNPF members. There can be seasonal variations in employment, there are sometimes issues of non-compliance with VNPF and there was a spike in active VNPF contributors in quarter 4 of 2008. However, if one looks at the average level of contributors from 2008 and 2009, then umber still fell from

42 Sections 54(1) and 54(2)(a) Employment Act [Cap 160]. 43 Section 29 (1) Employment Act [Cap 160] and Daniel v Nguyen Huu Hong [2004] VUSC 40 http://www.paclii.org, which establishes that, for the purposes of determining eligibility for annual leave, continuous employment means that a person must have worked for 22 or more days per month. 44 Banque Indosuez Vanuatu Ltd v Ferrieux [1990] VUCA 3 http://www.paclii.org. 45 Marc Neil-Jones, ‘This Bill will cause large scale unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 1. It can be noted that this not a legal way in which to avoid obligations to employees because the nature of the relationship, and not the form of it, determines whether someone is an employee or an independent contractor (Public Prosecutor v Lowen [2003] VUSC 31 http://www.paclii.org). 46 Reserve Bank of Vanuatu, Reserve Bank Quarterly Report 1 2011 (2011) Table 46 available at http://www.rbv.gov.vu/attachments/article/114/Mar%202011%20%28Q1%29%20NUMBER%20OF %20PROVIDENT%20FUND%20CONTRIBUTING%20MEMBERS%20%28FULL%20EMPLOY MENT%29.pdf (Accessed 15 April 2013). 72

17549 active VNPF contributors to 15,956 active VNPF contributors47 – a decrease of 1593 employees.

Some data is also available from the business license database, maintained by the Vanuatu Customs and Inland Revenue Department. This database records the number of full time equivalent employees engaged in formal sector businesses. It is based on self-reporting by businesses at the time they renew their business licenses, and the self-reported figures are not subject to verification. This data indicates that between 2008 and 2010 the number of full time equivalent local employees in formal sector businesses in Port Vila and Luganville declined 12.6%, from 11,161 to 9,755.48

Another factor that may have affected the amount of jobs was the closure of businesses. Whilst there are no statistics on insolvencies, all foreign investors must apply to the Vanuatu Investment Promotion Authority (VIPA) for approval of new business proposals or for variations on existing businesses. Foreign investors who currently hold VIPA approval and wish to continue operating must apply annually for renewal. Statistics on levels of foreign investment can be used to provide some indication of levels of investor confidence.

Year Total number of projects Number of renewals % of approvals from approved approved previous year that renewed 2006 495 367 85 2007 658 401 81 2008 778 541 82 2009 803 485 62 2010 842 554 69

Table 2.3: VIPA statistics on business approvals and renewals49

47 Ibid. 48 Data supplied by Mayline Melsul, Vanuatu Customs and Inland Revenue Department, 2 May 2013. 49 Statistics derived from Vanuatu Investment Promotion Authority, ‘Vanuatu Investment Promotion Authority FDI Annual Report 2010’ (2011) 5, 10. 73

There are many factors that may affect decisions to establish a new business or to continue an existing business venture, including political instability and global financial conditions. These statistics do not isolate the effect of the 2008 reform on investor confidence or the sustainability of existing businesses. The statistics in the table above do, however, suggest that between 2008 and 2009 there was a decline of 24.4% in the number of foreign investment businesses that sought VIPA renewals, with only 62% of foreign investment businesses that were approved in 2008 choosing to renew in 2009. This can be contrasted with renewal rates of over 80% between 2006 and 2008.

Political instability was noted by VIPA in 2010 to be ‘becoming more of a common practice’50 so did not have a particularly unique impact between 2008 and 2009. A report on the impact of the global economic crisis noted that ‘[o]f the other Pacific economies, only Vanuatu is expected to continue to do reasonably well. In 2008 Vanuatu’s real GDP increased by 6.3 per cent, slightly lower than the 6.8 per cent growth achieved in 2007. For 2009 the economy was forecast to expand by 4.0 percent, as compared to the forecast of a year earlier of 2.9 per cent.’51 This suggests that between 2008 and 2009 the Vanuatu economy was not strongly affected by the global economic crisis. Given that political instability and the global economic crisis did not have a particularly unique impact between 2008 and 2009 but the 2008 reform did, it is possible to infer that part of the drop in the number of businesses seeking renewals between 2008 and 2009 can be attributed to the 2008 reform.

REACTIONS TO THE 2008 REFORM

Print media provides the only lasting record of pubic reactions to the 2008 reform. The first notice the general public had about possible changes to the Employment Act [Cap 160] came either by listening to radio broadcasts of the Parliament session on 19 November or by reading the newspaper on Thursday 20 November. The newspaper reported that Minister for Internal Affairs, Hon. Patrick Crowby, had introduced the Employment (Amendment) Bill 2008 to Parliament for its first

50 Ibid, 9. 51 Ron Duncan and Carmen Voight-Graf ‘Pacific Labour Market Scenarios: Economic crisis, climate change and decent work’ (Background Paper, ILO Decent Work for Sustainable Development in the Pacific Tripartite High Level Meeting, Port Vila, Vanuatu, 8 – 9 February 2010) 9. 74

reading.52 That same day, following the second reading, the Bill was passed. The weekend headlines on the front pages of both newspapers indicated the negative reaction from the private sector, with the Vanuatu Daily Post’s headline reading ‘This Bill will cause large scale unemployment if gazetted’53 and the Vanuatu Independent’s headline reading ‘Businesses terminating employees “Does the Government know what it is doing?”’54 Letters to the editor that weekend also indicated concern for the impact of the 2008 reform on employees and the economy as a whole, with an example statement being that although ‘Yesterday’s new amendments to the Employment Act first look… [to be] a sweet deal for everyone’55, employees would end up suffering through job losses, and slowed job growth.56

Representations from the private sector to the government then began. On Sunday 23 November the Vanuatu Hotels and Resorts Association delivered a letter to the Prime Minister indicating that ‘some businesses would not survive and most will pull back on future investment.’57 On Monday 24 November the Vanuatu Chamber of Commerce and Industry (the Chamber of Commerce) called a public meeting, to be held that morning at its premises in Port Vila.58 Despite the short notice over 100 business owners attended. Concerns raised at that meeting included: the lack of consultation or prior notification; the timing of the reform, which came less than two months after a 30% increase in the minimum wage59 and in the midst of the global financial crisis; and the impact that the 2008 reform would have on businesses solvency and costs.60 A petition was circulated at the meeting (the employer petition). It was presented to the Prime Minister, Hon. , that

52 Royson Willie, ‘Employment Act changes gets opposition support’ Vanuatu Daily Post (Port Vila, Vanuatu) 20 November 2008, 1. 53 Marc Neil-Jones, “This Bill will cause large scale unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 1. 54 Bob Makin, ‘Businesses terminating employees “Does the Government know what it is doing?”’ ) Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008, 1. 55 S. ‘Letter to the editor’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008, 13. 56 Ibid. See also, John Salong, ‘ A matter of national importance’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008, 13, republished as John, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 24 November 2008, 5; Simon, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 6. 57 Marc Neil-Jones, ‘Natapei suspends Employment Bill for amendment’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 1. 58 ‘Chamber of Commerce calls urgent meeting of all business houses’ Vanuatu Daily Post (Port Vila, Vanuatu) 24 November 2008, 5. 59 Minimum Wages Order 2008; Minimum Wages Order 2005. 60 Details of the meetings are recorded in Marc Neil-Jones, ‘Natapei suspends Employment Bill for amendment’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 1, 2. 75

afternoon. Natapei received the delegation and advised that ‘the bill will not be gazetted and be suspended in its current form until a committee comprising the Ministers of Trade, Internal Affairs and Finance has held meetings with the private sector and agreement had been reached on amendments to the Bill.’61 Crowby, in his role as Minister for Internal Affairs, was also requested to ‘review the situation and take appropriate remedial action as soon as possible.’62 These comments suggested that government was prepared to reconsider the content of the 2008 reform. Media reports also directly challenged the claim by the Prime Minister’s Office that the 2008 reform was necessary ‘in order to comply with the ILO Conventions’,63 through partial examination of the content of Conventions that Vanuatu had ratified.64 Soon after the Minister for Finance, Hon. , acknowledged that the 2008 reform was passed with inadequate consultation.65

Letters to the editor and editorial comment primarily supported the view that the 2008 reform would damage private sector growth and employment opportunities, and be bad for employees in anything but the short term (as employees received severance payments).66 Some comments also challenged the competence of the government, in quite strong language:

Why lies between the ear of those who supported it? What sort of doctrinaire socialist ratbags are they taking advice from?67

61 Ibid, 1. 62 Marc Neil-Jones, ‘Govt says amendment “rushed”’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 1. 63 Marc Neil-Jones, ‘Govt says amendment “rushed”’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 1. 64 Ibid, 2. 65 ‘Employment Act may be revisited: Molisa’ Vanuatu Daily Post (Port Vila, Vanuatu) 28 November 2008, 1. 66 See, for example, Business Observer, ‘Letter to the editor’ Vanuatu Independent 21 December 2008, 14; Expat worried for the future of ni-Vanuatu, ‘Letter to the Editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5; Bob Lamont, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5; Zorba, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5; Dave Carman, ‘Letter to the Editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 7; Clarence Marae, ‘Letter to the Editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5; Simon Sez, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6; Napoleon Hill, ‘Letter to the Editor’ Vanuatu Independent (Port Vila, Vanuatu) 30 November 2008, 11; Jeffrey Branch, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 1 December 2008, 5. 67 Bob Lamont, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5. 76

The person/s who are behind this should be charged with conspiring to ruin the country with these irresponsible changes.68

This act will set the country back 30 years and will ensure that Vanuatu will be a third world country that is led by a group of politicians who have no idea of economic management… Vanuatu is on a course of self destruction created by its’ ill informed advisors…69

Perhaps Vanuatu should changes its name to the Republic of Last Minute and Self Inflicted Emergency… the Government has attempted to destroy our economy and the livelihood of the labour force completely by enacting a ludicrous amendment to the labour laws.70

Not all letters to the editor were negative towards the 2008 reform however, with some commentators pointing out the high cost of living and the inadequacy of the minimum wage.71 These letters were subtly racialised, with one being “signed” ‘a ni- Vanuatu Employee’,72 another arguing that ‘If an indigenous Ni-Van works for 10 years then his/her severance is less than 600,000 VT’,73 and a third linking the debate to the struggle for Independence and self-determination.74 The ‘inappropriate and disrespectful’75 tone of media reporting was also commented on.

On 4 December, in response to the Prime Minister’s request for action, detailed above, a meeting between the government, represented by Crowby and the Acting

68 Zorba, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5; 69 Dave Carman, ‘Letter to the Editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 7. Text as in the original. 70 Clarence Marae, ‘Letter to the Editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5. 71 A ni-Vanuatu Employee, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5; A Trade Union Member, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6; Dickinson Tevi, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 5. Whether there was considerably less pro-2008 reform editorial comment is a reflection of editorial decisions, lack of support for this position or other factors, such as lack of time for employees to organize a response is unknown. 72 A ni-Vanuatu Employee ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5. 73 A Trade Union Member, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6. 74 Dickinson Tevi, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 5. 75 A Trade Union Member, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6. 77

Director General for Internal Affairs, George Pakoasongi, and employers was held at the Chantilly’s Hotel Conference Room in Port Vila.76 Given some of the “disrespectful” commentary that had already occurred in the newspapers it is perhaps unsurprising that the tenor of this meeting, rather than being consultative, was somewhat combative.77 Even several weeks later Crowby recalled the combative tone of the meeting, ‘describing the meeting as “hot”. “I told them that the bill would remain as it was but that they were all allowed to submit their proposals to the Government.”’78

This meeting did little to ease concerns that consultations promised earlier by the Prime Minister would occur. A further flurry of newspaper content debating the 2008 reform arose. Much of the comment continued to oppose the Bill due to its likely impacts.79 The Vanuatu National Council of Women was specifically concerned about impact of changes to maternity leave on employment opportunities for women.80

Racialisation of the discourse, particularly in support of the 2008 reform, continued, but became more open. A cluster of reactions can be characterised as “anti-foreign- investor”. These responses took a position that the only people complaining are rich expatriates and foreign investors only concerned about profits81:

76 ‘Crowby to meet private sector over amendment’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 4. 77 Jane Joshua, ‘Crowby is not bowing down’ Vanuatu Daily Post (Port Vila, Vanuatu) 5 December 2008, 1; Marc Neil-Jones ‘Editorial: Rising anger of employers over Crowby stance’ Vanuatu Daily Post (Port Vila, Vanuatu) 10 December 2008, 4. 78 Len Garae, ‘Crowby asks Employers to wait for court ruling’ Vanuatu Daily Post (Port Vila, Vanuatu) 14 January 2009, 2. 79 Dave Carman, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 5; Worried employee, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 5; Port Vila citizen, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 5 December 2008, 5; Marc Neil-Jones, ‘Rising anger of employers over Crowby stance’ (Port Vila, Vanuatu) 10 December 2008, 4; Dinh Van Than, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 15 December 2008, 5; Grassroots and low income earner, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 23 December 2008; Valiant Leung, President of the Santo Chinese Association, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 23 December 2008, 6; Lora Lini, ‘Shipowners President warns Minister Crowby’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 December 2008, 3. 80‘Maternity leave pay change in Vanuatu stirs debate’ Vanuatu Independent (Port Vila, Vanuatu) 7 December 2008, 10. 81 Watchy Watchy, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 9 December 2008, 5. Ephraim Kalsakau, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 10 December 2008, 5; Tommy, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 12 December 2008, 5; Vira Hati, Grassroots, Ohlen, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 17 78

rich expatriate company owners are at long last worried that if the amendment is signed into law then they will lose their traditional practice of making millions on the sweat of the brows of the peanut-paid ni Van workers.82

We have been slaves for too long to make these so called investors rich in our country with our own money.83

This discourse supporting the 2008 reform also tied into a debate about the nature of Independence:

Colonialism blong kondominium i finis be niufala colonialism ikam84

In response, private sector businesses also tried to claim moral authority from the Independence movement, with the President of the Vanuatu Shipowners (sic) Association commenting:

“I, like others in similar circumstances, have inherited my business from my father, who built it through his sweat and I feel betrayed when the Government is not taking into account such consequences especially for indigenous businesses. I believe that this is not what was envisaged by our founding leaders such as former Vanuaaku Party leader who, with others, struggled for our country’s independence.”85

December 2008, 5; EEK Kalsakau, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 17 December 2008, 5. 82 Watchy Watchy, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 9 December 2008, 5. 83 Vira Hati, Grassroots, Ohlen, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 17 December 2008, 5. 84 “Colonialism from the Condominium has ended, but a new form of colonialism has come” (authors translation). EEK Kaslakau, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 17 December 2008, 5 85 Lora Lini, ‘Shipowners President warns Minister Crowby’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 December 2008, 3. All text as in the original. 79

By the end of 2008, despite the earlier assurance by the Prime Minister that a committee comprising the Ministers of Trade, Internal Affairs and Finance would be formed to hold meetings with the private sector reach agreement on amendments to the Bill86 little progress had been made. Unions called for tripartite dialogue to try to resolve the seeming impasse.87 The matter continued into January 2009, with the President refusing to sign the Bill due to concerns about constitutionality.88 Crowby then maintained that it was not possible to meet to review the Bill as the matter was before the Court.89 Despite this claim, a meeting between employers and the Ministers for Trade (Hon. James Bule), Finance (Hon. Sela Molisa) and Internal Affairs (Hon. Patrick Crowby) was held on 20 January 2009. Molisa indicated that a paper to reconsider the Bill was going to the Council of Ministers on Thursday 22 January.90 Both Molisa and Crowby also warned employers that terminating staff would be illegal.91 Following this meeting there was a small amount of comment in the media about the illegality of the government’s position that employees could not be terminated,92 and the bipartite, rather than tripartite nature of the meeting on 20 January.93 The Bill was referred by the President to the Supreme Court on 4 February 2009 on the grounds that it was unconstitutional94 and after that all public dialogue ceased.

REASONS FOR THE REFORM?

It is difficult to determine the actual motives of the government for introducing the Bill, or the motives of Parliament for passing it. There was no public consultation

86 Ibid, 1. 87 Royson Willie, ‘Trade unions prefer tripartite solution to Employment Act’ Vanuatu Daily Post (Port Vila, Vanuatu) 31 December 2008, 1. 88 Jane Joshua, ‘President refers new employment law for courts opinion’ Vanuatu Daily Post (Port Vila, Vanuatu) 6 January 2009, 3. 89 Len Garae, ‘Crowby explains why no review of bill’ Vanuatu Daily Post (Port Vila, Vanuatu) 10 January 200, 1; Len Garae, ‘Crowby says Employment law to help workers’ Vanuatu Daily Post (Port Vila, Vanuatu) 16 January 2009, 3. 90 Len Garae, ‘Govt will review 2 months severance: Employers told’ Vanuatu Daily Post (Port Vila, Vanuatu) 21 January 2009, 1. 91 Len Garae, ‘Employers warned against dismissing their employees’ Vanuatu Daily Post (Port Vila, Vanuatu) 21 January 2009, 2. 92 Hon. Moana Kalosil Carcasses (MP), ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 24 January 2009, 5; Dinh Van Than – VNP President, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 January 2009, 5. 93 Ephraim E K Kalsakau, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 31 January 2009, 5. 94 President v Speaker [2009] VUSC 35 http://www.paclii.org. 80

and discussion prior to the 2008 reform entering the parliamentary process. The explanatory note accompanying the Bill only listed the changes that the amendments would make, and did not provide any reasons for making those changes. There was also no public statement of the reasons for developing the Bill until after it had been passed. As this section progresses chronologically, the content of parliamentary debates surrounding the Bill will be considered first, before considering justifications that subsequently arose.

Whilst parliamentary records are available from the Ninth Legislature Second Ordinary Session 2008 12 November – 9 December 2008,95 these records are of limited assistance in determining the motivations of either the government or Parliament. Part of the reason for this may be that Hansard reports in Vanuatu takes the form of a summary of the proceedings rather than a transcription of debate. Further, it is presented in both English and French, meaning that what has actually been said often has to be translated from the original source language spoken, which is frequently Bislama. This means the Hansard may miss details of the debate that occurred.96 More significantly, Parliament spent very little time discussing the Bill, so there is little debate that is able to be analysed to identify motives.

The first reading of the Bill occurred on Wednesday 19 November 2008. That day Parliament commenced sitting at 2.35 pm and adjourned at 4.00 pm. In this short space of time two bills were considered. The Government (Amendment) Bill 2008 proceeded through the first reading, the committee stage (during which time amendments were made) and the second reading. In the same hour and a half, Parliament also commenced the first reading of the Employment (Amendment) Bill 2008.97 On 20 November the Employment (Amendment) Bill again returned to Parliament. Between 2.25 pm and 3.25 pm the first reading was completed, and the Bill then proceeded through the Committee stage and the second reading stage.98 Even accepting that the Hansard may miss details, the limited amount of time spent

95 Parliament of the Republic of Vanuatu, Ninth Legislature Second Ordinary Session 2008 17 November – 9 December 2008 Summarised Proceedings (undated). 96 The full audio recording for the Second Ordinary Session 2008 is not available. Personal communication with Evelyn Wokon, Vanuatu Parliament General Secretariat, 22 December 2010. 97 Parliament of the Republic of Vanuatu, above n 95, 3 – 7. 98 Ibid, 12 – 15. 81

in discussion of this Bill (approximately 1 ½ hours in total) means that there was very little opportunity for debate about the reasons for the Bill or its content.

The Hansard reads that ‘The Minister for Internal Affairs and Member for Port Vila The Hon. Patrick CROWBY Manarewo, introduced the Bill, stated the reason for the amendment but before moving that the Bill be read a first time, pointed out a typographic error in the French text…’99 Unfortunately the reason for the amendment that Crowby provided is not recorded in the Hansard.

Other than the Minister of Internal Affairs, only four other Members of Parliament spoke on 19 December. The Leader of the Opposition, Hon. raised concerns about enforcement of maternity leave and increases to severance and sick leave.100 In response, Crowby ‘clarified that a person on 6 months’ probation was indeed entitled to 21 days sick leave entitlement. He said that previously, he/she would be entitled to only twelve (12) days’.101 Both the Deputy Leader of the Opposition, Hon. and the Opposition Whip, Hon. Moana Carcasses, raised concerns about the impact on the private sector, with Carcasses specifically asking if there had been consultation with the private sector.102 In response Crowby made comments about the need for the Labour Department to ensure that the minimum wage was respected and ‘added that it was about time that certain provisions of the Employment Act be amended.’103 It can be observed that this response, as recorded in the Hansard, does not provide a reason for the 2008 reform. Nor does it address the questions raised by the Opposition.

The last Member of Parliament to speak was government back-bencher Hon. Harry Iaris. ‘He said that Ni-Vanuatu employees had been suffering silently for the last 25 years with a minimum wages (sic) which was considered very low indeed. He continued that the amendment would now reduce strikes and please the Workers’ Union. He concluded that it would be good to put the amendment to the test in order

99 Ibid, 6. 100 Ibid. 101 Ibid. It can be noted that Crowby’s statement as recorded in the Hansard was not a correct reflection of the state of the law as it was prior to amendment. 102 Ibid, 6 – 7. 103 Ibid, 7. 82

to find its impact on the society.’104 As the 2008 reform did not deal with minimum wages, and, as discussed in the introduction, strikes were not a major part of Vanuatu’s industrial relations landscape at the time, it is again hard to identify reasons for the reform from the statement, other than making workers happy. It can however, be observed that Iaris’s comments suggest that an analysis of the likely impacts of the law either had not been undertaken, or that this analysis was not widely known amongst government members.

On 20 November when the first reading continued more members of the Opposition spoke. Hon. Marcelino Pipite was generally congratulatory in respect of the Bill and made a comment about maternity leave, although it is not clear from the Hansard whether he supported the amendment, or was concerned about negative effects on the employment of women of child-bearing age. He also asked for clarification on sections 29(1) and 36(2).105 Hon. Alfred Carlot was similarly congratulatory but ‘stated that Parliament should look at the short and long term effect that the amendment would have.’106

Government members then spoke, with Hon. raising issues about maternity leave use by female public officers and enforcement of the law in the islands.107 The Hansard indicates that Crowby then responded to Loughman’s concerns. There is no indication that he directly responded to the points raised by Pipite and Carlot.108 Prime Minister Natapei then spoke, noting the concerns raised and acknowledging ‘that it was possible that the private sector would look into reducing the number of their employees as a result of this amendment.’109 Again these government comments do not indicate the motivation for introducing the Bill.

The Deputy Leader of the Opposition, Hon. Maxime Carlot Korman, suggested ‘that an amendment be made to Amendment 12 concerning the commencement date that it

104 Ibid. 105 The Hansard reads the Hon. PIPITE thanked the Minister concerned for tabling the Bill and said that it raised outstanding issues, particularly maternity leave that affected child bearing women. He continued that Ni-Vanuatu had suffered along (sic) time this it was rightly (sic) that the amendment be tabled. He sought clarification on the amendments to section (s)29(10) (sic) and s36(2).’ (Ibid, 12). 106 Ibid. 107 Ibid. 108 Ibid, 13. 109 Ibid. 83

should become effective as of January 1 2009 instead to prevent large payouts for long serving private officers.’110 In response Molisa, the Minsiter of Finance made the point that ‘since Vanuatu implemented International Labour Organization (ILO) laws regarding condition of workers, Vanuatu must ensure that workers receive their benefits.’111 Whilst ILO standards were used in Parliament as justification for the government’s creation of the Bill, and also, possibly, provided motivation for Parliament’s support of the Bill, there is no indication of which ILO standards Molisa was specifically referring to. Crowby also ‘insisted that the commencement date was proper as it stood’,112 although reasons for this position are not given, so again the Hansard does not help to isolate government motivations for introducing the Bill. Despite concern raised by senior Opposition members, the motion that the Bill be read the first time was carried unanimously and the Bill then progressed to Committee stage.

During the Committee stage there was some interesting debate on the severance amendments. The Hon. ‘questioned the criterion used regarding the “2 months”’.113 The reply from Crowby was ‘that it was only timely to amend the law to “2 months”’.114 The Hon. then ‘insisted that a date commencing 1 January 2009 must be stated’.115 Crowby insisted that the provision remain as it was. Molisa then agreed with Regenvanu ‘but explained that the change to the date could be done administratively by the Minister concerned’.116 There was no further debate, and the amendment was approved.117 The Bill then entered the second reading stage and the Hansard records that the Bill was passed unanimously.118

The parliamentary debate recorded in the Hansard is of limited help in establishing Parliament’s motives for passing the law. Both government and opposition members

110 Ibid. 111 Ibid. 112 Ibid. 113 Ibid, 14. 114 Ibid. 115 Ibid. 116 Ibid, 15. 117 It is not clear whether the approval was unanimous or on division, as paragraphs 68, 69 and 70 of the Hansard conflict, ibid. 118 Ibid. It can be noted that media reports indicated that at least 2 MPs abstained. (See, for example, Graham Crumb, ‘Just Desserts- Reprise’ (30 November 2008) http://scriptorum.imagicity.com/2008/11/30/just-desserts-reprise/ (Accessed 10 June 2015).) 84

acknowledged that the impacts of the law had not been assessed, that consultation had been limited, and that negative effects on employment were likely to occur. Both government and opposition members indicated that issues relating to enforcement of the employment law, rather than the content of the employment law were their concern. Concerns about the date from which increased severance allowance payments should take effect had been raised. Whilst this was potentially dealt with by recognising the Minister’s power to make regulations, the Minister who had the power to make regulations under section 77 of the Employment Act [Cap 160] was firmly against stating a commencement date for the increase in severance allowance. This meant that Parliament would have needed to amend the principal Act in order to be sure that a commencement date was provided, and it is not clear why this was not done.

As discussed above, several days after the 2008 reform had been passed by Parliament the employer petition was presented to the Prime Minister. This prompted public government statements of the reasons for the reform. The first statement, released by the Prime Minister’s Office, reads, in full:

In order to comply with the ILO Conventions, the amendment bill was quickly passed by Parliament following procedures but the reactionary feedback from stakeholders proves that there was no balanced consultation with stakeholders. On this basis the line Ministry (Internal Affairs) will be asked to review the situation and take appropriate remedial action as soon as possible.119

Whilst it was not explicitly stated, the reference to ILO standards aligns the 2008 reform to the government policy of promoting decent work, as outlined in chapter one.

The government was not, however, particularly committed to its justification of the 2008 reform. Once the content of ILO standards had been examined more closely

119 Marc Neil-Jones, ‘Govt says amendment “rushed”’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 1. 85

and this rationale was questioned in the media120 the government then “blamed” the 2008 reform on ILO consultants,121 although conversations with staff from the Suva ILO office and ILO staff based in Port Vila at the time indicate that ILO consultants had not been involved in the 2008 reform.

The next government statement, provided by the Ministry of Internal Affairs, was very much driven by a response to the employer petition. This stated, in full:

Perspective/Background Vanuatu Government and Workers’ Side 1. Changes have not been made to workers’ entitlements in Employment Act for 25 years. Workers’ perception is that employers have had it good for 25 years. 2. Most if not all Ni Vanuatu workers demand an increase/improvement in entitlements. Minister agrees so Labour Advisory Board meets Oct 2008. Where were the employer representatives at the LAB? 3. MIA prepares& submits paper to DCO. 4. DCO agrees and submits paper to COM. 5. COM agrees and submits amendment to Parliament. 6. About 50 or 96% of MPs in Parliament agree. 7. Trade Unions agree with the changes. Employers’ Perspective/Background and Some Facts 1. Over 5.000 employers registered with VNPF 2. 2.600 employers pay workers’ contributions to VNPF meaning nearly 50% don't pay, thus adding to the view that employers are ripping off workers. 3. As of Sept 2008, 15.851 workers paid contributions to VNPF and 5.000 of this number comes from Government and leaves 10.851 to the private sector.

120 Ibid, 3. 121 ‘Crowby to meet private sector over amendment’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 1. The 2008 reform was also interpreted more sinisterly by a media commentator as being ‘a deliberate attempt to sabotage the country’s economy and render Vanuatu more dependant (sic) on its benevolent neighbours.’ (Lora Lini, ‘Leadership Crisis?’ Vanuatu Daily Post (Port Vila, Vanuatu) 2 December 2008, 4.) 86

4. Employers who signed the letter of concern to PM on behalf of VCCI total 68 or l.3% of the total number of over 5.000 employers registered with VNPF. However if we were to take 2 .600 employers currently paying VNPF contributions this would make it 2.6%. Where are the other 97%? 5. The 68 employers who signed the petition to Govt employ about 3.229 of the 15.851 workers or just over 20% of all workers registered with VNPF. 6. If you were the GoV, whose views would you listen to? 1.3% of employers or the 98%? 7. If you were the GoV, whose view would you listen to the 68 employers who employ 20% or employers who represent the silent majority?122

Whilst this statement does not provide a clear policy rationale for the reforms, other than to meet worker demands, the government’s claim that ‘employers have had it good for 25 years… employers are ripping off workers’123 implies a perception that employers had been exploiting employees, and that law reform was needed to remedy this. This position is a reflection of the narrative of employment law that underpins the decent work agenda, as discussed in chapter one.

The lack of clear government commitment to its stated policy rationale of enhancing conformity to international labour standards fueled public suspicions that the 2008 reform was driven by internal political motives. These suspicions have their roots in the disillusionment with Parliament and government, outlined in chapter one, that exists in Vanuatu. In 2008, following the national election of 2 September, the government was very unstable. It took a long time to form a coalition, with Natapei eventually receiving 27 out of 52 votes to become Prime Minister on 22 September. His initial cabinet contained representatives from five political parties but this changed when he reshuffled cabinet in order to defeat a motion of no confidence on 3

122 Untitled document presented by Acting Director General of Internal Affairs, George Pakoasongi, to employers at meeting regarding the Employment (Amendment) Bill 2008, Chantilly’s Hotel, Port Vila, 4 December 2008 (Unpublished, Undated). Circulated by email by the General Manager of the Vanuatu Chamber of Commerce, John Aruhuri, 8 December 2010. The text is as it appears in the original. 123 Ibid. 87

October. By the time of the first reading of the Employment (Amendment) Bill 2008 on 19 November there had been a number of other rumours of motions that never got as far as a parliamentary vote. On 26 November, six days after the vote of the Employment (Amendment) Bill 2008, Natapei survived his second vote of no confidence.124 Such a situation is an archetypal illustration of the “horse-trading”, discussed in chapter one, that can plague Vanuatu politics and result in ‘the attention of members of parliament [being diverted] from their institutional roles as law makers, overseers of government, and representatives.’125

A number of commentators also attributed the 2008 reform to incompetence by the Parliament, as they failed to take into account the impact that the 2008 reform would have on the private sector employment environment before passing the law.126 This suspected motive relates to the socio-political environment in which Parliament operates, discussed in chapter one. This discussion in chapter one identified a number of barriers to parliamentary debate on Bills, including: the lack of a political culture which places expectations on parliamentarians to present Bills to constituents for feedback and then represent those views in Parliament; the reluctance of political parties to debate contentious legislation in order to avoid weakening fragile coalitions; inexperience of members; lack of technical capacity or support; and the diversion of parliamentarians’ attention to internal political manoeuvring. This gives rise to a perception that Parliament is generally not competent in carrying out its function of scrutinising Bills, but instead ‘rubber stamps presented legislation’.127 The Hansard reveals lack of debate on the Employment (Amendment) Bill, and very rapid passage of the Bill, despite concerns about its potential impacts being raised. As such it supports the broader perception, that the Vanuatu Parliament has limited competence as a body that effectively scrutinises laws before they are made.

124 For an overview of this period see Howard Van Trease, ‘Vanuatu Political Review 2009’ (2010) 22(2) The Contemporary Pacific 467, 468 – 469. 125 Michael G Morgan, ‘Political fragmentation and the policy environment in Vanuatu, 1980–2004’ (2004) 19(3) Pacific Economic Bulletin 40, 45. 126 Simon, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 6; Dave Carman, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 5; Simon Sez, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6; Clarence Marae, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 5. 127 Tess Newton Cain,and Anita Jowitt, Vanuatu National Integrity Systems Country Study (2004), 24. 88

Interestingly, an attempt was made by the opposition to overturn the Employment (Amendment) Act 2008. On 26 November, 2 days after the employer petition had been presented, and the day after a motion of no confidence in the Prime Minister had been defeated, Regenvanu introduced the Private Bill for the Employment (Amendment) Act 2008.128 This Bill would have reduced working hours to 40 hours per week and reduced severance allowance payment to 1 month per year.129 The motion that the Bill be read a first time was defeated 25 votes against and 18 votes in favour,130 which indicates that at least some opposition Members of Parliament changed their position on the Bill after further reflection.

THE CONSTITUTIONAL CHALLENGE

The President of Vanuatu referred the Employment (Amendment) Bill 2008 to the Supreme Court pursuant to Article 16(4) of the Constitution, which provides:

If the President considers that the bill is inconsistent with a provision of the Constitution he shall refer it to the Supreme Court for its opinion. The bill shall not be promulgated if the Supreme Court considers it inconsistent with a provision of the Constitution.

The only ground the President provided for the referral was that the provisions in the Act relating to increases in the amount of annual leave, payment during maternity leave, eligibility for severance allowance and the amount of severance allowance were inconsistent with Article 16(1) of the Constitution which provides that ‘Parliament may make laws for the peace, order and good government of Vanuatu.’ The reasons provided for the referral were that:

(1) ‘In certain situations such as for this bill which dramatically changes the law… there [must] be prior meaningful consultations with appropriate stakeholders’ and such consultations were lacking131 (2) The bill would contribute to increased unemployment and disorder

128 Parliament of the Republic of Vanuatu, above n 97, 33. 129 Ibid, 33 – 34. 130 Ibid, 34. 131 President v Speaker [2009] VUSC 35 http://www.paclii.org. 89

(3) The bill cannot be considered to be ‘for the “good government” of Vanuatu… [because the] business[es] which will be mostly affected are Ni-Vanuatu owned’132

The Attorney General (representing the Speaker of Parliament) submitted that the powers granted by Article 16(1) of the Constitution are not subject to any duty of consultation, that the requirement that Parliament makes laws “for the peace, order and good government of Vanuatu” does not limit legislative power and that the practical consequences of the Bill are not relevant to any consideration of the constitutionality of the Bill.

The Supreme Court agreed with the submissions of the Attorney General, in making its decision on 19 May 2009.133 Although the reasons for the decision were not discussed extensively in the judgment, previous authorities that were applied were listed. From these it can be gathered that the court adopted the reasoning of previous authorities that:

In the course of interpreting the Constitutionality of… Bills, there is no question of entering into an inquiry as to whether or not the proposed Acts are in fact “for the peace order and good government of Vanuatu,” that must be a question in the sole discretion of Parliament. The sole question for determination of the Court is does the proposed Act (the Bills) or any parts thereof offend the Constitution, and if so, in respect of which Article and to what extent.134

The Court held that determining whether law is, in fact, for the peace, order or good government of Vanuatu is essentially a political issue and that the court’s mandate is only ‘to make determinations that beckon (sic) the compliance of Parliament and the President [with the Constitution] to matters of law only and not policy considerations

132 Ibid. The full text of all three grounds of the referral is reproduced in the judgment. 133 Although the decision occurred in May the date of the Presidential assent was recorded as being 8 June 2009 (Gazette 35 of 2009, 26 Oct 2009). 134 In re the Constitution, Timakata v Attorney-General [1992] VUSC 9 http://www.paclii.org. 90

that are relevant only to the attention of Parliament.’135 Further, the Court held that, whilst it does have a legitimate role in ensuring that the rules laid down by the Constitution and parliamentary process are adhered to, it ‘does not have jurisdiction to enquire into what has been described as “intra-mural deliberative activities of the Parliament” or the intermediate procedures of Parliament.’136 In particular ‘the Court is not free to invent implied prohibitions upon the exercise of Legislative power.’137 As such the Supreme Court was unable to find an implied duty to consult with stakeholders even if the consequences of a proposed Act were far reaching. Last the Court observed that earlier authorities have recognised that although Parliament can abuse its powers, this is a political issue with a corresponding political response; voters are always able to choose to elect other representatives:

when making laws for “... the good Government of Vanuatu”, Parliament may commit possible abuse of powers. However, that possible abuse of powers is no reason in Vanuatu law for limiting the language of a legislative power contained in the Constitution. It has to be understood that the extravagant use of legislative power presented a political issue, which required a political response: as long as it was within power, it could not be invalidated by the Court. This means that if the representatives of the people of Vanuatu (Members of Parliament) in Parliament use their national powers to pass laws against the interests of the people of Vanuatu considered as such, it is within the power of the people themselves to recent (sic) and reverse what may be done.138

CURRENT STATE OF THE LAW: THE 2009 REFORM

On June 8 2009 the President assented to the 2008 reform. Ultimately, however, the Employment (Amendment) Act 2008 never came into force in its entirety. Instead the gazetting of the 2008 law was delayed to consider the issues further. As discussed

135 In re the President's Referral, President of the Republic of Vanuatu v Speaker of Parliament [2000] VUSC 43 http://www.paclii.org. 136 In re the President's Referral, President of the Republic of Vanuatu v Attorney-General [1998] VUSC 18 http://www.paclii.org. 137 Virelala v Ombudsman [1997] VUSC 35 http://www.paclii.org. 138 Virelala v Ombudsman [1997] VUSC 35 http://www.paclii.org affirmed in In re the President's Referral, President of the Republic of Vanuatu v Attorney-General [1998] VUSC 18 http://www.paclii.org. 91

above the employer petition resulted in Prime Minister Natapei suspending the Bill until a government committee met with the private sector and reached agreement on amendments. It can be observed that although some meetings were held, there was no public discussion of the text of any further Employment (Amendment) Bill.

In October 2009 Parliament passed the Employment (Amendment) Bill 2009 (the 2009 reform) which was assented to by the President on 19 October. Both the 2008 reform and the 2009 reform were gazetted on 26 October 2009, with the effect being that though the 2008 reform was momentarily commenced, it was immediately amended by the 2009 reform. The primary focus of the 2009 reform was to ameliorate the burden to employers in the areas of annual leave, maternity leave and severance payment, whilst still providing some increases for employees. The 2009 reform provided that employees who had worked less than 7 years were entitled to 1.25 days paid annual leave per month (or 15 days paid annual leave per year). Employees who had worked for 7 – 19 years were entitled to 1.75 days paid annual leave per month (or 21 days paid annual leave per year).139 The increase in leave for people who had worked for 20 – 24 years that was provided under the 2008 reform was not changed.

The payment during maternity leave was reduced to 66% of the employee’s regular salary.140 A clear limit was also placed on the number of months for which a woman could claim the nursing allowance,141 although the increase to the amount of nursing time per day that was provided under the 2008 reform was not altered.

The amount of severance allowance was doubled, rather than quadrupled.142 The period of work before an employee becomes eligible for severance allowance in the event that the employee resigns increased from 1 year of employment to 6 years of employment.143

139 Item 1 of the Schedule to the Employment (Amendment) Act 2009. 140 Item 4 of the Schedule to the Employment (Amendment) Act 2009. 141 Item 6 of the Schedule to the Employment (Amendment) Act 2009. 142 Item 8 of the Schedule to the Employment (Amendment) Act 2009. 143 Item 7 of the Schedule to the Employment (Amendment) Act 2009. 92

The uncontroversial changes relating to sick leave and termination by notice were left unchanged.

Area Pre 2008 law 2008 reform 2009 reform Severance: 2 weeks salary per year 2 months salary per year 1 months salary per year amount worked worked worked

Severance: Employee must have Employee must have Employee must have eligibility in the worked 10 years worked 1 year worked 6 years event that the employee resigns Annual leave: 1 – 19 years: 12 1 – 19 years: 21 1 – 6 years: 15 days/year amount (on 100% days/year days/year 7 – 19 years: 21 salary) days/year 20 – 24 years: 24 20 – 24 years: 36 20 – 24 years: 36 days/year days/year days/year 25 – 29 years: 48 25 – 29 years: 48 25 – 29 years: 48 days/year days/year days/year 30 + years: 72 days/year 30 + years: 72 days/year 30 + years: 72 days/year Maternity: 50% of salary for up to 100% of salary for up to 66% of salary for up to payment 12 weeks 12 weeks 12 weeks Nursing leave: ½ hour twice per day on 1 hour twice per day on 1 hour twice per day on amount 100% salary 100% salary 100% salary for up to 24 months Sick leave: 12 months continuous 6 months continuous 6 months continuous eligibility employment employment employment Notice: if No statutory regulation – If employee fails to give If employee fails to give employee leaves could be liable for notice employer can notice employer can without giving common law damages deduct salary that would deduct salary that would notice for breach of contract have been paid during have been paid during the notice period from the notice period from the final payment to the the final payment to the employee employee

Table 2.4: Summary of changes to the Employment Act [Cap 160] by the 2008 reform and the 2009 reform

The impact of the changes on productive labour costs brought about by the 2009 reform can be seen in the table below. This table uses the scenarios discussed earlier, which involve an employee working 5 days per week and earning 1000 vatu in direct wages per day who has been in employment for more than one year. In summary, the 2009 reforms increased productive labour costs from pre-reform levels. However, the size of this increase was, in all instances, smaller than the increase would have been had the 2008 reform been brought into force introducing increased labor costs of between 5% – 18% depending on the scenario, as compared to the increases of between 16% - 45% proposed by the 2008 reform.

93

Direct wage Actual labour Actual labour Actual labour paid per day cost per day of cost per day of cost per day of productive productive productive labour, pre 2008 labour, 2008 labour, 2009 reform reform reform Employee employed less than 7 years. VNPF, Annual leave, 144 severance and maximum sick 1000 1240 1442 1305 leave paid. No maternity leave.

Employee employed less than 7 (Cost in years (Cost in years 145(Cost in years. VNPF, Annual leave, 1428 1987 1589 1000 that maternity leave is that maternity leave is years that maternity severance and maximum sick taken) taken) leave is taken) leave paid. Maternity leave paid. Employee employed 7 – 19 years. VNPF, Annual leave, severance 1000 1240 1448 1341146 and maximum sick leave paid. No maternity leave. Employee employed 7 – 19 years. 1428(Cost in years 1990(Cost in years 1642147(Cost in VNPF, Annual leave, severance 1000 that maternity leave is that maternity leave is years that maternity and maximum sick leave paid. taken) taken) leave is taken) Maternity leave paid. Employee employed 20 - 24 years. VNPF, Annual leave, severance 1000 1309 1549 1440148 and maximum sick leave paid. No maternity leave. Employee employed 20 – 24 years. 1521(Cost in years 2199(Cost in years 1794149(Cost in VNPF, Annual leave, severance 1000 that maternity leave is that maternity leave is years that maternity and maximum sick leave paid. taken) taken) leave is taken) Maternity leave paid.

Table 2.5: Summary of impacts on labour costs of the pre-2008 law, the 2008 reform and the 2009 reform

144 260,000 direct wage + 10,400 VNPF contribution + 22,000 severance allowance = an annual payment of 292,400 vatu. Wages per each productive day of work are: 292,400/ (260 - (21 days sick leave + 15 days annual leave)) = 1305. 145 260,000 direct wage + 10,400 VNPF contribution + 22,000 severance allowance = an annual payment of 292,400 vatu. Wages per each productive day of work are: 292,400/ (260 - (21 days sick leave + 15 days annual leave + (.66 x 60)) = 1589. 146 260,000 direct wage + 10,400 VNPF contribution + 22,000 severance allowance = an annual payment of 292,400 vatu. Wages per each productive day of work are: 292,400/ (260 - (21 days sick leave + 21 days annual leave)) = 1341. 147 260,000 direct wage + 10,400 VNPF contribution + 22,000 severance allowance = an annual payment of 292,400 vatu. Wages per each productive day of work are: 292,400/ (260 - (21 days sick leave + 21 days annual leave + (.66 x 60))) = 1642. 148 260,000 direct wage + 10,400 VNPF contribution + 22,000 severance allowance = an annual payment of 292,400 vatu. Wages per each productive day of work are: 292,400/ (260 - (21 days sick leave + 36 days annual leave)) = 1440. 149 260,000 direct wage + 10,400 VNPF contribution + 22,000 severance allowance = an annual payment of 292,400 vatu. Wages per each productive day of work are: 292,400/ (260 - (21 days sick leave + 36 days annual leave + (.66 x 60))) = 1794. 94

CONCLUSION

This purpose of this chapter was to provide an overview of the 2008 reform, the public reaction to it and perceptions of what drove the reform, in order to clarify analytical questions about its content.

Whilst only limited data on the impacts of the 2008 reform on levels of employment is available, and no data at all on its impact on wage rates, the chapter has argued that that both the 2008 and 2009 reforms had (or would have had) considerable impacts on productive labour costs. It has also shown that employment levels, as measured both by the number of employees contributing to VNPF and self-reported numbers of employees on business license applications, dropped. Again data on the impact of the 2008 reform on the solvency of companies or on investor confidence is not available. This chapter has, however, shown that between 2008 and 2009 there was a considerable decrease (24.4%) in the number of foreign investment businesses that sought to renew their approval to operate. The public reaction, as reported in the media, was dominated by concerns about the impact the 2008 reform would have on labour costs, employment levels and business confidence, although there was a countering discourse that was motivated by concerns about costs of living for workers and concerns about exploitation by (primarily foreign) investors.

Whilst the lack of prior public discussion or documented parliamentary discussion makes it difficult to establish what motivated the 2008 reform, this chapter argues that the government’s stated rationale both in parliamentary debates and in the media (once public objections began to be raised), was that changes were necessary in order to comply with ILO standards. This links to the broader government policy agenda of increasing decent work opportunities by improving conditions of work. The local reaction to this stated rationale has also been discussed. Public debate questioned the validity or honesty of the government’s rationale and instead speculated that the 2008 reform was driven by political motives and/or was the product of a government that, by failing to take into account the impact that the 2008 reform would have on the private sector employment environment, was either irresponsible or incompetent.

95

The public reaction does not, however, provide “proof” that the 2008 reform was not well thought out.

This discussion leads to my next point of analysis. If it can be shown that Vanuatu’s law prior to the 2008 reform did not adequately protect employees’ rights as contained within ILO standards then, despite the fact that the 2008 reform increased costs for employers, the 2008 reform cannot simply be dismissed as the action of an irresponsible government. Rather, analysis may show that the 2008 reforms were, in fact, achieving stated policy objectives relating to increasing decent work opportunities by improving conditions of work. The next chapter explores the extent to which the 2008 reform aligned with this stated government policy.

96

CHAPTER 3 ‘DOES THE GOVERNMENT KNOW WHAT IT IS DOING?’1 ASSESSING THE 2008 REFORM

INTRODUCTION

Whilst chapter two established that the 2008 reform would impact upon labour costs and was unpopular with employers, it does not necessarily follow that the 2008 reform was “bad law”. As discussed in the previous chapter, the government’s stated rationale was that the 2008 reform was necessary in order to comply with ILO standards. This, it is suggested, links to the broader government policy agenda of increasing decent work opportunities by improving conditions of work. Although public debate questioned the validity or honesty of the government’s rationale, and parliamentary debate on the reform was limited, neither the public reaction nor the lack of debate in Parliament provide “proof” that the 2008 reform was not well thought out or that Parliament was irresponsible in passing the law. In the absence of any government policy papers explaining or justifying the 2008 reform, however, further analysis of the 2008 reform is needed in order to determine the extent to which it can be justified as advancing the policy goals it references.

This leads to the preliminary question of how parliamentarians should justify their decisions. As discussed in chapter one, Vanuatu’s Constitution establishes a modern nation state. The modern nation state is built upon a complex network of written and unwritten standards including an expectation that ‘the powers [parliamentarians] have must be exercised reasonably, proportionately and rationally’.2 and that elected representatives have a ‘duty to account for their actions through explanation and justification.’3 In an informal sense this requires that decisions will be ‘deliberative and consistent. The decision maker has thought about what he or she will do and can

1 Front page headline, Vanuatu Independent 29 November 2008 (Bob Makin, ‘Businesses terminating employees “Does the Government know what it is doing?”’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008 1. 2 DJ Galligan, Law in Modern Society (2007) 131. 3 Ibid. 97

give a reasoned justification for the choice.’4 Another aspect of reasoned justification involves ‘conscious reflection about the probable consequences of action.’5 This, in turn, relates to ‘the core of policy evaluation’6: impact analysis. The most common method is cost-benefit analysis and micro- or macro-economic analysis to determine both actual or predicted costs and benefits.7 Target oriented policy evaluation or impact analysis considers both impacts on ‘immediate prespecified programme objectives… [and] broadly defined policy goals or targets.’8 In a modern nation state it can be assumed that law-makers will consider an impact analysis of proposed laws on both narrow and broad policy goals as part of their process in deciding whether to support a law.

This chapter provides an impact analysis of the extent to which the controversial changes to annual leave, maternity protection and severance allowance made pursuant to the 2008 reform can be justified as achieving stated policy goals in order to determine whether it can be said that the government acted responsibly in passing the 2008 reform.

The narrow policy concern of the government was that Vanuatu’s law prior to the 2008 reform did not comply with ILO standards. This policy concern assumes that Vanuatu’s laws did not already comply with ILO standards. Analysing the impact of the 2008 reform on this narrow policy concern gives rise to two questions:

1. Did the pre-2008 reform law conform to ILO standards?; 2. If not, did the 2008 reform improve conformity with ILO standards?;

It can be observed that, whilst the Vanuatu government used the language of compliance, my questions instead use the language of conformity. This is because

4 Thomas Ulen, ‘Rational Choice Theory in Law and Economics’ in Boudewijn Bouckaert and Gerrit De Geest (eds) Encyclopedia of Law and Economics (2000) 790, 791. 5 Sung Ho Kim, ‘Max Weber’ in Edward N Zalta (ed),The Stanford Encyclopedia of Philosophy (Fall 2008 Edition) http://plato.stanford.edu/archives/fall2008/entries/weber (Accessed 10 September 2011). 6 Gunther Schmidt, Jacqueline O’Reilly and Klaus Schomann, ‘Theory and Methodology of Labour Market Policy and Evaluation: An Introduction’ in Gunther Schmid et at (eds), International Handbook of Labour Market Policy and Evaluation (1997) 1, 2. 7 Ibid, 8 Ibid, 4 – 5. 98

compliance becomes a specific issue only if a country has a ratified a Convention, and in all instances discussed below Vanuatu had not ratified relevant Conventions. To talk about compliance is therefore slightly inaccurate and more precisely becomes a policy goal of increasing conformity to ILO standards, in the absence of ratification.

In addition to whether the 2008 reform did increase conformity with ILO standards, the impact of the reform on more broadly defined policy goals must be considered. Chapter 2 has argued that an implicit policy motivator was the government’s desire to increase decent work opportunities. As chapter one discusses, in addition to the policy of promoting decent employment opportunities the Vanuatu government is committed to economic policy that is driven by private sector development and employment creation. The need to analyse the 2008 reform in respect of its impact on broader policy objectives gives rise to two further questions:

3. What impact would the 2008 reform have had on the broader policy objective of promotion of decent employment opportunities? 4. What impact would the 2008 reform have had on the broader policy objective of private sector development and employment creation?

Assessing the first two questions (whether Vanuatu’s laws, either prior to or under the 2008 reform, comply with ILO standards) appears to be a fairly straightforward task which involves identifying the relevant Conventions and Recommendations which provide standards and then comparing them to the content of Vanuatu’s laws. There are, however, some complications which make determination of conformity difficult. First, ILO Conventions do not always contain clearly identifiable standards. Instead they may provide broad guidelines to be used by individual countries to develop context-specific laws. The precise application of international standards therefore varies from country to country and the question of precisely how the Conventions should apply in Vanuatu remains. Second, several ILO Conventions, with competing standards, may exist in a single area. This is less of a problem when a country has ratified a particular Convention, as it is then bound by one set of particular standards. However, when a country has not ratified any Conventions, so has not voluntarily chosen to become bound by those international standards, the

99

issue of which competing standards best apply to the country’s socio-economic context is then raised. Third, some ILO Conventions only have low ratification levels, which may indicate low levels of acceptance for the standards they contain, at least when it comes to actually applying them within domestic law, rather than stating them as an ideal. These last two points may undermine the extent to which ILO Conventions can be considered to clearly prescribe internationally recognised standards, and makes it difficult to identify what international labour standards are in the event that Vanuatu has not ratified any relevant Conventions. The discussion takes these complications into account.

Assessment of the third question proceeds by using micro-level analysis that assumes employers aim to maximise profits9 and will therefore manipulate the law and restructure some employment relationships in order to minimise or avoid cost increases. This analysis enables likely impact of the 2008 reform in relation to promotion of decent employment opportunities to be identified.

The final question derives from economic policy which maintains that foreign investment is a driver of private sector development and that (profit maximizing) foreign investors will be attracted to low cost environments.10 McGavin illustrates how this economic policy position is believed to affect employment law. He observed, when analysing the likely impact of (pre-2008 reform) labour laws in Vanuatu, that the:

legislative provisions of the Employment Act of 1983 for termination of employment, sick leave, annual leave etc reflect – or often exceed – employment conditions in industrial nations and seem inappropriate to the conditions of Vanuatu. Their impact is to inhibit job growth and/or increase non-compliance… [T]his regulatory environment seems unrelated to creating

9 This assumption is based upon neoclassical economic theory, as discussed in chapter one. Broadly defined, ‘neoclassical economics is an analysis that focuses on the optimizing behavior of fully rational and well-informed individuals’ (David Colander, Ric Holt and Barkley Rosse, ‘The Changing Face of Mainstream Economics’ (Discussion Paper 03-27, Middlebury College Economics Discussion Paper Series, 2003) 5). As discussed in chapter one, neoclassical economic theory is the basis for Vanuatu’s economic policy. Analysis of social policy impacts using economic theory that underpins economic policy helps to relate social policy to economic policy. 10 This concept was discussed in chapter one, n 205 and related text. 100

conditions for improved development and use of labour resources – and is thus counterproductive to enhancing the utilisation of labour resources.11

The assessment of the impact of the 2008 reform on private sector development therefore considers how the 2008 reform compares with employment regulation in other Pacific island countries that may be “competitors” for foreign investment.

Structure

For each of the three areas being considered (annual leave, maternity protection and severance allowance) discussion is divided into two sections. First, the narrow policy objective of increasing conformity to ILO standards is addressed. The discussion begins by considering the specific parts of the law that were changed law by the 2008 reform. It considers whether the law prior to the 2008 reform conformed to the international labour standards and whether the 2008 reform brought the law into conformity with those standards. The discussion then considers further issues of non- conformity with international labour standards in the general subject areas of annual leave, maternity leave and severance allowance that the 2008 reform could, and maybe should, have also considered. This is done because if reforms are being undertaken in order to increase conformity to international labour standards it is reasonable to expect that all of the provisions of international labour standards related to those subjects are considered (even if some reforms are rejected).

Second, the broader policy questions are considered. The benefits gained from the 2008 reform in respect of achieving stated government policy are weighed against the costs of the 2008 reform on stated government policy. The results of cost-benefit analysis may not provide a clear answer as to whether the 2008 reform can be justified as achieving specific policy goals, as it necessarily involves judging trade- offs between different policy goals.. Further, benefits to one group may result in costs to another group. Public accountability involves making decisions ‘that can be explained and defended by arguments acceptable to a reasonable audience.’12 Rawls posits that citizens, acting in exercise of public reason, should divorce their

11 Paul McGavin, Labour resource utilisation in Melanesia (1997) 54. 12 A Seidman and R Seidman, State and Law in the Development Process (1994) 58. 101

assessment of policies or policy justifications from their social situation and interests. This then enables them to reason rationally.13 Disproportion between benefits to the already advantaged and costs to already vulnerable groups would suggest that the Rawlsian ideal of the exercise of public reason is not being met.

ANNUAL LEAVE

Prior to 2008 employees who were in continuous employment for more than 1 year were entitled to annual leave on full pay at a rate of 1 day per month worked.14 Under the 2008 reform this leave amount increased to ‘2 working days after 20 years, 4 working days after 25 years and to 6 working days after 30 years of service in the same undertaking, whether continuous or not’,15 although increased leave due to seniority did not apply to agricultural workers.16 Continuous employment has been defined by the court to mean working 22 days per month,17 although in practice many employers adopt the less restrictive approach to eligibility and provide annual leave to regular full time employees.18

If an employee’s employment is terminated by the employer before working for a full year he or she is entitled to be paid one day’s salary for each month of employment.19 If an employee resigns before having worked for a full year then he or she is only entitled to have annual leave “paid out” if he or she has worked for more than 6 months.20

13 John Rawls, ‘The Idea of Public Reason Revisited’ (1997) 64(3) University of Chicago Law Review 765, 800. 14 Section 29(1) Employment Act [Cap 160]. 15 Section 29(2) Employment Act [Cap 160]. 16 Section 29(3) Employment Act [Cap 160]. 17 Daniel v Nguyen Huu Hong [2004] VUSC 40 http://www.paclii.org. If interpreted strictly the decision does lead to some absurdity as it means that only employees whose pay is calculated by the hour or day and who work 6 days per week are entitled to 12 days of paid annual leave each year. To illustrate, if we use 2011 as an example year, an employee who works 5 days per week from Monday to Friday works for less than 22 days in the months of January, February, April, July and October. Further, there is no mention in statute or as to whether days not worked due to public holidays count for the purposes of calculating the 22 days worked each month 18 Section 54(2)(a) of the Employment Act [Cap 160] defines continuous employment as working 4 or more days per week. This definition is used to determine eligibility for severance allowance, but in practice is also used by employers to determine eligibility for annual leave. 19 Section 32 Employment Act [Cap 160]. 20 Ibid. In both of these instances a daily or hourly paid employee only earns an annual leave entitlement in the months that he or she worked for more than 22 days. 102

Leave is intended to be taken in not more than two separate periods annually,21 at a time set by the employer which should, as far as possible, comply with the employee’s wishes.22 There is, however, no explicit requirement that a certain amount of annual leave be used each year and it has been held that unused leave accumulates indefinitely, with the accumulated unused leave to be “paid out” on termination of employment.23

The only thing that the 2008 reform changed in respect of annual leave was the total rate of accrual of paid annual leave, increasing the “starting level” of annual leave by 75%. As discussed in chapter two this increased the productive labour cost by 3.8% over the pre-2008 reform costs.24 The changes are shown in the textbox below.

S 29(1) Every employer shall grant an employee who has been in continuous employment with him for 12 consecutive months annual leave on full pay at the rate of 1 1.75 working day for each month of employment.

(2) The rate of the annual leave provided for in subsection (1) shall be increased to 2 3 working days after 20 years, 4 working days after 25 years and to 6 working days after 30 years service in the same undertaking…

Textbox 3.1: Changes to annual leave provisions in the Employment Act [Cap 160] pursuant to the 2008 reform

Did the reform increase conformity to international labour standards?

The Holidays with Pay Convention (Revised) 1970 (Convention 132), which was in force in 36 countries as of October 2012, is the most recent general international standard on annual leave entitlements. This Convention requires that all employees except for seafarers, who are covered by their own, occupation specific, standards, be provided with a minimum of 3 working weeks paid annual leave per year. The earlier

21 Section 30(1) Employment Act [Cap 160]. 22 Section 30(3) Employment Act [Cap 160]. 23 Samson v Tailleur [1988] VUMC 2 http://www.paclii.org. 24 Chapter two used a scenario which provides that the employee has 260 paid work days (52 weeks x 5 days per week) in a year and receives 1000 vatu per day worked. Ignoring other direct and indirect wage costs, when the employee is entitled to 12 days paid annual leave per year the cost of the labour input in relation to the number of days worked (the productive labour cost) is 1048 vatu per day. When the employee is entitled to 21 days paid annual leave per year the productive labour cost is 1088 vatu per day. 103

Holidays with Pay Convention 1936 (Convention 52), which is no longer open for ratification but has not been shelved, provides for 6 working days leave per year but also requires that leave be increased with the length of service. This Convention was in force in 39 countries as of October 2012. Vanuatu has not ratified either Convention so is not bound to follow the text of either. (The third Convention in this area, the Holidays with Pay (Agriculture) Convention 1952 (Convention 101) does not provide any specific standard as to the amount of leave and is not discussed further in this section.) Whilst Conventions 52 and 132 both contain clear standards as to the amount of leave that should be provided, they are competing standards. Both are fairly equal in terms of ratification levels, so this does not provide a clear indicator as to the preferred international standard.

Prior to the 2008 reform the annual leave amounts provided by Vanuatu’s laws were in conformity with Convention 52. If one accepts that Convention 52 provides an appropriate level of leave then the stated rationale for the 2008 reform has no factual basis. However, the amount of leave provided was less than that required by Convention 132, at least for the first 20 years of employment. The increase to the “starting level” of leave both in the 2008 reform, which took the starting level to 21 days, did bring Vanuatu’s law into conformity with this aspect of Convention 132. If one accepts that Convention 132 provides the best standards as to the length of annual leave, then the 2008 reform to annual leave does align with the policy of promoting decent work opportunities by increasing conformity to international labour standards. Whilst the government’s stated rationale for increasing the amount of annual leave is, therefore, contestable, it is not clearly false.

The reform focused only on payment whilst on annual leave. International labour standards on this subject are, however, broader in their scope. One aspect of the existing law that has come to court is the question of the extent to which unused leave accumulates. This matter is dealt with in Convention 132 by requiring all annual leave to be taken within a set period of it being earned.25 A comprehensive

25 Article 9 of Convention 132 requires that a minimum period of uninterrupted leave be taken within 12 months of the years in which it was earned. All other leave be taken within 18 months of the year in which it was earned, although this time period can be extended with the consent of the employee. Whilst Convention 132 also provides that all unpaid leave is to be “paid out” on termination (Article 11) so employees who have not taken leave do not lose this benefit, Convention 132 also provides that 104

reform of annual leave could have clarified the government’s position on conformity to this international labour standard, either by choosing to follow the international labour standard or by codifying the existing case law.

There was also no consideration given to the position of part time workers who are not able to meet the definition of continuous service. The Part Time Work Convention 1994 (Convention 175), which is based on the rationale that part time workers should not be discriminated against in terms of benefits,26 states that part time workers should also be given annual leave entitlements. These should be calculated on a pro rata basis.27 A comprehensive consideration of the consequences of the 2008 reform could have considered the issue of providing part time workers pro-rated annual leave, in order to circumvent the possibility that employers may avoid legal obligations by casualising its workforce.

There were also a number of other areas where Vanuatu’s law does not conform to international standards (including the provision of payment before going on leave,28 prohibition on any agreement to receive compensation in lieu of taking leave,29 and a requirement that a certain amount of leave be taken in an uninterrupted period30) that were not addressed. The apparent failure31 of the 2008 reform to consider aspects of annual leave other than the amount of annual leave makes it appear piecemeal.

Costs and benefits in respect of achieving government policy

Increasing “decency” in respect of the amount of annual leave may interfere with the stated government policy of increasing decent employment opportunities in two employees should not be permitted to substitute payments in lieu of leave (Article 12). Reading Article 11 in light of both Article 9 and Article 12 suggests that Vanuatu’s current position of allowing leave to accumulate indefinitely and then be paid out on termination is not in conformity with Convention 132. 26 International Labour Organisation, ‘Part time work’ (Report V(1), 80th International Labour Conference, Geneva, 1993) 84 – 85. See also the Preamble to Convention 175, which refers to the Equal Remuneration Convention 1951 and the Discrimination (Employment and Occupation) Convention 1958. 27 Article 7(c) Part Time Work Convention 1994 (Convention 175) . 28 Article 7(2)Convention 132. 29 Article 12 Convention 132; Article 4Convention 52. 30 Article 8(2) Convention 132. 31 This is noted as an apparent failure because there was no clear public discussion of the rationales for reforms. Possibly a range of issues were considered privately but not incorporated into the 2008 reform. 105

other ways. First, it was possible in some circumstance for employers to adjust the direct wage paid in order to take account of the increased indirect costs. Vanuatu’s employment termination regime permits contracts for an unspecified term to be terminated by notice without giving reasons.32 This enabled employers to terminate employment and then offer employees reemployment on different conditions. Employers could not adjust the wage below the minimum wage. However, for existing employees paid more than the minimum wage under contracts for an unspecified term employers were in a position to use termination of employment and reemployment in order to adjust the direct wage paid and, in this way, avoid the increase in the productive cost of labour. This then raises the issue of ‘whether people truly want extra leisure rather than extra income’33 and the degree to which the State should require people to trade-off their income for leisure time. In other words, is a job with more paid leave but less wages more “decent”? As discussed in the introduction, in order for households in Port Vila to meet the costs of their basic needs wages that are greater than the minimum wage are required. A State-imposed trade-off between wages and leisure (caused by employers decreasing direct wages in order to compensate for increased indirect wage costs due to increased annual leave) may not be welcome.

Second, employers could also avoid increased costs due to increased annual leave by casualising the workforce.34 This could be done because Vanuatu’s laws require a person to be in continuous employment in order to be eligible for annual leave, and continuous employment requires a person to be employed for 22 days each month. Whilst this may increase the total number of jobs available as one full time job may be divided into two part time jobs, this also pushes people into underemployment, where they work fewer hours for the same hourly wage but receive less weekly take home pay (due to less hours worked) and fewer benefits. Casualisation is also likely to have more of an impact on low skilled, low wage jobs. There are two reasons for this. First, employers cannot adjust the direct wage below the minimum wage, so would have had to find other strategies to compensate for increased indirect wage costs for this group of employees. Second, there is a shortage of skilled labour, which

32 Section 49 Employment Act [Cap 160]; Lo v Sagan [2003] VUCA 16 http://www.paclii.org. 33 Aidan Turner, Just Capital (2001) 185. 34 As discussed in chapter two there is anecdotal support that this did, in fact, occur. 106

restricts the pool of employees available to fill skilled positions. There is, however, an oversupply of low-skilled employees so competition for part time or casual minimum wage jobs is likely to exist and it is relatively easy to find a second employee to share a job that was previously only done by one person. The potential impact of casualisation on already vulnerable low skilled and low paid workers is difficult to consider as an increase in decent employment opportunities. The impact of the 2008 reform on the attractiveness of Vanuatu as a destination for foreign investment is also problematic. It had been observed that even prior to the 2008 reform the amount of leave provided by Vanuatu’s Employment Act [Cap 160] ‘requires careful consideration by the social partners because its provisions are far more generous than those of Vanuatu’s neighbours. Consequently they may be to the country’s disadvantage’35 as they act as a disincentive to foreign investors who are assumed to be attracted to invest in environments with lower costs. The table above shows annual leave amounts, at the time of the 2008 reform, in Pacific island countries that were also members of the ILO. Comparison indicates that the “starting amount” of 12 days of annual leave provided in Vanuatu’s laws prior to the 2008 reform was the third highest annual leave entitlement amongst the comparator countries. Vanuatu is also the only country to provide that the amount of annual leave increases with length of service. The 2008 reform, by setting the starting rate of annual leave at 21 days, more than doubled the most common amount of annual leave amongst those countries that provide some paid annual leave. This would have an even greater detrimental impact on the attractiveness of Vanuatu’s business environment for foreign investors than the pre-2008 laws did. A reduction in foreign investment in turn reduces private sector development and employment growth.36

35 Joni Madrawiwi, ‘Labour Laws of the Republic of Vanuatu, Report for the ILO’ (Unpublished, 2005), 10. 36 A further reason why increasing annual leave may impact negatively upon private sector development is that increases in annual leave may be absorbed by employers reducing direct wages. Labour is a derived demand, with the demand for labour arising from the demand for the employer’s goods and services produced. If the employee’s “pay packet” is reduced in order to take account of the extra indirect cost of annual leave then there may be a reduction in demand for the employer’s goods and services. This both hinders private sector development reduces demand for labour. The ILO refers to this as a ‘negative feedback loop… ‘high unemployment and low wage growth adversely affect both consumption and investment – two main drivers of economic growth. Workers are consumers, and as they suffer from increased unemployment and have less disposable income, their demand for goods and services is reduced. This further reduces business confidence and firms remain hesitant to invest and hire. Breaking this negative loop will be essential for a sustainable recovery.’ (International 107

Country Amount of annual leave Source Fiji 1037 Section 59(1) Employment Relations Promulgation 2007 Kiribati 0 No provision. Employment Ordinance [Cap 30] Marshall Islands 0 No provision. Labor (Minimum Conditions) Inquiry [Title 16 Cap 5] Papua New Guinea 14 consecutive days paid Section 61(1) Employment Act [Cap 373] leave including non-working days Samoa 10 Section 26 Labour and Employment Act 1972

Solomon Islands 1.25 days per month Reg 4(1) Holidays Sick Leave and Passage Rules 1982 made under Labour Act [Cap 73] Tuvalu 0 No provision. Employment Ordinance [Cap 84] Vanuatu pre-2008 12 days for first 20 years, Section 29 Employment Act [Cap 160] reform increasing to:  24 days after 20 years  48 days after 25 years  72 days after 30 years Increases apply to service in the same undertaking. Vanuatu 2008 reform 21 days for first 20 years, Item 1 & 2 Schedule to the Employment increasing to: (Amendment) Bill 2008  36 days after 20 years  48 days after 25 years  72 days after 30 years Increases apply to service in the same undertaking.

Table 3.1: Comparison of annual leave amounts in the Pacific, 2008

Weighing up the consequences of the 2008 reform to annual leave it is clear that there are both benefits and costs in terms of achieving stated government policy. Increasing the amount of annual leave is likely to improve the amount of annual leave that some employees receive, which can be considered to be improving decent work opportunities. The employees most likely to benefit are those who have in-

Labour Organisation, Global Employment Trends Report 2012: Preventing a Deeper Jobs Crisis (2012) 44.) 37 Fiji’s Employment Relations Promulgation 2007 also provides, in section 69, 3 days bereavement leave per year, so annual leave does not need to be used for this purpose. As bereavement leave does not accumulate and unused bereavement leave does not get paid out when an employment contract is terminated it has not been included in the table. 108

demand skills, so are already relatively secure in employment. However, some employees (particularly already vulnerable low paid and low skilled employees) are likely to experience a decrease in their work conditions through casualisation, which is a decrease in the decency of their work conditions. It is also likely that some employees will be employed on decreased wages. It is questionable whether a reasonable audience would find this to be an increase in the decency of work conditions as it is not clear whether it is desirable to have more paid holidays, but lower wages. Other costs to the government policy of private sector development and employment creation are also possible due to making Vanuatu less attractive for foreign investment.

MATERNITY PROTECTION

Prior to the 2008 reform employees were not permitted to work for 6 weeks after giving birth, and were permitted to take a further 6 weeks leave prior to giving birth.38 During this period the employer was required to pay to the employee not less than half pay.39 Women who were nursing were entitled to two remunerated half hour breaks each day.40 Employers were not permitted to dismiss women during maternity leave. Employees could also take up to 3 additional weeks of unpaid leave due to maternity related health complications, during which time they could not be terminated.41

Five substantive changes were made by the 2008 reform. The maternity benefit increased to 100% of the regular salary. The nursing allowance doubled from ½ an hour twice day to 1 hour twice a day.42 A woman wanting to work in the 6 weeks prior to confinement was required to get a medical certificate stating that she was fit for work.43 If a woman worked for more than one employer the Department of Labour was given the power to determine what percentage of the maternity leave payment each employer should be responsible for.44 Finally women returning to

38 Section 36(1) Employment Act [Cap 160]. 39 Section 36(2) Employment Act [Cap 160]. 40 Section 36(3) Employment Act [Cap 160]. 41 Section 37 Employment Act [Cap 160]. 42 Item 7 of Schedule to the Employment (Amendment) Bill 2008. 43 Item 6 of Schedule to the Employment (Amendment) Bill 2008. 44 Item 6 of Schedule to the Employment (Amendment) Bill 2008. 109

work were required to be appointed to the same position, an equivalent position or a higher position.45

Using the same method as applied in chapter two the impact of the change to the payment during maternity leave increases the productive labour cost by 13% over the pre-2008 reform costs in years during which 12 weeks maternity leave is taken.46 The change to the amount of paid nursing leave increased the productive labour cost by 17% over the pre-2008 reform costs.47

It can be noted that some of the 2008 reforms were uncontroversial. The provision that women should return in an equal or higher position was already an implicit part of the prohibition on the dismissal of women.48 The provision that two or more employers should share maternity payments was also already an implicit part of the pre-2008 law as there were no minimum requirements for eligibility for maternity leave and benefits, which meant that every current employer was required to pay 50% of the salary that the employee usually received from them whilst she was on leave. This would effectively have pro-rated each employer’s contribution, based upon what it had been paying the employee.

45 Item 8 of Schedule to the Employment (Amendment) Bill 2008. 46 Chapter two used a scenario which provides that the employee has 260 paid work days (52 weeks x 5 days per week) in a year and receives 1000 vatu per day worked. Ignoring other direct and indirect wage costs, when the employee takes 12 weeks maternity leave at 50% pay the annual cost of the labour input in relation to the number of days worked (the productive labour cost) is 1150 vatu per day. When the employee takes 12 weeks maternity leave at 100% pay the productive labour cost in the year maternity leave is taken is 1300 vatu per day. 47 Assuming that the 1000 vatu per day is based upon a normal working day of 8 hours (an hourly rate of 125 vatu per hour), when an employee takes 1 hour per day of paid nursing leave the productive labour cost is 143 vatu per hour. If 2 hours of paid nursing leave are taken per day the productive labour cost is 167 vatu per hour. 48 Section 37 Employment Act [Cap 160]. This assumes that the woman’s position prior to taking maternity leave continues after maternity leave, so, logically, is the same position. 110

S 36 (1) An employer shall allow a woman employee to leave her work upon production by her of a medical certificate stating that her confinement is likely to take place within 6 weeks, and shall not permit her to work during the 6 weeks following her confinement and six weeks after her confinement. (2) While absent from work in pursuance of subsection (1) a woman employee shall be entitled to be paid not less than half of the full remuneration she would have earned had she not been so absent. (2A) If a woman continues to work during the pre-confinement period, she must produce to her employer, a medical certificate certifying that she is fit to work during that period. (2B) If there is more than one employer from whom the woman would be entitled to claim wages under this section, the Commissioner of labour, labour officer or labour inspector must determine the amount of wages that must be paid be each employer if she has worked for 4 or more days for the same employers. (3) An employer shall allow a woman employee who is nursing a child half an hour 1 hour twice a day during her working hours for this purpose; such interruptions of work shall be counted as working hours and shall be remunerated accordingly. (4) A woman who returns to her employment after maternity leave: (a) must return to the same or equivalent position held prior to proceeding on maternity leave, without any loss of salary, wages, benefits or seniority; or (b) may be appointed to a higher position.

S 37 No employer shall give notice of dismissal to a woman employee who is absent in pursuance of section 36 or who remains absent as a result of illness certified by a medical practitioner to arise out of pregnancy or confinement and rendering her unfit for work:

Provided that such additional absence from work shall not exceed 3 weeks.

Textbox 3.2: Changes to maternity leave provisions in the Employment Act [Cap 160] pursuant to the 2008 reform

Did the reform increase conformity to international labour standards?

Ascertaining the factual accuracy of the claim that the 2008 reform was necessary in order to meet ILO standards in relation to maternity protection is complex, due to competing standards and exceptions that allow countries to deviate from standards. There are three ILO Conventions dealing with maternity leave, the Maternity Protection Convention 1919 (Convention 3), the Maternity Protection Convention (Revised) 1952 (Convention 103) and the Maternity Protection Convention 2000 (Convention 183). A summary of the content of the three Conventions in respect of the amount of maternity leave to be provided, when leave is to be taken, payment of maternity benefit and nursing breaks is provided in the table below.49

49 This chapter focuses on Convention standards. Conventions are, however, often accompanied by Recommendations, which are soft laws. Because maternity protection is an area that contains a number of conflicting standards, for the sake of comprehensiveness the content of Recommendations are included in the footnotes. 111

Convention 3 Convention 103 Convention 183 Length of leave 12 weeks50 12 weeks51 14 weeks52 When leave is to Compulsory 6 weeks Compulsory 6 weeks Compulsory 6 weeks be taken after giving birth after giving birth after giving birth Optional 6 weeks prior to Remaining leave can be Remaining leave can be giving birth53 taken either prior to or taken either prior to or after giving birth54 after giving birth55 Amount of Not specified56 66% of regular salary57 66% of regular salary but benefit can be less if economy is insufficiently developed58 Who provides Either public funds or a Either public funds or a Either public funds or a benefit system of national system of national system of national insurance59 insurance60 insurance. Prohibits Prohibits direct direct liability of individual liability of employer for maternity employer for maternity benefit but exceptions if benefit61 tripartite parties agree or it is existing national practice for employer to directly pay maternity benefit62 Paid nursing Two ½ hour breaks63 Nursing breaks permitted Nursing breaks permitted breaks but amount not but amount not specified64 specified65

Table 3.2: Summary of ILO Convention standards on maternity leave

None of the Conventions are extensively ratified, and Vanuatu is not a party to any of them. As of October 2012 Convention 183 was in force in 26 countries,

50 Article 3(a) & 3(b) Convention 3. 51 Article 3(2) Convention 103. 52 Article 4(1) Convention 183. Recommendation 191 states that ‘Members should endeavour to extend the period of maternity leave referred to in Article 4 of the Convention to at least 18 weeks.’ (Para1(1)). 53 Article 3(a) & 3(b) Convention 3. 54 Article 3(3) Convention 103. 55 Article 4(4) Convention 183. 56 Article 3(c) Convention 3. 57 Article 4(6) Convention 103. Recommendation 95 provides that ‘Wherever practicable, the cash benefits… should be fixed at a higher rate than the minimum standard… equaling, where practicable 100% of the woman’s previous earnings’ (Para 2(1)). 58 Article 6(5) & 6(6) Convention 183. Recommendation 191 states that ‘Where practicable, and after consultation with the representative organizations of employers and workers, the cash benefits to which a woman is entitled during leave… should be raised to the full amount of the woman's previous earnings’ (Para 2). 59 Article 3 (c) Convention 3. 60 Article 4(4) Convention 103. 61 Article 4(8) Convention 103. 62 Article 6(8) Convention 183. 63 Article 3(d) Convention 3. 64 Article 5 Convention 103. Recommendation 95 provides that ‘Wherever practicable, nursing breaks should be extened to a total period of at least one-and-a-half hours during the working day’ (Para 3(1)). 65 Article 10 Convention 183. 112

Convention 103 was in force in 25 countries and Convention 3 was in force in 26 countries. Ratification rates cannot, therefore, be used as an indicator of the most preferred or accepted standards.

The existence of these competing standards makes it difficult to determine whether Vanuatu’s laws prior to the 2008 reform conformed to international labour standards on maternity protection. For instance:

 The length of leave (12 weeks) was inconsistent with the standard contained in Convention 183 but this standard is not extensively ratified and the length of leave was consistent with the more extensively ratified Convention 3 and Convention 103.  The provisions on when leave is to be taken (optional 6 weeks before birth and mandatory 6 weeks after birth) conformed to all three Conventions in respect of the mandatory 6 week post-birth leave period. The provisions on the optional period of leave were consistent with Convention 3, but allowing the additional 6 weeks to be taken only prior to giving birth is more restrictive than the provisions of Conventions 103 and 183.  The provisions on the amount of benefit (50% of regular salary) were inconsistent with Convention 103 or 183 but Convention 183 provides that in countries whose economy and social security system are insufficiently developed to provide a 66% benefit a lesser amount may be provided for.  The provisions on who provides the benefit (paid directly by the employer) were not consistent with the general principle laid down in Conventions 3, 103 and 183 but Convention 183 does permit exceptions to this where it has been practice for the employer to directly pay for maternity or where there is tripartite agreement for this to occur.  The amount of paid nursing leave (two ½ hour breaks per day) were consistent with the specific standard in Convention 3 and the more general standards in Conventions 103 and 183.

Determining whether the 2008 reform brought Vanuatu’s law into conformity with ILO standards is also not straightforward. Two aspects of the 2008 reform exceeded the minimum standards provided in the Conventions: increasing the nursing allowance to two one hour breaks per day and increasing the benefit amount to 100% of the regular wage. The other three areas are not as clear:

 The length of leave (12 weeks) continued to breach the most recent Convention standard in this area.

113

 No flexibility was introduced in relation to when the optional period of maternity leave could be taken. If flexibility had been introduced Vanuatu’s law, whilst not clearly inconsistent with international labour standards, would have become more clearly compliant with the more recent standards.  Having the employer directly pay the maternity benefit continued to breach Convention standards. As it was existing practice for employers to do this then the reform arguably met the exception provided in Convention 183, although the existing practice was only for employers to pay a 50% benefit.

The stated rationale for the 2008 reform (that the law did not comply with ILO standards) was only partially accurate. Further, the 2008 reform did not bring Vanuatu’s law into full conformity with ILO standards in the specific areas reformed. These factors undermine the factual accuracy of the stated justification for the 2008 reform.

The reforms to maternity leave addressed the amount of leave, the payment whilst on leave, nursing allowances and job protection for women on leave. Not all of the possible discrepancies between Vanuatu’s law and international standards were explored, however. One of the main areas of deviation from the earlier maternity Conventions, discussed above, is the requirement that employers pay maternity leave benefits. The lack of any discussion of this issue is problematic, particularly given that the ILO has clearly opposed an extension of maternity benefits in Vanuatu that are directly funded by the employer.66

A number of other aspects were apparently not discussed. The issue related to the length of maternity leave has already been noted. Conformity with a number of other Convention standards relating to employment protection and non-discrimination67

66 The ILO has recognised that of countries in the Pacific that provide statutory maternity leave, a ‘fundamental weakness is that they are individual employer liability schemes’ (International Labour Organisation, Social Security for All Men and Women A sourcebook for extending social security coverage in Vanuatu: options and plans (2006) 313). The option of extending existing schemes is not recommended because they may increase discrimination against women and also place and unduly heavy burden on small businesses and those that use predominantly female labour (at 314). Rather than increasing directly funded maternity leave the ILO instead recommended adding maternity leave to the existing Vanuatu national provident fund (at 315). 67 Particular standards include a prohibition on requiring a woman to provide a pregnancy test or certificate when she is applying for a job (Article 9(2) Convention 183) and prohibition on giving notice of dismissal while the employee is pregnant (Article 4 Convention 3; Article 6 Convention 103 and Article 8(1) Convention 183). 114

and health protection68 were also not addressed by the 2008 reform. That these issues were not raised suggests less than thorough engagement with the international standards that were used to justify the 2008 reform.

Costs and benefits in respect of achieving government policy

In the absence of ratification, strict adherence to Conventions is less important than adhering to the spirit of the Conventions,69 which ties to the stated government policy of increasing decent work opportunities. The spirit of the maternity Conventions is reflected in their underlying rationales. The initial rationale for maternity protection was to protect both the health of the mother and the child.70 Payments during maternity leave and job protection are necessary in order to reduce economic pressures which may otherwise encourage a woman to return to work quickly, thereby sacrificing both her health and that of her child. Contemporary debate on maternity leave now also includes issues of non-discrimination as part of the rationale for providing leave,71 with Convention 183 expressly acknowledging the women’s rights to aspects of maternity protection.72 Whilst increases in maternity

68 For instance, Convention 183 contains a prohibition on requiring pregnant or breastfeeding employees from performing work that would have a significant risk to the health of the mother or her child (Article 3). 69 This is consistent with the general human rights concept of progressive realisation of economic, social and cultural rights, which requires states ‘to take appropriate measures towards the full realization of economic, social and cultural rights to the maximum of their available resources. The reference to “resource availability” reflects a recognition that the realization of these rights can be hampered by a lack of resources and can be achieved only over a period of time. Equally, it means that a State’s compliance with its obligation to take appropriate measures is assessed in the light of the resources—financial and others—available to it.’ (United Nations Office of the United Nations High Commissioner for Human Rights, ‘Frequently Asked Questions on Economic, Social and Cultural Rights’ (Factsheet 33) http://www.ohchr.org/Documents/Publications/FactSheet33en.pdf (Accessed 3 March 2015). 70 Concerns about long hours and dangerous conditions, particularly for women and children, were central to both domestic labour law and international (European) discussion of labour law in the 19th and early 20th centuries. Maternity leave was one of the subjects considered at the first International Labour Conference (ILC) in 1919, which was primarily focused on protecting vulnerable groups of workers from conditions that would be harmful to their health. Of the 6 Conventions adopted by the ILC in 1919 one concerned hours of work in industry generally (the Hours of Work Convention 1919 (Convention 1)), two concerned specific regulation for young people (the Minimum Age (Industry) Convention 1919 (Convention 5) and the Night Work of Young Persons (Industry) Convention 1919 (Convention 6)) and two concerned specific regulation for women (the Maternity Protection Convention 1919 (Convention 3) and the Night Work (Women) Convention 1919 (Convention 4)). 71 See also International Labour Organisation, above n 66, 306 for a further list of rationales for providing maternity leave. 72 The Preamble notes ‘the need to revise the Maternity Protection Convention (Revised), 1952, and the Maternity Protection Recommendation, 1952, in order to further promote equality of all women in the workforce and the health and safety of the mother and child, and in order to recognize the diversity in economic and social development of Members, as well as the diversity of enterprises, and the 115

benefits and the amount of nursing leave are beneficial for the health of the employed mother and child, there is a complex relationship between maternity leave benefits and equality of opportunity and remuneration for women. Although maternity protection may enable women to balance motherhood with work, maternity protection may affect other aspects of women’s equality by making employers more reluctant to hire women, because rational employers seeking to minimise costs associated with maternity protection will prefer to hire men. ‘Employer liability [for maternity leave payments] has long been viewed as a disincentive to employers to employ women of child-bearing age, and thus detrimental to the promotion of equal treatment for men and women.’73 Indeed, in Vanuatu:

The ILO advises against relying on individual employer liability schemes for paid maternity leave. These may work against the interests of women workers as employers may then be reluctant to hire women who may become pregnant, or who are pregnant, or may seek to find reasons to discharge them in order to avoid the costs of paying for the maternity leave. Also, compliance with individual employer liability schemes is often problematic, particularly in developing counties, and this is currently the case in the Pacific. Individual employer liability can also impose an excessive cost on small and struggling enterprises.74

Statistics indicate that women have a lower labour force participation rate than men. In 2006 the employment to population ratio was 76.1 for men and 66 for women between the ages of 15 - 64. Urban women, whose labour force participation is more likely to be in the form of paid labour which carries an entitlement to maternity benefits, had a lower employment to population ratio than rural women, whose development of the protection of maternity in national law and practice, and… the provisions of the Universal Declaration of Human Rights (1948), the United Nations Convention on the Elimination of All Forms of Discrimination Against Women (1979), the United Nations Convention on the Rights of the Child (1989), the Beijing Declaration and Platform for Action (1995), the International Labour Organization's Declaration on Equality of Opportunity and Treatment for Women Workers (1975), the International Labour Organization's Declaration on Fundamental Principles and Rights at Work and its Follow-up (1998), as well as the international labour Conventions and Recommendations aimed at ensuring equality of opportunity and treatment for men and women workers, in particular the Convention concerning Workers with Family Responsibilities, 1981’. 73 International Labour Organisation, ‘Maternity Protection at Work’ (Report V(I), 87th International Labour Conference, Geneva, 1999) http://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-v- 1.htm (Accessed 10 February 2011). 74 International Labour Organisation, above n 66, 309. 116

labour force participation is more likely to be in the form of subsistence agriculture activities which carry no entitlement to maternity benefits. In 2006 the employment population ratio for urban women was 43.1, as compared to 73.6 for rural women. The employment to population ratio of urban women is decreasing, whilst it is increasing for men. Between 1999 and 2006 the urban male employment to population ratio increased by 1.5% whilst the urban female employment to population ratio decreased by 5.5%.75 Whilst these statistics do not establish what causes these gender differences, it can be hypothesised that the requirement to provide maternity leave is one reason for these differences.

Another negative impact on women’s employment opportunities arises because one way for employers to minimise potential maternity leave costs is to engage female employees on short term contracts or as casual labour. Using short term contracts enables an employer to legally cease an employment relationship by not renewing the contract.76 Similarly, a casual working relationship in which a woman has no expectation that employment will be continued, is more vulnerable to being varied or ended for apparently non-pregnancy related reasons, as part of the nature of casual employment relationships is that they are more uncertain.77 It can also be noted that the statutory prohibitions on terminating a woman due to pregnancy only apply to employees who are absent on maternity leave or remain absent for up to 3 weeks due to illness.78 There is no prohibition on terminating a woman’s employment because she is pregnant prior to her commencing maternity leave. Further, as discussed in relation to annual leave, contracts for an unspecified time can be terminated without reason by giving notice. The act of termination by notice whilst an employee is pregnant is therefore not illegal if it is done prior to the employee commencing maternity leave. These employer strategies to avoid maternity leave payments also

75 All statistics in this paragraph are from Vanuatu Prime Minister’s Office, Millennium Development Goals 2010 Report for Vanuatu (September 2010) 10. 76 In Vanuatu no reasons have to be given for not renewing a contract (section 48 Employment Act [Cap 160]). 77 All contracts for an unspecified duration are terminable for no reason by giving notice. However, contract for an unspecified term in which a woman is employed in a stable job for set regular hours can be contrasted with a casual job, which has been defined in the latest version of Vanuatu’s Employment Relations Bill (2012) as being working ‘without fixed hours or attendance arrangements (section 4). If an employee is in a stable job for set regular hours received notice when she become pregnant it will be more difficult for an employer to refute a claim that she was terminated due to pregnancy than it would be if the employee was in a more precarious casual job that is more subject to termination at any point. 78 Section 37 Employment Act [Cap 160]. 117

reduce the investment that employers are likely to make in training, which in turn limits women’s access to higher status, and better paid jobs.79

Another strategy for employers to minimise costs is to adjust direct wages to take account of potential maternity leave benefit payments.80 Indeed, this may contribute to the male/female wage differential that exists both in Vanuatu81 and internationally.82 None of these things can be seen as increases in decent employment opportunities for women.

The increases to maternity benefits may also affect the government policy of private sector development and employment creation as disparity between Vanuatu’s

79 There has been ‘Little, if any, systematic research [which] has examined the intended and unintended consequences of social policies, particularly family policies, for gender-based earnings inequalities’ (Hadas Mandel and Moshe Semyonov, ‘Family Policies, Wage Structures and Gender Gaps: Sources of Earnings Inequality in 20 Countries’ (2005) 70 American Sociological Review 949, 950). However, recent research in developed countries with state provided welfare systems indicate that ‘when firms seek workers for jobs with high training costs, they favour more stable and productive employees. Because the information on individual job applicants is limited, employers discriminate against entire groups of employees considered to be less productive.’ (Hadas Mandel, ‘Winners and Losers: The Consequences of Welfare State Policies for Gender Wage Inequality’ (2010) Advance access DOI:10.1093/esr/jcq061 European Sociological Review 1, 3 http://esr.oxfordjournals.org/content/early/2010/11/19/esr.jcq061.full (Accessed 10 February 2011).) It should be noted that this research was not conducted in countries where employers directly bear the cost of maternity leave. Employers are therefore not in a position to be able to avoid liability for maternity payments. In countries where employers do bear the cost of maternity leave directly there are added incentives for employers to find ways to avoid maternity liability through mechanisms such as causal contracts so it is to be expected that there will be a greater disincentive to invest in training women. 80 Section 8(1) of the Employment Act [Cap 160] requires that women be provided with equal pay to men if they are carrying out ‘like work’. However, equal remuneration between a male and a female employee is not required ‘if the employer proves that the variation is genuinely due to a material difference (other than the difference of sex) between her case and his’ (Section 8(3)). Given that the potential for paying maternity leave creates a material difference in the indirect wage paid, so is not simply a difference of sex, it is arguable (and was raised as a possibility by some employers in the discussions surrounding the 2008 reform) that providing women with lower direct wages on the basis that they have the potential for being paid higher indirect wages is not a breach of section 8(1). This argument has not been tested in court though, and seems counter to the principle of “equal pay for equal work”. Adjusting the existing direct wage of current employees to make allowance for the indirect wage costs of maternity leave would therefore probably be illegal. For new employees, however, it is possible to disguise a wage differential that is actually based on potential maternity leave costs as being a wage differential based on different factors. 81 For instance, in the public sector women ‘on average earn only 80% of male public service employees.’ (Chakriya Bowman, Amanda Ellis, Jozefina Cutura, Clare Manuel, Women in Vanuatu: analyzing challenges to economic participation (2009) 72.) In 2006 the average wage of urban males was 49,100 vatu whilst the average wage of urban females was 38,800 vatu. The difference was not so large in rural areas with the average wage of males being 33,400 vatu and the average wage of females being 31,600 vatu. (Vanuatu Prime Minister’s Office, above n 75, 34.) 82 A study of 20 developed countries, most of which have legislation prohibiting gender discrimination in employment, found that mean earn, on average, 26% more than women with identical characteristics. (Mandel and Semyonov, above n 79, 956.) 118

maternity benefits and maternity benefits in countries competing to attract foreign investment act as a disincentive on foreign investment. Any disparity will particularly affect investment in industries that are traditionally gendered and rely on female employment (such as Fiji’s garment industry, or waitressing and cleaning positions in Vanuatu’s tourism industry).

The table below shows maternity benefits in respect of the amount of leave, the payment whilst on leave and the nursing allowance provided, in 2008, in Pacific island countries that were members of the ILO at that time.

Country Length of maternity Amount of Nursing Source leave payment allowance Fiji 84 consecutive days First 3 births Nil Section 101 – no mandatory 100% of salary Employment Relations period 4 + births, 50% of Promulgation 2007 salary Kiribati 6 weeks prior to birth 25% of salary ½ hour Section 80 Employment optional; 6 weeks twice a day Ordinance [Cap 30] post birth mandatory Marshall Nil Nil Nil No provision. Labor Islands (Minimum Conditions) Inquiry [Title 16 Cap 5] Papua New Hospitalisation prior Unpaid, except ½ hour Sections 100 & 101 Guinea to giving birth, 6 where sick leave twice daily Employment Act [Cap weeks post giving or annual leave 373] birth, plus up to 4 converted into further weeks for maternity leave sickness. Samoa Nil Nil Nil No provision. Labour and Employment Act 1972 Solomon 12 weeks in total; 6 25% of salary 1 hour twice Section 42 Labour Act Islands weeks post birth a day [Cap 73] mandatory Tuvalu 6 weeks prior to birth 25% of salary ½ hour Section 80 Employment optional; 6 weeks twice a day Ordinance [Cap 84] post birth mandatory Vanuatu – 6 weeks prior to birth 50% of salary ½ hour Section 36 Employment prior to 2008 optional; 6 weeks twice a day Act [Cap 160] reform post birth mandatory Vanuatu – 6 weeks prior to birth 100% of salary 1 hour twice Item 5& 7 Schedule to 2008 reform optional; 6 weeks a day for up the Employment post birth mandatory to 24 (Amendment) Bill 2008 months

Table 3.3: Comparison of length of maternity leave amounts in the Pacific, 2008

In all of the countries in the table above the employer bears the cost of maternity leave benefits directly. Vanuatu’s pre-2008 maternity leave provisions were generous

119

compared with other countries and the 2008 reform made Vanuatu’s maternity leave provisions the most generous amongst the comparator countries.

The consequences of the reform in relation to social and economic policy are clearly problematic. Whilst an increase in maternity leave benefits appears to provide women with better working conditions, there are associated costs in respect of the employability of women, the salaries women earn and employer investment in female employees. Such an increase may also discourage private sector development and employment growth, by making Vanuatu comparatively less attractive than other Pacific countries in respect of maternity related labour costs.

SEVERANCE ALLOWANCE

Part XI of the Employment Act establishes a severance allowance regime. When the Act was first passed employees were only eligible for severance pay if they were terminated or retired by their employers after being in continuous employment for more than 1 year.83 Continuous employment was defined as working for 4 or more days per week.84 In 1989 eligibility was extended to include people who had been in continuous employment for more than 1 year but were unable to continue working because they were certified as being medically unfit.85 Eligibility for severance payment was again extended in 1995, to include employees who had been in continuous employment for more than 10 years and who resigned or chose to retire.86

The amount of severance pay was provided by s 56(2) to be:

(a) for every period of 12 months- (i) half a month's remuneration, where the employee is remunerated at intervals of not less than, 1 month.

83 Section 54(1) of the Employment Act 1983 read ‘Subject to section 55, where an employee has been in continuous employment for a period of not less than 12 months with an employer and the employer terminates his employment or retires him on or after his reaching the age of 55, the employer shall pay severance allowance to the employee.’ 84 Section 54(2)(a) Employment Act [Cap 160]. 85 Employment (Amendment) Act 1989. 86 Employment (Amendment) Act 1995. 120

(ii) 15 days' remuneration, where the employee is remunerated at intervals of less than 1 month; (b) for every period less than 12 months a sum equal to one-twelfth of the appropriate sum calculated under paragraph (a) multiplied by the number of months during which the employee was in continuous employment

Case law has determined that for the purposes of severance allowance remuneration only means wages paid, and excludes other benefits such as housing benefit.87

There are some exceptions to the requirement to pay severance. An employer does not have to pay severance if the employee has been dismissed for serious misconduct, if an employer changes and the employee is offered employment by the reconstituted employer, and if the employee has been recruited from outside of Vanuatu and is not ordinarily resident in Vanuatu.88

Section 57(1)(b) states that any gratuity granted by the employer or any payment into a pension fund other than the Vanuatu National Provident Fund can be deducted from the severance allowance payable. The Court of Appeal has stated that ‘[i]n our opinion only gratuities granted by the employer at the time of dismissal may be deducted under S. 57(b)(i)’.89 No reason was given for this statement, however, and the matter has not come up in court again so it is uncertain whether this is established . The Supreme Court has also ruled that ‘the only deduction an employer is entitled to make is in respect of any gratuities the employer has made from any pension fund other than the Vanuatu National Provident Fund (V.N.P.F.).’90 Whilst this appears to be an error in statutory reading as section 57(1)(b)(i) clearly permits any gratuities paid by the employer to be deducted from severance in a situation where the employee is not retired, this decision is not reported to have been appealed.

87 Bank Indosuez v Ferrieux [1989 – 94] Van LR 490; De Gaillande v ANZ Bank (Vanuatu) Ltd [2008] VUSC 63 http://www.paclii.org, quoting National Bank of Vanuatu v Cullwick [2002] VUCA 39 http://www.paclii.org. In Benard v Republic of Vanuatu [2012] VUCA 4 http://www.paclii.org the housing allowance was included for the purposes of determining remuneration for the purposes of severance. There is no discussion of why this was done, however. 88 Section 55 Employment Act [Cap 160]. 89 Mouton v Selb Pacific Ltd (Judgment #3) [1998] VUCA 8 http://www.paclii.org. 90 Molloy v Air Vanuatu (Operations) Ltd [2004] VUSC 52 http://www.paclii.org. 121

Another notable aspect of the severance allowance regime is that, the ‘court shall, where it finds that the termination of the employment of an employee was unjustified order that he be paid a sum up to 6 times the amount of severance allowance’.91 The employee bears the onus of proving that the dismissal was unjustified. The courts have made some attempts to clarify how the “multiplier” should be applied. Both the manner in which the dismissal occurred and the personal impact that being terminated has had on the employee, including whether or not he or she has managed to find new employment will affect the court’s decision as to how much to increase severance by.92

The 2008 reform affected only two parts of the severance allowance regime: the amount of severance to be paid and the period of employment that an employee who resigns must have worked before becoming eligible for a payment. The 2008 reform changed section 54(1)(d) so that employees who resigned in good faith were subject to the same minimum qualifying period of 12 months in continuous employment that employees who are terminated by their employers must meet before becoming entitled to severance.93 The amount of severance increased to two month’s salary for every year worked,94 a 300% increase. Severance allowance is an anticipated cost, which is paid on termination of employment only in certain circumstances. As the reason for termination cannot be predicted this anticipated cost does need to be budgeted for, though. Using the same method as applied in chapter two this increased the anticipated productive labour cost by 12% from pre-2008 reform levels.95

91 Section 56(4) Employment Act [Cap 160]. 92 Mann v Air Vanuatu Ltd [2010] VUSC 168 http://www.paclii.org; Malere and Others v Vanuatu Broadcasting and Television Corporation [2009] VUSC 164 http://www.paclii.org [5] – [10]; Hack v Fordham [2009] VUCA 6 http://www.paclii.org [23] – [24]. 93 Item 10 Schedule to the Employment (Amendment) Bill 2008. 94 Items 11 and 12 Schedule to the Employment (Amendment) Bill 2008. 95 Chapter two used a scenario which provides that the employee has 260 paid work days (52 weeks x 5 days per week) in a year and receives 1000 vatu per day worked. Ignoring other direct and indirect wage costs, when the employee is entitled to a severance allowance of ½ a month’salary per year the cost of the labour input in relation to the number of days worked (the productive labour cost) is 1042 vatu per day. When the employee is entitled to a severance allowance of 2 months per year the productive labour cost is 1169 vatu per day. 122

S 54(1) Subject to section 55, where an employee has been in the continuous employment of an employer for a period of not less than 12 months commencing before, on or after the date of commencement of this Act, and – (a) the employer terminates his employment; or (b) the employee retires on or after reaching the age of 55 years; or (c)the employer retires the employee on or after reaching the age of 55 years; or (d) where the employee has been in continuous employment with the same employer for a continuous period of not less than 10 consecutive years, the employee resigns in good faith; or (e) the employee ceases to be employed by reason of illness or injury and is certified by a registered medical practitioner to be unfit to continue to work, the employer shall pay severance allowance to the employee under section 56 of this Act.

S 56 (1) Subject to the provisions of this Part, the amount of severance allowance payable to an employee shall be calculated in accordance with subsection (2). (2) Subject to subsection (4) the amount of severance allowance payable to an employee shall be – (a) for every period of 12 months 2 months remuneration – (i) half a month's remuneration, where the employee is remunerated at intervals of not less than 1 month; (ii) 15 days' remuneration, where the employee is remunerated at intervals of less than 1 month; (b) for every period less than 12 months, a sum equal to one-twelfth of the appropriate sum calculated under paragraph (a) multiplied by the number of months during which the employee was in continuous employment.

Textbox 3.3: Changes to severance allowance provisions in the Employment Act [Cap 160] pursuant to the 2008 reform

Did the reform increase conformity with international labour standards?

The Termination of Employment Convention 1982 (Convention 158) recognises that not all states have national social security schemes and, in those instances severance allowances could fulfill a social security role.96 It provides, in Article 12, that:

1. A worker whose employment has been terminated shall be entitled, in accordance with national law and practice, to- (a) a severance allowance or other separation benefits, the amount of which shall be based inter alia on length of service and the level of

96 International Labour Organisation, ‘Protection Against Unjustified Dismissal’ (Report III (IVB), 82nd International Labour Conference, Geneva, 1995) [266 – 268] http://www.ilo.org/public/libdoc/ilo/P/09661/09661%281995-82-4B%29.pdf (Accessed 10 February 2011). 123

wages, and paid directly by the employer or by a fund constituted by employers' contributions; or (b) benefits from unemployment insurance or assistance or other forms of social security, such as old-age or invalidity benefits, under the normal conditions to which such benefits are subject; or (c) a combination of such allowance and benefits.

Convention 158, which had been ratified by 36 countries as of September 2012 but is not ratified by Vanuatu, does not provide any guidance as to the amount of severance allowance that should be paid. The Termination of Employment Recommendation 1982 (Recommendation 166) repeats the content of Article 12 but also does not elaborate on the amount of severance that should be paid.97

In Vanuatu, where there is no national unemployment benefit scheme, severance allowance fulfils the social security role of income protection in the event of unemployment. Paying severance to fulfill this role certainly is in accordance with ILO standards. However, the ILO does not offer any guidance as to what a reasonable amount of severance is, so it cannot be said that providing 2 week’s wages per year worked as a severance allowance was inadequate, or inconsistent with of ILO standards. Convention 158 also only envisages severance payments where the employer terminates the employee, and not where the employee voluntarily resigns. Changing eligibility criteria to enhance eligibility for severance allowance for employees who voluntarily resign also does not have a basis in ILO standards.98

97 Para 18 Recommendation 166. 98 The Committee of Experts on the Application of Conventions and Recommendations (CEACR) has observed that a resignation that is prima facie voluntary but is really at the initiative of the employer, for instance because it has pressured the employee to accept changed working conditions in a situation where changed conditions are not an operational necessity or resign, should not be considered to be a voluntary resignation for the purposes of determining eligibility for benefits on termination (International Labour Organisation, above n 96, [22]). The 2008 reform did not specifically address eligibility to claim severance in the event that the employee has resigned at the employer’s instigation, but instead covered all voluntary resignations. It can also be observed that Vanuatu’s law recognises that resignation by the employee because of employer pressure or illegal actions constitutes constructive dismissal and is not to be treated as a voluntary resignation. In the event of constructive dismissal statute permits employees to pursue claims for breach of contract (section 52 Employment Act [Cap 160]). Vanuatu courts also recognise that constructive dismissal gives rise to an obligation to pay severance allowance (see, for example, Banque Indosuez Vanuatu Ltd v Ferrieux [1990] VUCA 3 http://www.paclii.org.vu). Codifying the common law position by amending the content of section 52 of the Employment Act [Cap 160] to clarify that in the event that of constructive dismissal severance 124

Further, whilst the Termination of Employment Convention (Convention 158) mentions severance allowance, this is not its primary focus. Instead Convention 158 has ‘a twofold objective: to protect workers in their professional life against any unjustified termination of employment, while preserving the right of employers to terminate the employment of workers for reasons which are recognized as being valid.’99 Valid reasons must be ‘connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.’100 Employees, however, can still terminate by way of notice without needing to specify a reason. Convention 158 also provides for ‘procedural guarantees, namely the right of the worker to be heard prior to or at the time of termination, procedures of appeal against termination, the right to a period of notice… [redundancy and] compensation in the event of unjustified termination of employment and income protection.101

Vanuatu’s Employment Act [Cap 160] contains provisions for procedural fairness in respect of termination for serious misconduct which are consistent with Convention 158.102 However, because Vanuatu’s law permits contracts for an unspecified time to be terminated by notice without any reason, Vanuatu’s law is in contravention of 103 parts of Convention 158.

It can be observed that if the desired impact of the law reform relating to severance allowance was to increase conformity with international labour standards one would

allowance must be paid is an example of a possible reform that targets the concern of the CEACR in respect of resignations that are not truly voluntary. 99 International Labour Organisation, above n 96, [372]. 100 Article 4. 101 International Labour Organisation, above n 96, [372]. 102 An employer may terminate an employee instantly and with no compensation in lieu of notice in the event of serious misconduct (Section 50 Employment Act [Cap 160]). The employer can only exercise this right to termination if it ‘cannot in good faith be expected to take any other course’ (Section 50(3) Employment Act [Cap 160]). If termination is being done on the grounds of misconduct the employer must provide reasons and give the employee ‘adequate opportunity to answer any charges made against him’ (Section 50(4) Employment Act [Cap 160]) before termination. The employer must also act within a reasonable time of the incident of misconduct, or else the right to terminate instantly is waived (Section 50(5) Employment Act [Cap 160]). The Act states that certain things such as making a complaint in good faith against an employer or being a member of a trade union are not instances of serious misconduct (Section 50(2) Employment Act [Cap 160]). 103 It can be observed that the Minister of Internal Affairs’ advice to terminate and re-engage employees in response to increases in severance payments would not be consistent with Article 1(3) of Convention 158, or with paragraph 3 of Recommendation 166. 125

expect at least some consideration or discussion of the central issue contained within the particular Convention that also contains severance allowance provisions. That this issue were not raised suggests less than thorough engagement with the international standards that were used to justify the 2008 reform.

Costs and benefits in respect of achieving government policy

An increase in the statutory amount of severance allowance is prima facie better for employees. It ensures that employees whose employment is terminated have some degree of income protection, or “financial cushioning” whilst they look for more work or adjust to no longer earning a wage. Severance allowance is of particular importance in countries, such as Vanuatu, that have no State-managed unemployment benefits scheme.

Providing severance allowances may result in employees’ direct wage being reduced which, as discussed above in relation to annual leave, may be perceived to reduce the “decency” of work opportunities. There are public policy reasons for “forcing” employees to save for times when they are not working though. ‘Workers are often myopic. They fail to set aside funds for their retirement… and mandatory retirement provisions protect members of society from having to support others that have been improvident.’104 The same reasoning can be applied to workers who may fail to set aside funds for periods of unemployment. Severance pay essentially asks employers to “save” for their employees. Any perceived reduction in “decency” of work due to a reduction in the direct wage is therefore outweighed by the public policy need to have a severance payment that acts as a cushion for periods of unemployment.

A more significant concern about possible reduction in the “decency” of employment opportunities arises because employers can avoid paying severance allowance by reducing the number of days worked to less than four per week. As discussed above in the section on annual leave, this is likely to have more of an effect on people in low skilled low wage jobs, who may be pushed into less secure underemployment. This is not an increase in decent employment opportunities.

104 International Labour Organisation, above n 66, 155. 126

There are also wider costs in relation to achieving the stated government policy of private sector development and employment growth. Chapter two discussed how the sudden increase in employers’ liabilities in respect of severance allowance, could affect solvency. This has a particularly dramatic impact on private sector development and employment creation if businesses fail and close. The existence of severance allowance also makes Vanuatu comparatively less attractive than other Pacific island countries as a destination for foreign investment. As the table below indicates, at the time of the 2008 reform severance allowance was not a common feature of Pacific employment laws. Indeed, the Asian Development Bank considered that the amount of the severance payment, even prior to the 2008 reform, was particularly problematic because of this.105 It also condemned the 2008 reforms to severance allowance.106

Country Severance Source Fiji 1 week’s salary per year worked for employees Section 108(1) Employment terminated on the grounds of redundancy Relations Promulgation 2007 Kiribati Nil Marshall Nil Islands Papua New Nil Guinea Samoa Nil Solomon Nil Islands Tuvalu Nil Vanuatu – 2 weeks salary per year worked Section 56(2) Employment Act prior to 2008 [Cap 160] reform Vanuatu – 1 months salary per year worked Items 11 & 12 Schedule to the 2008 reform Employment (Amendment) Bill 2008

Table 3.4: Comparison of severance allowance amounts in the Pacific, 2008

Increasing severance allowance brings with it a number of costs in relation to achieving stated policy. Inhibiting private sector development and employment growth by deterring investment and reducing decent work opportunities by pushing people into part time or casual work are two costs. The third, most dramatic cost was

105 Asian Development Bank, Vanuatu Economic Performance, Policy and Reform Issues (1997) 77. 106 Asian Development Bank, Vanuatu Economic Report 2009: Accelerating reform, executive summary (2009) 8. 127

the potential for the reform to bankrupt existing businesses, which removes work opportunities altogether.

CONCLUSION

The aim of this chapter has been to explore the extent to which the 2008 reform could be justified as achieving pre-specified policy objectives. In each of the three areas of reform (annual leave, maternity benefits and severance allowance) four questions were considered.

1. Did the pre-2008 reform law conform to ILO standards?; 2. If not, did the 2008 reform improve conformity to ILO standards?; and 3. What impact would the 2008 reform have had on the broader policy objective of promotion of decent employment opportunities? 4. What impact would the 2008 reform have had on the broader policy objective of private sector development and employment creation?

In respect of questions 1 and 2, the relationship between Vanuatu’s law (both prior to the 2008 reform and under the 2008 reform) and the relevant international labour standards was not entirely clear. In the case of severance allowance there was no particular international labour standard relating to the amount of severance allowance so it cannot be said that the pre-2008 law breached standards, or the 2008 reforms helped to achieve these standards. It cannot be said that this reform was necessary in order to increase conformity to ILO standards./In the case of annual leave and maternity leave competing standards make it difficult to conclusively determine whether the pre-2008 law breached standards. In each of these cases smaller changes could have been introduced in order to increase conformity to the most recent standards. Further, the piecemeal approach of the reforms meant that some aspects of the pre-2008 law which could usefully have been altered in order to achieve ILO standards were overlooked. These issues again make it difficult to say that the 2008 reform was necessary in order to increase conformity to ILO standards, particularly in the absence of ratification of any Conventions.

128

In respect of question three, the reforms all aimed at increasing workers’ benefits, thereby improving the decency of employment opportunities. The articulation of the 2008 reforms with the decent work agenda is not, however, comfortable.107 Whilst each of the three areas of reform appear to increase decent work opportunities by improving working conditions, analysis indicates that these improvements do not come without costs to decent work opportunities. As there is a shortage of high skilled employees (who also earn higher wages due in part to their scarcity), it is this group who are more likely to benefit from improved working conditions. Low skilled, low wage employees who are more likely to exist close to the poverty line are most likely to face negative consequences due to the reforms. These employees, whose employment is already precarious,108 are more likely to be pushed into greater precariousness through an increase in part time work with fewer social benefits. Women are another group who are particularly affected as male employees do not have the same potential maternity leave costs.

Do these costs in terms of achieving decent work outweigh the benefits? Davidov and Langille observe that labour law may be ‘vilified for… favouring already well- placed employees over less fortunate ones; and discredited for failing to cover the most vulnerable workers.’109 Decent work encompasses the concept of equity. Favouring the well placed at the expense of the vulnerable is counter to the concept of equity. Further, the global development agenda as defined by the United Nations Millennium Development Goals (MDGs)110 includes, as target 1B, ‘to achieve full

107 In addition to substantive concerns about the extent to which the 2008 reform furthers the decent work agenda, there are two technical reasons why the 2008 reform does not articulate well with the DWCP. First, the areas that the DWCP identifies as requiring legal reform relate to promoting core international labour standards, strengthening the industrial relations system, the OSH laws and the dispute resolution framework and extending particular social protection laws. The DWCP does not recommend increases in employee benefits. The 2008 reform does not, therefore, further the stated objectives of the DWCP. Second, the DWCP emphasises the importance of tripartite constituents and social dialogue. The process of introducing the 2008 reform did not involve social dialogue so the process of the reforms ignored the principles of the DWCP. 108 ‘Precarious employment encompasses forms of work involving job insecurity, low income, limited social benefits and statutory entitlements, and high risks of ill health’ (Vosko, quoted in John Evans and Euan Gibb, ‘Moving From Precarious Employment to Decent Work’ (Global Union Research Netweork Discussion Paper 13, 2009) 18.) 109 Guy Davidov and Brian Langille, ‘Understanding Labour Law: A Timeless Idea, a Timed-Out Idea, or an Idea Whose Time has Now Come?’ in Guy Davidov and Brian Langille, The Idea of Labour Law (2011) 1, 1. 110 The MDGs provide development targets, to be achieved by 2015, in relation to reducing poverty. They ‘form a blueprint agreed to by all the world’s countries and all the world’s leading development institutions.’ (United Nations, ‘Millennium Development Goals: Background’ (undated) http://www.un.org/millenniumgoals/bkgd.shtml (Accessed 19 October 2012). There are initiatives to 129

and productive employment and decent work for all, including women and young people’.111 This suggests that there should be particular concern about inequitable outcomes for young people (who, as they are inexperienced are more likely to be low skilled) and women.

The answer to question three may suggest that any increases would be unreasonable because they may have negative impacts. This conclusion is itself unsustainable because it does not allow for any changes to meet social policy objectives that would impact on productive labour costs. Lack of data on the actual impact of the 2008 reform (both because Vanuatu does not produce labour market statistics and because the 2008 reform never came into force) means that the actual impact cannot be measured. Economic theory does, however, assume that the greater the increased productive labour costs for businesses in order to meet improved working conditions, the greater the cost to decent work opportunities for vulnerable employees as employers take measures to avoid cost increases. The magnitude of change is therefore relevant in assessing its impact. None of the controversial 2008 reforms were small. The starting rate of annual leave increased by 75%, the maternity leave benefit increased 100%, the nursing allowance increased by 100% and the severance allowance increased by 300%. Even if considered individually each reform is costly and is likely to provide an incentive to businesses to avoid costs. Making three costly reforms at the same time strengthens this incentive, and thereby increases the likelihood of negative impacts as a result of the 2008 reform.

In respect of question four, one of the drivers of private sector development is foreign investment. In all three areas the 2008 reforms made Vanuatu’s employment laws more generous than those in most, if not all, neighbouring Pacific countries that compete for foreign investment. As foreign investment is assumed to be attracted to lower cost environments the reforms are likely to decrease foreign investment driven private sector development. Policy makers that are measuring their actions in respect of likely impacts on stated policy goals, which include private sector led

continue progress on the MDGs after 2015 (United Nations, Millennium Development Goals: Beyond 2015’(undated) http://www.un.org/millenniumgoals/beyond2015.shtml (Accessed 19 October 2015). 111 United Nations, ‘Millenium Development Goals’(undated) http://www.un.org/millenniumgoals/poverty.shtml (Accessed 10 May 2012). 130

development, should be concerned about this. There is also some evidence that foreign investment did, in fact decrease following the 2008 reform.112

It can, however, be observed that there is evidence to suggest that low labour costs in themselves are not a decisive factor in determining where to make a foreign investment.113 This evidence may be used to suggest that it was not the content of the 2008 reform per se, but the environment which allowed the 2008 reform to occur that undermined the confidence of foreign investors. Further, policy makers who are attempting to balance economic and social policy may observe that for Vanuatu to determine labour standards based on a comparison with other Pacific countries, when their labour laws are old and were not made with social policy in mind, is to join a “race to the bottom”.114 The conclusion that the 2008 reform would likely have negatively impacted on private sector led development and employment by deterring foreign investment should therefore be treated with some caution, and certainly should not be a decisive factor in a holistic impact analysis..

In sum, it is difficult to maintain that the 2008 reform can be justified to an audience as achieving stated policy goals once the (actual and likely) impacts of the 2008 reform are analysed. The stated reason for the reform occurring – to increase conformity to ILO standards – is either baseless (in the case of severance allowance) or contestable (in the case of annual leave and maternity leave). It has been shown that: Vanuatu had no international law obligations to reform its laws, that the pre- 2008 reform law did not clearly fail to meet ILO standards, and that at least some of the reforms did not increase conformity to ILO standards. There are also difficulties in respect of the impact of the 2008 reform on achievement of broader stated government policy. Of particular concern is that the consequences of the 2008 reform had detriments, as well as benefits in respect of improving decent work opportunities. These detriments particularly affected vulnerable employees, which in itself is counter to the concept of decent work.

112 See discussion in chapter two. 113 See, for example, Andre Raynauld and Jean-Pierre Vidal, Labour Standards and International Competitiveness (1998). 114 The concept of a race to the bottom is discussed in chapter one. In terms of the dates of laws existing in comparator countries in 2008, Solomon Islands’ law originated in 1960, Kiribati and Tuvalu’s law originated in 1966, Samoa’s law originated in 1972, Papua New Guinea’s law originated in 1978. Marshall Islands has no general law regulating the private sector employment relationship. 131

This raises the question of, if the 2008 reform was not clearly justifiable as achieving either narrow or broad policy goals, then why was it made? Chapter two aligned the 2008 reform with the policy of promoting decent work by considering both explicit government statements as to the reason for the reform and how those statements reflected the ideological foundation of the decent work policy agenda, which maintains that legal protection is necessary to resist oppression of employees by employers. This raises the possibility that the 2008 reform can be understood as being largely driven by ideology rather than by a more dispassionate impact analysis of the law. The following chapter explores the ideological foundations of the 2008 reform.

132

CHAPTER 4 ‘OUTDATED COLONIAL LAWS’:1 RELATING THE NARRATIVE TO VANUATU

INTRODUCTION Chapter three concludes that an analysis of the impacts of the 2008 reform indicate that it is not able to be clearly justified as achieving either narrow or broad policy goals. This means that an alternative explanation must be sought, and the one that this chapter explores is whether in fact the reform was largely driven by an ideological position which maintains that legal protection is necessary to resist oppression of employees by employers. This ideological position reflects the traditional narrative of employment law and underpins the International Labour Organisation’s (ILO’s) decent work agenda and the Vanuatu government’s social policy of promoting decent work. This was not, however, the only ideological position that was open to the Vanuatu government. Free market ideology could have been adopted on the basis that it aligned with the Vanuatu government’s policy of private sector development and employment creation as stated in the Priorities and Action Agenda (PAA).2 International labour standards could have been rejected on the basis that they are a device to protect developed countries interests.3 What, then, influenced the position the Vanuatu government assumed?

The first clue as to how the traditional narrative of employment law interacts with the socio-political environment in Vanuatu comes from the persisting belief that, even

1 Lionel Kaluat, Vanuatu Commissioner for Labour, ‘Powerpoint presentation’ (Powerpoint presented at Tripartite High-Level Meeting: Decent Work for Sustainable Development in the Pacific, Port Vila Vanuatu, 9 Feb 2010). 2 The ideological foundations of the PAA have been discussed further in chapter one. 3 This position, drawn from the debate on globalisation and labour standards was discussed in chapter one. It was reflected in some local commentary, discussed in chapter two, that interpreted the 2008 reform as ‘a deliberate attempt to sabotage the country’s economy and render Vanuatu more dependant (sic) on its benevolent neighbours.’ (Lora Lini, ‘Leadership Crisis?’ Vanuatu Daily Post (Port Vila, Vanuatu) 2 December 2008, 4.) External interference with sovereignty was also implied when some “blame” for the 2008 reform was placed on external forces in the form of “ILO consultants”. (‘Crowby to meet private sector over amendment’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 1.) 133

after the 2008 and 2009 reforms, Vanuatu has outdated colonial employment laws.4 This statement is factually inaccurate if “colonial” is given its ordinary meaning of having been made by the colonial authorities and then adopted on Independence. Whilst many other Pacific employment laws are colonial in this sense,5 Vanuatu’s employment laws are clearly not directly adopted from colonising authorities, as the suite of laws relating to employment in Vanuatu were all made post-Independence.6 Vanuatu gained Independence in 1980. The three “core” employment laws, the Employment Act [Cap 160], the Trade Unions Act [Cap 161] and the Trade Disputes Act [Cap 162] were all passed in 1983. The Minimum Wage and Minimum Wages Board Act [Cap 182] was passed in 1984, the Labour (Work Permits) Act [Cap 187] in 1985, and the Health and Safety at Work Act [Cap 195] and Vanuatu National Provident Fund Act [Cap 189] in 1986. The Workmen’s Compensation Act [Cap 202] was passed in 1987 but not brought into force until 2004. None of them are “copies” of colonial legislation. The factual inaccuracy of the persisting belief as to the colonial origins of Vanuatu’s employment law suggests that labeling something as colonial signifies something other than simply having been made by colonisers. Rather, understanding the implications of labeling employment law as colonial requires an examination of the context of Vanuatu’s colonial history.

This chapter begins by considering Vanuatu’s initial experiences with employment, both prior to colonisation and in colonial times. The purpose of this is to identify the impact that this history has on contemporary understandings of the employment relationship and the place of law within this relationship. The broader post-colonial colonial dynamic is also considered. This leads to a more detailed examination of Vanuatu’s post-Independence policy directions, which display a number of tensions between different visions of development. The chapter concludes by establishing a

4 Kaluat, above n 1. See also, ILOTV, ‘Reforming Labour Law Legislation in Vanuatu’ (8 Dec 2011) http://www.youtube.com/watch?v=zGsAFOWORQE&feature=player_embedded (Accessed 20 May 2012) which begins by stating that Vanuatu has not reformed its labour laws since Independence. 5 For instance, Kiribati’s Employment Ordinance [Cap 30] was made in 1966; Tuvalu’s Employment Ordinance [Cap 84] was made in 1966; Solomon Islands’ Labour Act [Cap 73] was made in 1960; and Fiji’s Employment Ordinance [Cap 92], which was replaced in 2007 by the Employment Relations Promulgation, was made in 1960. 6 Vanuatu gained Independence in 1980. The three “core” employment laws, the Employment Act [Cap 160], the Trade Unions Act [Cap 161] and the Trade Disputes Act [Cap 162] were all passed in 1983. The Minimum Wage and Minimum Wages Board Act [Cap 182] was passed in 1984, The Labour (Work Permits) Act [Cap 187] in 1985, and the Health and Safety at Work Act [Cap 195] and Vanuatu National Provident Fund Act [Cap 189] in 1986. The Workmen’s Compensation Act [Cap 202] was passed in 1987 but not brought into force until 2004. 134

context-specific explanation of the motivations for the 2008 reform, which is based upon a post-colonial narrative of employment relationships.

INITIAL EXPERIENCES OF EMPLOYMENT

Pre colonisation

In Vanuatu (known as the New Hebrides prior to Independence) the first widespread experience of employment was one of indentured labour. When demand for labour to work on cotton and sugar plantations in Queensland increased in the 1860s, the Melanesian islands as yet unclaimed by colonial powers were seen as an ideal source of labour. The New Hebrides and Solomon Islands provided the bulk of the indentured labourers in Queensland and also contributed labour to plantations in Fiji. More than 50,000 people were recruited from the New Hebrides to work in Queensland and Fiji between the years of 1863 and 1907.7 This trade in labour, which came to be known as blackbirding, was associated with misrepresentations by recruiters, kidnapping of unwilling labourers and poor working conditions. It was in large part due to the excesses of the labour trade that Britain began to exert more control in the region, passing the Pacific Islanders Protection Act 1872 and Pacific Islanders Protection Act 1875 in an attempt to control recruitment of labour from uncolonised Pacific islands.8 Whilst revisionist histories9 and ni-Vanuatu oral histories10 of the Melanesian labour trade suggest that people were not always coerced into becoming labourers and were not always subject to harsh conditions on plantations, ‘the popular image [is] of the Queensland labour trade, with its focus on

7 Doug Munro, ‘The Origin of Labourers in the South Pacific: Commentary and statistics’ in Clive Moore, Jacqueline Leckie and Doug Munro (eds), Labour in the South Pacific (1990) xxxix, tables 11, 13, 14, xlviii – l. 8 These Acts developed a system of licensing British vessels that carried labourers and created various labour trade related offences. 9 Munro traces historical discourse on the Melanesian labour trade, noting that prior to the 1960s history was dominated with accounts of British regulation to suppress kidnapping. However, in the 1960s revisionist histories which viewed Pacific islanders as proactive rather than passive emerged, and this led to an account of the labour trade that was ‘less European-dominated and oppressive than had previously been allowed’ (Doug Munro, ‘The Labour Trade in Melanesians to Queensland’ (1995) 28(3) Journal of Social History 609, 611). 10 See, for example, Anna Naupa, ‘Anna Naupa on Vanuatan History’ (Australian Government, Screen Australia Digital Learning) (2005) http://dl.screenaustralia.gov.au/module/228/ (Accessed 9 April 2010)). 135

kidnapping and illtreatment’.11 Certainly there can be no doubt that there were imbalances of knowledge between the recruiters and the Melanesians who were being recruited but had never in the past experienced working for wages or indeed had experienced anything beyond a local subsistence-based lifestyle.

Colonisation

As more settlers began to establish plantations in un-annexed Pacific Islands including those of the New Hebrides group internal labour trades also developed, with the New Hebrides group having one of the largest internal labour trades.12 In 1877, as the labour trade continued, the British established the Western Pacific High Commission (WPHC), which provided a local supervisory and enforcement agency for the Pacific Islanders Protection Acts.13 The WPHC was too far removed to retain effective control in the New Hebrides and also did not have jurisdiction over French subjects, who had begun to settle in the New Hebrides in increasing numbers.14 In 1887 Britain and France signed a Convention to establish a Joint Naval Commission in the New Hebrides15 and in 1906, the Condominium was established.16 Under this arrangement the islands became a region of joint influence of Great Britain and France and both British and French administrations were maintained. In addition to establishing courts and other administrative bodies, the Order in Council Providing for the Exercise of His Majesty’s Jurisdiction within the New Hebrides in accordance with the Convention of October 20 1906, as amended by Notes of August 29 1907 1907 (the New Hebrides Order in Council 1907) which recorded the terms

11 Munro, above n 9, 619. 12 No accurate statistics on the 19th century internal labour trade, but between 1908 and 1941 it is estimated that over 54,000 ni-Vanuatu involved in internal New Hebrides labour trade. (Munro, above n 7, xiv.) 13 Deryck Scarr, Fragments of Empire (1967) chapter 2. See also Western Pacific Order in Council 1877, particularly preamble and clauses 26 and 27. 14 Increase in French settlement was driven, in part, by the impact of the Pacific Islanders Protection Acts 1872 and 1875 as they regulated British inter-island recruitment within the New Hebrides. British subjects who were unable to easily recruit labour therefore began to sell plantations to French settlers who were looking for opportunities beyond the French penal colony of and were unhindered by such recruitment laws, or began trading under French Colours. See Katherine Sterling Kerr Cawsey, Making of a Rebel: Captain Donald McLeod of the New Hebrides (1998) 138 – 139. 15 Convention between Britain and France respecting New Hebrides, November 16, 1887. This was followed, in January 1888 by the Declaration between Britain and France of the establishment of a Joint Naval Commission 1888. 16 Convention between Great Britain and France respecting the New Hebrides, October 20 1906, ratified January 9 1907. 136

of the Condominium provided substantive rules in relation to land, the supervision of shipping, the recruitment of native labourers and arms ammunition and intoxicating liquor.17

The labour provisions in the New Hebrides Order in Council 1907 were similar in approach to the penal labour laws that had existed in England from medieval times until the late 19th century.18 The first of these statutes compelled able-bodied people to work19 and allowed imprisonment of people who refused to work.20 Under the New Hebrides Order in Council 1907 labourers were not free to leave employment, and ‘any labourer who ha[d] given his employer just cause of complaint in respect of his conduct or work [could], at the instance of his employer, be punished by the Resident Commissioner concerned… by the imposition of extra work, by a fine, by prolongation of the term of engagement… or by a summary punishment not exceeding one month’s imprisonment.’21

17 ‘Provisions relating to land’ were contained in Articles XXII – XXVII; ‘Supervision of Shipping’ was regulated by Articles XXIII – XXX; ‘Recruitment of Native Labourers’ was regulated by Articles XXXI – LVI; and ‘Arms, Ammunition and Intoxicating Liquors’ were regulated by Articles LVII – LXI. 18 The first statutory regulation of the employment relationship in the English legal system, the Ordinance of Labourers 1349 was intended to moderate the social upheaval caused by the Black Death. The Black Death, or bubonic plague, which ‘led to the demise at a single stroke in the mid- fourteenth century of at least a third of the population of the known world.’ (John Hatcher, ‘England in the Aftermath of the Black Death’ (1994) 144 Past and Present 3, 3.) This crisis created a shortage of workers, which enabled workers to demand higher wages for their services. (For a brief overview of the context in which the plague occurred, and the broader impacts of the plague see also Judith M Bennett and C Warren Hollister, Medieval Europe, A Short History (10th ed, 2006) 325 – 335.) The policy of regulating labour to the detriment of workers’ freedoms continued for the next 500 years or so. Laws that, amongst other things, compelled labour, limited labour mobility, set maximum (rather than the now common minimum) wages, and prohibited combinations of labourers, were passed. (Elaine Clarke, ‘Medieval Labor Law and English Local Courts’ (1983) 27(4) The American Journal of Legal History 330 provides a list of legislation from 1349 – 1445 (349 – 353). See also E Merrick Dodd, ‘From Maximum Wages to Minimum Wages: Six centuries of regulation of employment contracts’ (1943) 43 Columbia Law Review 643 for later laws, although Dodd does not comprehensively list all laws.) 19 The Ordinance of Labourers 1349 provided ‘every man and woman… of what condition he be, free or bond, able in body, and within the age of threescore years, not living in merchandise, nor exercising any craft, nor having of his own whereof he may live, nor proper land, about whose tillage he may himself occupy, and not serving any other, if he in convenient service, his estate considered, be required to serve, he shall be bounden to serve him which so shall him require…’ 20 The Ordinance of Labourers 1349 provided ‘if any reaper, mower, or other workman or servant, of what estate or condition that he be, retained in any man's service, do depart from the said service without reasonable cause or license, before the term agreed, he shall have pain of imprisonment. And that none under the same pain presume to receive or to retain any such in his service.’ 21 Article XLVIII New Hebrides Order in Council 1907. 137

However, unlike medieval English laws which could compel people to labour in the absence of a contract, recruitment of (most22) native labourers in the New Hebrides was controlled in order to try to ensure voluntariness.23 Further, initial contracts were limited to a maximum period of three years.24 Recruiters and employers were also subject to penalties if they breached the labour laws. Penalties for an initial offence were a fine of from 4 shillings to 20 pounds and/or imprisonment for a period ranging from 1 day to 1 month. For serious initial offences or second offences the right to recruit or engage labourers could be withdrawn for up to two years. Damages could also be awarded to labourers who were caused injury by breach of the laws.25 The New Hebrides Order in Council 1907 contained some other protective provisions. The recruitment of women and children was limited,26 hours of work were limited and no work, except for domestic work and the care of animals, could be required on a Sunday,27 workers had to be repatriated at the employers expense,28 and a minimum wage was established.29 Further Article XLIV outlined the duties of employers, which included that:

(1) Employers must treat their labourers with kindness. They shall refrain from all violence towards them. (2) They must supply them with sufficient food… (3) Employers must further provide their labourers with adequate shelter, the necessary clothing and medical care.

Despite the protective provisions the penal nature of the employment arrangements permitted under the New Hebrides Order in Council 1907, when viewed through a modern lens, seem uncomfortably close to slavery or forced labour. Whilst the

22 Natives who were recruited from within 10 miles of their workplace on contract of less than 3 months or who had been employed for more than five years and could speak a European language or the local trade vernacular (which came to be known as Bislama) could be engaged without restriction. (Article LV New Hebrides Order in Council 1907.) 23 In particular only licensed recruiters could recruit labour (Article XXXI New Hebrides Order in Council 1907) and the Resident Commissioner was to be informed of all recruitments and sign all employment contracts (Article XXXIX New Hebrides Order in Council 1907). 24 Article XXXIV New Hebrides Order in Council 1907. In the case of labourers who were renewing their contracts without any break, there was a mechanism to ensure that the contract was being entered into of the labourer’s free will (Article XL New Hebrides Order in Council 1907). 25 Article LVI New Hebrides Order in Council 1907. 26 Article XXXIII New Hebrides Order in Council 1907. 27 Article XLV New Hebrides Order in Council 1907. 28 Article LI. 29 Article XLVI. 138

United Kingdom government of the time stressed that protections regarding the recruitment of native labour in the New Hebrides were the “best they could get” during negotiations with France as to the terms of the Condominium,30 and were suitable for the context in which they were made, 31 even at the time the laws were made they were considered to be too harsh and oppressive in some quarters. For example, the Australian colonial government, in its response to the text of the Convention, argued that the provisions ‘are not sufficiently favourable to the labourer and are too favourable to the employer of indentured labour.’32 Whilst the New Zealand and Australian response seems to be at least partly prompted by a concern about the lack of consultation by the United Kingdom with the colony,33 the Opposition in the United Kingdom House of Commons seized upon this to mount an attack on the Government, noting that the hours of work were long, the ban on hiring children was based upon size34 and that the monthly minimum wage was considerably less than that paid to Chinese indentured labourers in the Transvaal.35

As with the pre-colonial recruitment of Melanesian labour to Queensland, it is too simplistic to posit the early colonial employment relationship as that of a foreign

30 ‘We were making the best bargain we could, really for the protection of these savage tribes – cannibals and many other charming types of that sort – and, what is regarded as the terms we inflicted upon them is really the best terms that we could get for the protection of these people’ (United Kingdom, Parliamentary Debates, House of Commons, 12 February 1907, 89 (Sir Campbell- Bannerman)). 31 ‘[T]hese are not provisions which are being made for administering a Labour Ordinance in a highly developed, highly civilised State. They are provisions which are being made in islands in which nothing but anarchy prevailed… by contract with the system of anarchy that they replace, they constitute a great and undeniable advance towards a humane system of labour and control throughout the island’ (United Kingdom, Parliamentary Debates, House of Commons, 12 February 1907, 138 (Mr Churchill)). The reality of having to deal with a foreign power (France) in developing the law was also acknowledged (139). 32 United Kingdom, Parliamentary Debates, House of Commons, 12 February 1907, 76 (Mr Balfour)). 33 Ibid. See also ‘Thursday, January 10, 1907’ The Argus (Melbourne, Australia) 10 January 1907, 4 http://newspapers.nla.gov.au/ndp/del/article/10608697?searchTerm=deakin+blue+book+new+hebride s+labour (Accessed 10 January 2011); ‘Our London Letter’ Brisbane Courier (Brisbane, Australia) 23 March 1907, 6 http://newspapers.nla.gov.au/ndp/del/article/19481277?searchTerm=deakin+blue+book+new+hebride s+labour (Accessed 10 January 2011). 34 United Kingdom, Parliamentary Debates, House of Commons, 12 February 1907, 76 (Mr Balfour)). 35 United Kingdom, Parliamentary Debates, House of Commons, 12 February 1907, 148 and following (Mr Lyttleton)). The attacks again need to be put into the political context of the time, with the Opposition attacking the newly elected Liberal party. The view of the Opposition, who had been attacked over the issues of wages for Chinese in the Transvaal was that the Government was guilty of hypocrisy; ‘they won a general election by representing indentured labour as slavery, or forced labour; but a year has not passed over them before they set their seal again to a system of indentured labour’ (United Kingdom, Parliamentary Debates, House of Commons, 12 February 1907, 76 (Mr Balfour)). 139

masta exploiting local labour within a legal framework that enabled exploitation, although harsh or unfair treatment did undoubtedly happen in some situations. Within the introduced cash economy, indigenous workers who had no tradition of wage labour were the weaker party in the sense that they would have been open to exploitation due to an imbalance of knowledge. Further, the employment laws, whilst they did contain some protective elements, were essentially penal, with law being used by the politically powerful to maintain their dominance.

Historical experiences and the contemporary perception of employment law

The pre-colonial experience of the labour relationship can be characterised as a relationship in which recruiters and employers exploited indentured labourers. Similarly the first experience of colonial labour law was that law enabled foreign interests by allowing exploitation by employers, who were all foreigners, of local workers. The contemporary perception that employment law is “colonial” can be read as carrying the connotation that it is perceived to be “colonial in intent” in that it enables foreign interests by allowing exploitation by employers (who is the private formal sector are predominantly foreign) of locals.36

THE BROADER POST-COLONIAL DYNAMIC

State law vs kastom

Colonial labour laws were not the only laws that enabled colonisers to control and exploit the indigenous population of the New Hebrides and the resources of the colony, with (at least some parts of37) the local population experiencing ‘social and political problems and feelings of disorientation as a result of their chafing against European supremacy and colonial rule. The loss of their political independence, the plundering of their land by European plantations for profit and the feeling that the administration, missions and planters did nothing but make them feel like slaves,

36 It can be noted that penal labour relations were banned in the New Hebrides in 1969 by the Joint Regulation to Control Employment 1969. 37 Whilst British settlers and Anglophone ni-Vanuatu tended to be supportive of independence, French settlers and francophone ni-Vanuatu tended to be opposed to Independence. See Howard Van Trease, ‘Colonial Origins of Vanuatu Politics’ in Howard Van Trease (ed) Melanesian Politics: Stael Blong Vanuatu (1995) 3. 140

resulted in the widely held belief that the whites’ material wealth… had been misappropriated [from the indigenous population].’38 The rise of such sentiments was matched by international approbation of colonisation, as articulated in the United Nations Declaration on the granting of independence to colonial countries and peoples.39

The New Hebrides National Party (NHNP), formed in 1971, was the first established political party. Nationhood was seen as being the end goal of decolonisation, with the national purpose being to protect and project the cultural past. The ideological underpinnings of nationhood, with their insistence upon cultural homogeneity,40 inevitably affected the political imagination. Despite the fact that the group of islands that now make up Vanuatu did not form a single entity until they were defined as the New Hebrides by colonisers, a single New Hebridean people and New Hebridean culture, usually expressed in Bislama as kastom became the justification for the independence movement.41

As discussed in chapter one, on gaining Independence in 1980 Vanuatu adopted a Constitution that established a representative democracy. It also recognised the individualistic human rights that are at the heart of modern Western democracies.42

38 , ‘Government in Vanuatu: The Place of Culture and Tradition’ in Ron Crocombe, Uentabo Neemia, Asesela Ravuvu and Werner Vom Busch (eds), Culture and Democracy in the Pacific (1992) 49, 51. It can be noted that in the Pacific, interest in decolonisation was frequently generated by imperial powers (in Vanuatu the British, as the French resisted decolonisation) who were influenced by international pressure and/or found that operating colonies was a drain on resources rather than a benefit. (See, for example, Uentabo Neemia, ‘Decolonisation and Democracy in the South Pacific’ in Ron Crocombe, Uentabo Neemia, Asesela Ravuvu and Werner Vom Busch (eds), Culture and Democracy in the South Pacific ((1992) 1, 5 -8) The extent to which ni-Vanuatu were dissatisfied with colonisation prior to these changes in international attitudes towards colonisation is difficult to determine. Regardless of who was the initial “driver” of decolonisation in Vanuatu Sokomanu’s statement is indicative of the popular current understanding of the decolonisation movement. 39 UNGA Resolution 1514 (XV) 14 December 1960. 40 For discussion of the ideology of nationhood see Anthony D Smith, Nationalism: theory, ideology, history (2001) Chapter 1. As an example of how culture was constituted as a reactionary symbol to be used as the basis for political mobilisation for decolonisation , one of its first public statements of the New Hebrides National Party began ‘Our aims in forming a National Party are to preserve the New Hebridean people; their culture and their ways of life are in danger of large scale settlement by Europeans’ (quoted in Van Trease, above n 37, 21.) 41 The construction of kastom in the path to Independence is discussed further in William Miles, Bridging Mental Boundaries in a Postcolonial Microcosm (1991) chapter two. 42 Article 5(1) of the Constitution of the Republic of Vanuatu provides a Bill of Rights that recognises the right to: ‘(a) life; (b) liberty; (c) security of the person; (d) protection of the law; (e) freedom from inhuman treatment and forced labour; (f) freedom of conscience and worship; (g) freedom of expression; (h) freedom of assembly and association; (i) freedom of movement; (j) protection for the 141

Also as discussed in chapter one, the concepts underpinning a modern democratic State and kastom form a potentially precarious foundation for the country, as the values present in each are not readily reconcilable. The democratic Westminster style State is based upon values including centralised authority, individualism (and human rights based upon individualism) and membership based upon voluntary citizenship. These concepts are “foreign” to kastom, which is a Stateless order that reflects communitarian values in which membership is based upon kinship. This clash in values may result in the foreign structure of the independent State and its institutions being perceived as destabilising to kastom.

The tension surrounding State law and kastom can be used to illustrate the general tension between State and kastom. Throughout the Pacific the relationship between State law and kastom has tended to settle into a dichotomy between modern/foreign and traditional/local.43 Rousseau argues that the dominant perception is that ‘the Vanuatu state legal system finds itself in a dichotomous position in relation to “introduced” law and indigenous practices, beliefs and expectations.’44 Forsyth observes that a ‘problem is that many ni-Vanuatu see the court system as being a foreign system. The general distrust and lack of ownership of the system are illustrated by the fact that many people refer to the courts as ‘kot blong waetman’ (white man’s court).’45

privacy of the home and other property and from unjust deprivation of property; (k) equal treatment under the law or administrative action, except that no law shall be inconsistent with this sub-paragraph insofar as it makes provision for the special benefit, welfare, protection or advancement of females, children and young persons, members of under-privileged groups or inhabitants of less developed areas.’ These rights are derived from the Unviersal Declaration of Human Rights, which in turn are derived from 18th century statements of rights including the American Constitution and the French Declaration of the Rights of Man and the Citizen. These statements of rights were based on a liberal ideology that valued the rights of the individual. (See Anita Jowitt, ‘The Notion of Human Rights’ in Anita Jowitt and Tess Newton Cain (eds) Passage of Change: Law, society and governance in the Pacific (2002) 185, 193.) 43 Olson notes that theorists ‘tend to conceptualise law and custom in terms of opposition of normative structures’ (MD Olson, ‘The Politics and poetics of social transformation in Samoa’ (2000) 45 Journal of Legal Pluralism and Unofficial Law 19, 19). See also Jonathan Aleck, ‘Beyond Recognition: Contemporary jurisprudence in the Pacific Islands and the common law tradition’ (1997) 7 Queensland University Law Journal 137. 44 Benedicta Rousseau, ‘“This is a Court of Law, Not a Court of Morality”: Kastom and custom in Vanuatu state courts’ (2008) 12(2) Journal of South Pacific Law 15, 15. 45 Miranda Forsyth, A Bird that Flies with Two Wings: The kastom and state justice systems in Vanuatu (2009), Chapter 5 http://epress.anu.edu.au/kastom/html/frames.php (Accessed 1 February 2011)). 142

State law, which adopted the form and part of the content of the laws of colonial and imperial authorities, is “foreign” and seen to represent “western” ways of doing things. It is perceived as an impingement on kastom. This post-colonial dynamic permits, and may even promote, a narrative of resistance to State laws as being foreign, whether or not these laws were made by colonial authorities or by the post- colonial legislature. It also reinforces the contemporary perception of employment law as being “colonial in intent” in that it is derived from a foreign system which is inherently hostile to kastom/local interests.

Kastom vs development

The tension between the “foreign State” and kastom is particularly apparent in the contemporary discourse on development (as an aspect of the nation-State) in the Pacific:

Throughout the South Pacific… notions of “culture” and “development” are very much alive… Not infrequently the terms are counterposed, and development, along with “economic rationality”, “good governance” and “progress” is set against culture or “custom”, “tradition” and “identity”. The decay of custom and impoverishment of culture are often seen as wrought by development.46

One of the reasons for this is that in the Pacific, as elsewhere, Independence is ‘a matter of international law, rather than empirical reality. Post-colonial international relationships... [are determined by] the enduring realities of smallness, remoteness, limited resources and the longstanding interests of larger countries.’47 In particular economic dependence means that no Pacific country has economic policies that are entirely autochthonous. There are two primary external factors that arise from economic dependence.

First, whilst Vanuatu is not heavily reliant on borrowing from international financial institutions (IFIs), the World Bank, the International Monetary Fund (IMF) and the

46 Anthony Hooper, ‘Introduction’ in Anthony Hooper (ed), Culture and Sustainable Development in the Pacific (2000) 1, 1. 47 Barrie MacDonald ‘Decolonisation and beyond’ (1986) 21(3) Journal of Pacific History 115, 115. 143

Asian Development Bank (ADB) all have a policy making presence in Vanuatu.48 As IFIs often make loans conditional upon a country undertaking particular economic reforms the policy of IFIs can be a significant influence on Vanuatu’s domestic development policy.

Second, Vanuatu relies significantly on aid, with about 25% of gross domestic product (GDP) coming from aid donors in 2009.49 ‘Australia and New Zealand are key Pacific players’50 in Vanuatu aid. The European Union (EU) consciously assumes a “background role” and its Pacific aid strategy aims to enhance development cooperation with Australia and New Zealand.51 Other aid donors include France, Japan, China and the United States of America.These countries are not, however, noted for providing economic policy input into Vanuatu (although France has had considerable impact on language policy). Australia is the largest aid donor to Vanuatu, with funding in 2009-10 estimated to be AU$56.3 million.52 Whilst aid is usually not explicitly conditional in the same way that loans are, aid donors frequently target aid to specific programmes. Vanuatu can therefore find its development policy influenced by the policy direction of donors.

As discussed in chapter one the IFIs share a similar policy direction can be considered a “free market vision of development”. This direction is shared by Australian aid agencies. Its Pacific 2020 report identified investment and private sector development as the central “growth factor” for achieving development. There are six priorities for action in achieving increased investment and private sector development,53 including ‘reforming legal and regulatory systems… [as the] Pacific

48 The ADB has the most visible influence on Vanuatu’s policy through its association with Vanuatu’s Comprehensive Reform Programme and subsequent Priorities and Action Agenda (discussed further below). The World Bank has two main programmes in Vanuatu at the moment, one that is aimed at reducing barriers to private sector development and a second that is focused upon research to enhance access to justice. The IMF’s activities focus on regulation of the financial sector and stability within the Reserve Bank. 49 Asian Development Bank, Vanuatu Economic Report 2009: Accelerating reform, executive summary (2009) 6. 50 European Union, ‘EU Relations with the Pacific Islands – A Strategy for a strengthened partnership’ (2006) 4. 51 Ibid. 52 Australian Department of Foreign Affairs and Trade, ‘Vanuatu Country Brief’ http://www.dfat.gov.au/geo/vanuatu/vanuatu_brief.html (Accessed 10 January 2011). 53 AusAID, Pacific 2020: Challenges and Opportunities for Growth (2005) 43 – 44. 144

islands can ill afford cumbersome business regulations to add to their intrinsically high cost structures.’54

The “free market vision” of development tends to be viewed with suspicion in Vanuatu (as well as in other Pacific countries and globally amongst developing countries55). One reason for this is that it is seen to undermine kastom, or the traditional economy:

…the government is primarily concerned with obtaining more cash in order to fulfil its mandate to provide and extend services to the population. As the traditional economy is not a source of cash, very little attention has therefore been paid to it. This Government imperative is given further support by Vanuatu’s traditional bilateral partners (Australia, France, the EU, New Zealand), as well as from multilateral agencies such as the World and Asian Development Banks, all of which encourage the adoption of pro-foreign investment and pro-monetarisation policies to increase GDP at the expense of the traditional economy.56

One of the largest conflicts between the “free market vision” of economic development and kastom arises in relation to approaches to land policy,57 which view customary land tenure as a hindrance to development:

Customary forms of land ownership and kinship traditions of sharing… have served [Pacific countries] well to avoid absolute poverty and they are an informal social security mechanism. However, they also constrain market- based activity, by reducing the incentive to work hard, save and engage is

54 Ibid, 44. 55 At a global level see, for example, Joseph Stiglitz, Globalization and its Discontents (2002). At a regional level the Pacific Network on Globalisation (PANG), which focuses mainly on trade issues, explains how IFIs including the World Bank promote the free trade agenda at the expense of Pacific culture and economies. See, for example, PANG, ‘Making Waves: Opportunities for Reclaiming Development in the Pacific’ (Report for the Annual Pacific Civil Society Organisation (CSO) Forum, Auckland New Zealand, August 12-14 2008). 56 Ralph Regenvanu, ‘The Year of the Traditional Economy, What is it all About’ (2007) 5 http://www.vanuatuculture.org/documents/CustomEconomyBlurb.doc (Accessed 10 September 2011). 57 It can be noted that the IFIs all have policies in relation to indigenous peoples (see United Nations Development Programme, Indigenous Peoples and the Human Rights-Based Approach to Development: Engaging in Dialogue (2007)). However, these policies are not widely known and do not enter the discourse about or affect perceptions of IFIs activities in Vanuatu. 145

entrepreneurial activity… The key issue is not one of changing the land tenure system per se, but of unlocking land tied up in unproductive uses because of inflexible rules governing its ownership and use. This involves improving land leasing mechanisms…58

In Vanuatu, where alienation of land was a central issue in the independence movement, and the restoration of land to its customary owners was a central outcome of Independence, such a policy is perceived as being profoundly disrespectful of Vanuatu’s kastom59 and independent status.60 Resistance to free market economic development policies that promote alterations to customary land tenure also contributes to ideological resistance to other policies that are seen to align with this free market vision or are promoted by the same agencies that promote changes to customary land tenure.

More generally the outside influence can be seen as an unwarranted interference, or economic neo-colonialism.61 Suspicion of neo-colonialism is furthered by the emphasis on the role of foreign investment in the free market vision of development because colonial investment was foreign. Any encouragement of increased foreign presence via investment therefore may be perceived as increasing external influence. Australian aid activities are also, at times, subject to suspicion due to perceptions of

58 World Bank, Enhancing the role of government in the Pacific Island economies (1998) 14 – 15. 59 The centrality of customary land tenure to custom is well recorded. For instance, Kavaliku notes, ‘For many experts the only remedy for the slow pace of… development… is to change the land tenure system… In many cases the theory may be correct, but in the Pacific island countries, one's soul and one's own identity is tied up with land’. (Langi Kavaliku, ‘Culture and sustainable development in the Pacific’ in Anthony Hooper (ed), Culture and Sustainable Development in the Pacific (2000) 22, 26.) 60 For example Regenvanu observes that the Constitution guarantees that ‘land use should be determined by customary owners according to customary rules’ and that, because of the fluid nature of customary law it is not possible to determine customary land owners. However, ‘determining customary land ownership has become an obsession of government, reflecting its own obsession with promoting capitalist development.’ (Ralph Regenvanu, ‘Issues with Land Reform in Vanuatu’ (2008) 12(1) Journal of South Pacific Law 63, 67.) Daley, discussing the current AusAID supported land reform programme, which is considering ways of determining customary ownership, observes that ‘The intersection of land reform agendas and strategies for economic growth based on foreign investment is dangerous territory, particularly where donors have strong influence and clear trade and commercial interests in the region.’ (Lara Daley, ‘Hijacking development futures: “Land development” and reform in Vanuatu’ in Tim Anderson and Gary Lee (eds), In Defence of Melanesian Customary Land (2010) 34, 38 http://www.aidwatch.org.au/sites/aidwatch.org.au/files/Lara%20Daley_0.pdf (Accessed 10 June 2012).) Nari provides a good overview of the tensions between land, custom and development policy in Vanuatu (Russell Nari, ‘Land Tenure and Resource Management: A major challenge in Vanuatu’ (2000) 15(2) Pacific Economic Bulletin 1.) 61 See PANG, above n 55. 146

illegitimate interference by Australia within Vanuatu.62 This perceived neo- colonialism creates further ideological resistance to policies derived from the free market vision of development.

Summary

The broader post-colonial environment maintains suspicion of “foreign-ness”. This suspicion can be displayed through mistrust of the intentions of State institutions, such as law, which is perceived to primarily be both made by and for waet man. It can also be displayed through mistrust of development, particularly a model of private sector led development which is based on free market or capitalist ideals. This model of development is particularly problematic for two reasons. First, it ‘has not been uncommon to equate the private sector with the foreign sector. Such misconceptions have tended to distort attitudes and policies towards private sector

62 For instance, in 2004 there were allegations of interference in domestic politics by Australia in relation to a prosecution by then MP Barak Sope. After Sope successfully argued that he could not be prosecuted for one crime twice he, on behalf of the government demanded that two Australian Federal Police Officers attached to the Australian High Commission be removed from Vanuatu. Australia’s Minister for Foreign Affairs Alexander Downer then indicated that the removal of the Australian Federal Police could affect Australia’s aid to Vanuatu and the Australian Department of Foreign Affairs and Trade issued a warning to Australian travellers on 16 September to be aware of civil unrests in Vanuatu. This notice was reissued on 7 October, despite total absence of any civil unrest. That same year there was an attempt to have then Prime Minister arrested at in relation to charges of contempt of court. The alleged contempt came from comments made by Vohor in Parliament on September 1 implying that the judiciary was acting corruptly, or that Chief Justice Lunabeck was a “pikinini blong waet man”. Following these events the Police Commissioner was suspended and the AusAID advisor attached to the Office of the Public Prosecutor asked to leave immediately. (See Anita Jowitt, ‘Vanuatu Political Review’ (2005) 17(2) Contemporary Pacific 456, 459 – 463.) In 2008 allegation of illegitimate interference with Vanuatu’s sovereignty by Australia were again raised following the arrest of Vanuatu citizen Rob Agius in Australia on allegations of involvement in a tax evasion scheme. After Agius was arrested the Australian Federal Police (AFP) raided numerous business houses and properties in Port Vila and seized a variety of records. The actions of the AFP were seen by many as interference with Vanuatu’s sovereignty and a direct attack on Vanuatu’s financial services sector. (See, for instance, ‘AFP overstepped the mark with Finance Centre raids, says Vanuatu Finance Minister’ Radio New Zealand International 19 May 2008 http://www.rnzi.com/pages/news.php/news.php?op=read&id=39844 (Accessed 20 January 2011); Xavier La Canna, ‘Federal Police Anger Vanuatu Chiefs’ The Age Online 6 June 2008 http://news.theage.com.au/world/federal-police-anger-vanuatu-chiefs-20080606-2mmv.html (Accessed 20 January 2011); and, more recently, Thomson Pakoa Matokai Kokona ‘Letter to the editor’ Vanuatu Daily Post Online 1 December 2010 http://www.dailypost.vu/content/slo-slo-yumi- slo-ko-ko-slo-slo-yumi-stap-spit-ko-ko-naoia-yumi-spit-bitim-mak?page=10 (Accessed 20 January 2011). In late 2010 the Australian High Commission was again required to defend against allegations of interference by the AFP (Len Garae, ‘Pilbeam and Team Set Record Straight’ Vanuatu Daily Post Online 16 November 2010 http://www.dailypost.vu/content/pilbeam-and-team-set-record- straight?page=2 (Accessed 20 January 2011). 147

development.’63 Second, in Vanuatu this model of development is promoted by IFIs and the dominant aid donor, Australia. This can lead to perceptions that the model is externally driven, and interferes with sovereignty, or is neo-colonial.

This post-colonial dynamic, combined with the pre-colonial and colonial experience of the employment relationship and employment law contributes to a narrative of “State = foreign = (neo) colonial”, which in turn fosters a narrative of embedded suspicion of State employment laws as being primarily to facilitate “foreign interests” at the expense of “exploited local employees”.

GOVERNMENT POLICY

The post-colonial suspicion of foreign influence, the tension between kastom and development is apparent in government policy. Whilst, as discussed below, encouragement of private sector led development is one of the Vanuatu government responses to the issue of unemployment, the nature of what private sector led development is and how best to achieve it remains contested.

“Self reliance” & “Melanesian socialism”: The first and second national development plans

From 1981 – 1996 Vanuatu implemented three 5 year development plans. These plans aimed at generating economic self reliance, defined as ‘a situation where import requirements are met by export earning and fiscal requirements are met from domestic revenues.’64 The first national development plan reflected the aspiration of the newly independent nation to value kastom and autonomy. As Vanuatu’s first Prime Minister, Hon. Father Walter Lini, noted in the preface to the mid term review of the plan ‘[t]he future patterns of our society, which I have referred to elsewhere as ‘Melanesian Socialism’, must be based on not only the creation of income, employment and wealth, but its egalitarian distribution.’ The plan recognised that ‘[t]he people have their own customs, traditions, and culture which they would like

63 Andrew McGregor, Mark Sturton, Sitiveni Halapua, Private Sector development: Policies and programs for the Pacific Islands (1992) xiii. 64 Vanuatu National Planning and Statistics Office, Second National Development Plan 1987 – 1991 (1987) 8. 148

to see preserved. The Government will ensure that adverse imported social disruptions are minimised wherever possible.’65 The role of the private sector in achieving economic self-reliance was recognised.66 Foreign investment did not sit easily with self-reliance and the plan was limited in its endorsement of the place of foreign investment in generating private sector development, noting that it would only be encouraged ‘where necessary’67 and only where there was ‘full participation by ni-Vanuatu and that these investments benefit the nation.’68

The second national development plan continued this vision.69 Foreign investment was seen as being a necessary source of capital, and providing technological, management and entrepreneurial capacity.70 Again, however, foreign investment was not unequivocally endorsed. In particular the plan noted the need for increasing ni- Vanuatu participation in economic development,71 as well as noting the “two edged sword” of having expatriates in Vanuatu:

The beneficial role that expatriates play in the development of the country cannot be discounted. However, the expatriate presence has some undesirable influences. The demonstration effect of costly, imported consumption pattern and way of life of expatriates is causing some strain on the country’s resources.72

The distrust of foreign influence, which forms part of the broader post colonial dynamic, was inherent in these plans and their vision for development.

65 Vanuatu National Planning and Statistics Office, Mid-term review of first national development plan (1984) [1.21]. 66 Ibid, [1.20] and [1.24]. 67 Ibid, [1.24]. 68 Ibid, [1.20]. 69 Its preface noted that ‘ni-Vanuatu society is comprised of Melanesian Pacific peoples and that this society can best develop in its own way at its own pace and in a manner that ensures that the fabric of society is safeguarded from the adverse effects of a too rapid development process.’ (Vanuatu National Planning and Statistics Office, Second National Development Plan 1987 – 1991 (1987), preface.) 70 Ibid, [2.25] and [15.36]. 71 Ibid, [1.15]. 72 Ibid, [8.49]. 149

“Economic reality”: the third national development plan

The third national development plan, from 1992 – 1996, took a somewhat different approach. This was, in part, because a number of grave economic issues were becoming more apparent, including that ‘the quality of life for ni-Vanuatu, measured in real per capita GDP, has not improved at all since 1983… [and] nearly 100% of development activities undertaken in Vanuatu over the past 5 years… [being] funded through international development assistance.’73 In 1991 there was also a change of government, to one that had a different development philosophy.74 The third plan more closely aligned with a “free market vision of development”. It aimed to reorient the economy by ‘stimulating investments in export-oriented ventures including tourism; pursuing commercialisation and corporatisation wherever applicable in the public sector; and developing the marketing of traditional food crops.’75 One of the key policy areas to support this reorientation was the ‘adoption of [a] Foreign Investment Code to promote foreign investment.’76

The third national development plan therefore prioritised attracting foreign investment in a way that the previous two plans did not. Whilst this plan continued to refer to self-reliance, it also referred to economic reality, which forces choices between development activities, and the reality that ‘some developments generate revenue while others simply cost money.’77 Its pragmatic approach, that ‘decision making means choosing between various alternatives - not merely deciding when and how best to proceed with all options’,78 and its focus on economic issues, meant that the (more idealistic) self-reliance strategies based upon “Melanesian socialism” that had been articulated in the first two plans were not clearly present.

73 Vanuatu National Planning and Statistics Office, Third National Development Plan 1992 – 1996 (1992) 49. 74 See Michael G Morgan, ‘Political fragmentation and the policy environment in Vanuatu, 1980– 2004’ (2004) 19(3) Pacific Economic Bulletin 40; Anita Jowitt, ‘Vanuatu political review’ (2000) 12(2) Contemporary Pacific 519. The post-Independence government that as formed by the Vanua’aku Pati (VP) had been led by Father Walter Lini remained stable for the first 7 years. This party was Anglophone dominated. In 1987 Lini had a stroke and solidarity within VP began to crumble. In 1991 Lini lost his position following a vote of no confidence. In the national elections that year the Francophone dominated Union of Moderate Parties (UMP) was elected. 75 Vanuatu National Planning and Statistics Office, above n 73, 39. 76 Ibid, 40. 77 Ibid, 52. 78 Ibid, 53. 150

“Neo-colonial hijacking”: the CRP and PAA

Despite this plan, by 1997 mismanagement and corruption had driven Vanuatu to ‘the verge of bankruptcy’.79 It was “bailed out” by the Asian Development Bank, who funded Vanuatu’s Comprehensive Reform Programme (CRP), a structural adjustment programme that had 5 key aims:

1. Strengthening public institutions and enacting basic laws to create the framework for governance 2. Restructuring the public service to improve its effectiveness and efficiency 3. Strengthening the institution of Parliament 4. Strengthening the legal sector to ensure the enforcement of laws 5. Extensive financial and economic reform in order to improve performance of the economy and raise the standard of living.80

One of the mechanisms for achieving these aims was to increase foreign investment, and one of the first laws to be made under the CRP was the Vanuatu Foreign Investment Promotion Act [Cap 248], enacted in 1998. The purposes of this Act are:

(a) to promote and facilitate investment in Vanuatu by foreign investors; and (b) to provide an efficient, effective and transparent system for appraising and approving investments proposals by foreign investors; and (c) to promote investments by foreign investors that will materially benefit Vanuatu and its people by: (i) contributing to sustainable economic growth; and (ii) creating employment; and

79 Russell Nari, Comprehensive Reform Programme in the Republic of Vanuatu: A major challenge, through the eyes of a ni-Vanuatu’ (ANU Asia Pacific School of Economics and Government, Update Papers, June 2000) 3. Whilst Nari reflects the popular perception, the CRP documentation suggests instead that Vanuatu was not bankrupt but instead the catalysing issue was a ‘crisis in confidence in [the] government.’ (Vanuatu Office of the Prime Minister, Comprehensive Reform Programme (1997)). 80 Russell Nari, above n 79, 3. The CRP document noted 5 features: ‘renewal of the institutions of governance; redefined role for the public sector; improvements to public sector efficiency; private sector-led growth – including small business and the rural sector; [and] improved equity between sections of the population.’ (Vanuatu Office of the Prime Minister, above n 79, 4.) 151

(iii) utilising natural resources and, in particular renewable resources; and (iv) increasing the volume and value of exports; and (d) to facilitate and expedite investments through Ministries, Departments and other government bodies.81

In order to facilitate these purposes the Act established the Vanuatu Foreign Investment Promotion Authority (VIPA). The vision of this organisation is ‘to coordinate and facilitate the creation of [a] highly investor-friendly and welcoming atmosphere for foreign investment in Vanuatu’.82

The perception that the CRP was driven by foreign interests83 combined with the influx of foreign advisers to implement reforms under the CRP84 meant that ‘the belief that the CRP might endanger the sovereignty of ni-Vanuatu people became an enduring theme in political rhetoric.’85 The development priorities of the CRP also continued, and expanded, the economic reorientation found in the third national development plan. In doing so it moved policy further from the initial vision of development that carefully respected kastom which was reflected in the first two development plans.

The Priorities and Action Agenda 2006 - 2015 (PAA) is the current national development plan. The PAA does not differ much in general policy direction from the CRP, with the key priorities being:

(i) Private Sector Development and Employment Creation; (ii) Macroeconomic Stability and Equitable Growth; (iii) Good Governance and Public Sector Reform; (iv) Primary Sector Development (natural resources

81 Section 1. 82 Vanuatu Investment Promotion Authority, ‘About Us’ (undated) http://www.investvanuatu.org/vipa/vipa.html (Accessed 10 March 2010). 83 For example, ‘Barak Sope, the [then] leader of the Melanesian Progressive Party… stated that the CRP would cause suffering to the people of Vanuatu and “serves the interests of Australia and New Zealand”.’ (Michael G Morgan, ‘Political fragmentation and the policy environment in Vanuatu, 1980–2004’ (2004) 19(3) Pacific Economic Bulletin 40, 43.) 84 Michael G Morgan, ‘The Origins and Effects of Party Fragmentation in Vanuatu’ in Roland Rich, Luke Hambly and Michael Morgan (eds) Political Parties in the Pacific (2006) 117, 118. 85 Morgan, above n 74, 43. 152

and the environment); (v) Provision of Better Basic Services, especially in rural areas; (vi) Education and Human Resource Development; and (vii) Economic Infrastructure and Support Services.86

Aid donors, including AusAID87 and the ADB88 remain committed to the CRP as re- expressed through the PAA.

“RESISTANCE”: THE NATIONAL SELF-RELIANCE STRATEGY

The perception that the CRP and PAA were driven by foreign interests has led to ideological resistance which has been expressed in the form of an alternative development strategy based upon the traditional economy, or kastom ekonomi in Bislama. Within this alternative development strategy current government policy is viewed as eroding tradition:

Unfortunately, the current development model being promoted in Vanuatu, and the “development” policies and activities being enacted as a result, are directly destroying, displacing, eroding and threatening [the] traditional economy… Many policies of the Government and our international development partners place high value on cash and the outputs of the Western economy (eg, consumer goods), while either explicitly or implicitly denigrating the value of the traditional economy and its outputs.89

It is also viewed as being a deviation from the initial vision of development that Vanuatu held when first gaining Independence. For example, Regenvanu observes ‘that after 26 years of political independence, Vanuatu is economically more dependent and less self reliant than ever, and continuing to move further away from

86 Government of Vanuatu, ‘Priorities and Action Agenda 2006 - 2015’ 1, 7. 87 The five year Australian-Vanuatu Joint Development Strategy signed on 31 March 2005 is based on the PAA.’ Australian Department of Foreign Affairs and Trade, ‘Vanuatu country brief’ (undated) http://www.dfat.gov.au/geo/vanuatu/vanuatu_brief.html (Accessed 10 March 2010). 88 The ADB committed US$900,000 in 2004 and US$1,050,000 in 2005 – 2006 for (non-lending) technical assistance aimed primarily at developing the private sector. Asian Development Bank, ‘Summary Statement of Strategy’ (undated) http://www.adb.org/Documents/CSPs/VAN/2004/appendixes.pdf (Accessed 10 March 2010). 89 Regenvanu, above n 56. 153

the sustainability embedded in our traditional economy.’90 In making this point he refers to the vision of Father Walter Lini:

If Vanuatu decides to imitate other countries of the world, there can be no freedom in terms of being one’s own master with one’s own individual identity. But in deciding to be truly independent from any other country, whether within the region or afar, we shall have to work even harder to achieve this. The main effort will then be to really polish up our very own Pacific and Melanesian ideas, to make them the basis of unity in our own country and within our region and to give us the necessary strength and direction to choose wisely what we want and do not want for the future.91

Regenvanu’s implicit argument is that Vanuatu has becoming increasingly dependent due to “copying other countries” and their development strategies, rather than following Lini’s vision of drawing on Melanesian ideas to provide direction for the development agenda.

Vanuatu’s alternative development strategy is the Vanuatu National Self Reliance Strategy 2020, which arose from the Vanuatu Cultural Centre’s traditional money banks project.92 In March 2005 a workshop was held as part of this project. It produced ‘The Strategy to Recognise and Promote the Traditional Economy as the Basis for Achieving National Self Reliance.’93 This strategy document provided recommendations at the local (household, village and ward sub area and area), provincial and national levels. Most of the recommendations related to promoting the use of and the production of traditional wealth items and could comfortably co-exist with the PAA. For example, national level recommendations included requiring the Malvatumauri National Council of Chiefs to make a policy prohibiting the use of vatu in any customary exchange and requiring the ‘Ministry of Agriculture, Forestry, Fisheries and Livestock to protect, preserve and promote our customary resources,

90 Ibid. 91 Ibid. 92 For more information on this project and project documents see Vanuatu Cultural Centre, ‘Traditional Money Banks Project’ (undated) http://www.vanuatuculture.org/site- bm2/projects/050628_traditionalmoneybankproject.shtml (Accessed 10 February 2011). 93 Available from www.vanuatuculture.org/documents/WorkshopRecommendations.doc (Accessed 15 October 2012) 154

especially the different kinds of native pigs’.94 Fitting less comfortably with the PAA were recommendations to allow various government fees to be paid using custom wealth items rather than money, as the strategy document did not make suggestions as to how government could generate cash revenue to be able to fund service provision and infrastructure development. Whilst the strategy did not explicitly mention foreign investment, it did contain a recommendation that land should not be sold or leased. Access to land is consistently identified as a major factor hindering foreign investment, so this strategy implicitly contradicted aspects of the PAA that rely upon foreign capital to stimulate private sector development.

In July 2005 a national summit was held, which produced the ‘Vanuatu National Self Reliance Strategy 2020.’95 The Vanuatu National Self Reliance Strategy 2020 was more openly critical of the values underpinning PAA, with objectives 1 and 3 being:

1) There must be a full reform of the national governance system. This reform is required to recognise the predominant role traditional governance plays in the governance of contemporary Vanuatu society and to create a new system which recognises this traditional system and empowers it as the basis of a new system incorporating both Western and traditional systems of governance.

3) A national initiative must be undertaken to re-define the nation’s core values and principles. Once these are identified, all existing policy platforms of the Government (eg, PAA, CRP, Business Forum, [Rural Economic Development Initiative] REDI, Provincial Summit, etc) need to be merged into one national development plan for the nation.

It also advocated a more controlled approach to development in general,96 and private sector development based on foreign investment in particular97 than that found in the PAA.

94 Ibid, Recommendation 6. 95 Available from http://www.vanuatuculture.org/documents/Vanuatu%20National%20Self%20Reliance%20Strategy% 202020.doc (Accessed 10 February 2011). 155

The Vanuatu National Self Reliance Strategy 2020 can be considered an ideal vision. From this ideal vision an activity matrix for ‘the year of the traditional economy’ was developed. The content of this matrix was less ambitious than the content of the Vanuatu National Self Reliance Strategy 2020,98 and did not aim to achieve every objective in the 2020 strategy document. Many of the objectives related to providing awareness about, or promoting the use of, custom wealth items. Particular activities related to private sector development were ‘for the Cultural Centre and the Department of Economic and Social Planning to develop a “cultural impact assessment” as a national investment planning tool,’99 and ‘for the VIPA board to take into account the contribution projects make to national self reliance, sustainable use of the land and environment, and the traditional economy when approving new projects.’100 Land policy recommendations had been made in a national summit in 2006,101 so the activity matrix did not include detail about land activities, other than ‘to support the implementation of the recommendations of the National Land Summit.’102

The government supported the Vanuatu National Self Reliance Strategy, as articulated through the less ambitious activity matrix. It declared 2007 “the year of the traditional economy” and later extended this into 2008 as well.

96 Objective 31 of the Vanuatu National Self Reliance Strategy 2020 was ‘For [a] ‘cultural impact assessment’ to be developed and implemented as a development planning tool required for all new development initiatives. 97 Objective 25 of the Vanuatu National Self Reliance Strategy 2020 was ‘For chiefs to be represented on the VIPA Board and for the business operations of investors to be reviewed on an annual basis to monitor their contribution to national self reliance and sustainability and compliance with labour laws.’ 98 ‘Yia Blong Kastom Ekonomi 2007 Aktiviti Metriks’ (undated) www.vanuatuculture.org/documents/Matrix.pdf (Accessed 20 Feburary 2011). This document is in Bislama. My translations are in English in the text, with the Bislama original text in footnotes. 99 ‘Kaljoral Senta mo DESP blong divelopem “cultural impact assessment” olsem wan nasonal invesmen planning tul.’ 100 ‘Bod blong VIPA blong apruvum ol niufala projek blong ol investa folem sapot we projek ia i givim long tingting blong nasonal self rilaens, gudfala yus blong graon mo envaeronmen mo kastom ekonomi.’ 101 Twenty resolutions were finalised at this summit. These resolutions covered a range of matters, including the need to: review laws relating to determining the true custom owner of land; review land lease conditions; have leases in Bislama and to take more steps to ensure the true consent of the custom owners; regulate real estate agents through mechanisms such as a code of fair practice; revise land rents; incorporate social impact assessments into any proposed new leases; ensure public access to beaches, rivers and lakes is guaranteed; and create a national subdivison policy. See Regenvanu, above n 60, 66 – 67. 102 ‘Sapotem implimentesen blong ol rekomendesen blong Nasonal Land Samit’ (‘Yia Blong Kastom Ekonomi 2007 Aktiviti Metriks’, above n 98). 156

Summary

Vanuatu’s national development policies display the ideological tensions that form part of the broad post-colonial dynamic. The first two national development plans post-Independence reflected the idealism of this era. Caution regarding a “western” model of development was displayed. Limitation of foreign presence within the private sector was one aspect of this caution. The third national development plan deviated from this initial vision of development. It more closely aligned to a free market vision of development, and accepted the need for foreign investment as a driver of development. This change in direction was continued in the CRP and PAA, but the change has not been without resistance. Current government policy is treated by some with suspicion, as it is perceived as being anti-kastom and neo-colonial. The Vanuatu Self Reliance Strategy 2020, with its objective of “re-defining the nation’s core values and principles” articulates a perception that the post-Independence political agenda of self-reliance contained in the first and second national development plans was “hijacked” by the external influence of IFIs and aid donors. It can be seen as an attempt to return to the aspirations of the independence movement and the original political “roots” of Vanuatu.

AN IDEOLOGICAL DRIVER FOR THE 2008 REFORM?

Chapter three concluded by posing the question, if the 2008 reform was not clearly justifiable on the basis of substantive rationality, why was it made?

This chapter suggests the 2008 reform occurred because of an environment which allows for internalisation of the traditional narrative of the employment relationship. This narrative, outlined in chapter one, sees employees as relatively powerless in relation to employers, and therefore open to exploitation. The pre-colonial and colonial history of employment provided an experience which aligns with this narrative. (Indigenous) employees were generally weaker parties that were open to exploitation by their (foreign) employers. The colonial (foreign) law, by being penal in nature, facilitated the continuation of exploitative relationships. The historical experience of the employment relationship as a site of exploitation of the indigenous

157

population by foreign interests feeds into the broader post-colonial dynamic. In this broader dynamic foreign influence tends to be viewed with suspicion as being anti- kastom and/or anti-sovereignty.

This dynamic is reflected in development policy which, as a matter of economic pragmatism adopts an approach which aligns with a free market vision of development. Economic pragmatism does not, however, co-exist easily with an idealised vision of development which is based on (a romanticised notion of) indigenous values. This post-colonial suspicion of free market (capitalist) economic policies in turn reinforces the traditional narrative of employment, which sees capitalists as exploiters.

This helps to explains why the notion of decent work and adherence to international labour standards was adopted as a motivator for the 2008 reform, even though these concepts are also externally influenced and could therefore be positioned as neo- colonial interference with Vanuatu’s sovereign status. Certainly other international human rights laws have garnered this reaction throughout the Pacific. For instance, Jolly reports that at an early workshop to introduce the Convention for the Elimination of Discrimination Against Women (CEDAW) into the Pacific, ‘representatives from Fiji, the Cook Islands, and Western Samoa deplored the imposition of Western values, and suggested, contrary to foreign perceptions, that many aspects of traditional culture in their countries were controlled by women.’103 The Convention on the Rights of the Child provides another example. Despite widespread ratification in the Pacific ‘the Convention on the Rights of the Child is sometimes perceived as totally a “northern” matter.’104

The ILO driven decent work agenda has a complex positioning in Vanuatu’s post- colonial socio-political landscape. The traditional narrative of employment posits employment as a site of capitalist oppression and sees modern (rights based) employment laws as a mechanism for resisting, or at least ameliorating the worst

103 Margaret Jolly, ‘Nationalisms, Feminisms, and Globalization in the Pacific’ (2005) 52(1) Ethnohistory 137, 149. 104 UNICEF, ‘Legislative Reform and the Convention on the Rights of the Child (CRC) in the Pacific: A Sub-Regional Meeting, 25-28 August, 2008, Port Vila, Vanuatu’ (2008) 2 http://www.unicef.org/pacificislands/Final_Report_Pacific_Legislative_Reform_and_CRC.pdf (Accessed 10 February 2011). 158

excesses of, capitalist exploitation of employees. As well as this exploitative relationship between employers and employees being historically familiar in Vanuatu, capitalist economic development is often set in opposition to kastom. The ideological milieu in which the Decent Work Country Programme (DWCP) is situated aligns with kastom-based resistance to capitalist development. This alignment internalises the positioning of the DWCP, despite it being a largely external creation.

This positioning of the DWCP is supported by the fact that the Self Reliance Strategy specifically identifies the enforcement of the Employment Act and the implementation of the decent work agenda,105 which, on the face of it are clearly outside the scope of the non-cash and wage labour based custom economy. However, these objectives fit within a narrative of exploitation of indigenous employees by foreign employers.106

More broadly the State has failed to deliver on the promises and hopes of the independence movement. An easy scapegoat for this failure is development as defined by the capitalist economic system, which is often set in opposition to local custom and tradition. A narrative which draws on historical colonial relationships and “blames” inequities and lack of opportunity on (foreign) capitalist employers and colonial/foreign laws made for their benefit provides a story that can help to make sense of a very disorienting socio-economic environment.

Whilst it may be the case that some politicians fully appreciated the consequences of the 2008 reform and supported it regardless, to dismiss the actions of the Vanuatu legislature as irresponsible or incompetent is a harsh assessment. Instead, the post-

105 Specific objectives relating to employment contained in the Strategy are: 25)…for the business operations of investors to be reviewed on an annual basis to monitor their… compliance with labour laws. 27) For the Employment Act to be enforced. 28) For the Vanuatu Decent Work Plan of Action to be implemented as soon as possible. 106 Practice does not comfortably fit with the policy objectives that are influenced by this narrative, as there is evidence to indicate that ni-Vanuatu employers are less likely to comply with labour laws than expatriate or foreign employers. (Anita Jowitt, ‘Do employers comply with and use employment contract law? A study from Port Vila, Vanuatu’ (Regional Conference on Institutions, Globalisation, and their Impacts on Labour Markets in Pacific Island Countries, Suva Fiji, 17 – 19 October 2006).) This evidence suggests that the Strategy should be just as, if not more concerned, with monitoring indigenous-owned businesses compliance with labour laws. This is another example of ideology distorting policy. 159

colonial socio-political environment allows statements such as ‘employers have had it good for 25 years… employers are ripping off workers’107 to pass as “truth”. It also perpetuates the common, but false, perception that Vanuatu has “outdated colonial laws”. An employment law reform that is situated as promoting local interests and resisting foreign oppression is able to be uncritically accepted, with little regard to the “truth” of claims that current laws are inadequate, or consideration of the consequences of the reforms. This meant that economic policy relating to private sector led development was unable to provide any check on social policy relating to improving working conditions.

It can also be observed that lack of clarity within social policy as to what conditions of decent work are meant that there was no external social policy reference point that could be used as a check. International labour standards could possibly fulfil this role (and the government did, maybe, attempt to use them as a guide to the content of the 2008 reform). However, as the analysis in chapter two indicates there are competing and conflicting standards which limit the extent to which international labour standards can be used to evaluate whether existing laws provide adequate conditions or what ideal minimum conditions of decent work are.

It should be acknowledged that law-making is an inherently political process which can never be entirely divorced from ideology. However, as chapter three argues, the framework of the modern nation state requires law-makers to at least be able to ‘account for their actions through explanation and justification’108 and that part of this justification should include a reference to agreed policy goals. It may be expected that ideologically shaped political objectives will both affect agreed policy goals and debate about individual laws through discussion within the political process, both within and outside of Parliament.

However, in Vanuatu the nature of the broader political environment, discussed in chapter one, means that this debate is likely to be lacking. Party politics is not driven by policy, but is instead driven by personalities. Political platforms are often not

107 Untitled document presented by Acting Director General of Internal Affairs, George Pakoasongi, to employers at meeting regarding the Employment (Amendment) Bill 2008, Chantilly’s Hotel, Port Vila, 4 December 2008 (Unpublished, Undated). 108 DJ Galligan, Law in Modern Society (2007) 131. 160

publically stated, other than in a very brief form. Parliamentary debate is hindered by inexperience and lack of comprehension by Members of Parliament (MPs).

In this particular situation there was no debate of the 2008 reform prior to it entering Parliament which would have allowed competing ideological perspectives to have been engaged. Its rapid passage through the parliamentary process did not allow MPs time to seek technical assistance or views from their constituencies which could have been used to resist the 2008 reform. Lack of party policies meant that “ready made” policy driven responses to the 2008 reform were not available. Further, the unstable government was plagued by motions of no confidence at the time the 2008 reform was debated and passed, which served to divert attention from a reasoned assessment of the content of the 2008 reform and its likely impacts. These political issues made it difficult to pass law reforms that were consciously aligned with policy goals They also made it easier for ideology, rather than reason, to drive reforms.

CONCLUSION

At least part of the public reaction to the 2008 reform, discussed in chapter two, suggested that it was simply the action of an incompetent or irresponsible government. Chapter three argued that it is difficult to justify all aspects of the 2008 reform as achieving stated policy goals. Chapter four has explained the reform as being a product of its –post-colonial socio-political environment.

This helps to understand why the 2008 reform happened. It also suggests that, if one accepts that a rational assessment of any proposed reform is desirable, any solution to developing “good” employment law reform needs to be prepared to take into account the ideological milieu. This milieu enables facts that can (and should) be used in a rational assessment of employment law reform to be marginalised or distorted. It does not, however, provide guidance for ‘practitioners mired in the trenches of lawmaking’109 in respect of how to develop employment law reforms that take into account the likelihood that the surrounding discourse will be ideologically laden. The next chapter goes on to consider a framework for law reform that can

109 A Seidman and R Seidman, State and Law in the Development Process (1994) 61. 161 help to systematically identify some “facts” that can usefully add to debate about employment law reform. This, it is intended, will help to balance ideologically driven agendas with accurate information that can then be analysed as part of the law reform debate.

162

CHAPTER 5 DEVELOPING A FRAMEWORK FOR REFORM

INTRODUCTION

The preceding chapters have argued that even though the 2008 reform was not, in sum, justifiable as achieving stated policy goals, it cannot be understood and dismissed as simply the action of an incompetent government. Instead it must be viewed in light of the traditional narrative of employment, which is one of exploitation of employees by employers. In Vanuatu’s post-colonial developing country environment this narrative is particularly deeply embedded because it is associated with a broader foreigner vs local dynamic. Legal reforms that are positioned as being “anti-exploitation” assume therefore considerable moral and political force. This moral and political force is divorced from a rational assessment of the extent to which:

a) there actually is any existing exploitation of employees; b) the proposed legal reform will “cure” existing exploitation; and/or c) the proposed legal reform will affect the implementation of stated government policy.

The 2008 reform raises the question of how the government can ensure that employment law reform is based upon informed reasoning that takes into account an assessment of the consequences of reforms on the achievement of government policy. The experience of the 2008 reform suggest that part of the answer to this question is to undertake public consultation with all interested people prior to finalising Bills for parliament, and to take the results of this consultation into account in the development of new laws. Since 2008 Vanuatu has made progress in respect of consultative processes for employment law reform. In particular the Employment (Amendment) Act 2010, which replaced the existing Labour Advisory Board with a Tripartite Labour Advisory Council with more clearly defined role and powers, came into force in February 2011. However, if the basis of that consultation is ill-informed (or informed by ideological assumptions rather than factually accurate information)

163

consultation may not help to develop employment contract law reforms that take into account the extent to which law reforms will achieve desired policy objectives; indeed ill-informed driven consultation may instead create division.

What constitutes exploitation of employees is not a fixed concept. The Vanuatu government appears to have equated absence from exploitation, in law, as conformity to international labour standards. If this is related to stated government policy these standards were used as reference point for determining what decent working conditions are. One area that the Vanuatu government appeared to lack clear information about when making the 2008 reform was the content of international labour standards. It appears that there was no systematic legislative assessment of the extent to which either the existing laws or the proposed laws conformed to these standards. This suggests that there is a gap in information and/or capacity to conduct such a legislative assessment. To overcome this gap, this chapter proposes a legislative assessment framework (“the framework”) that can be used to determine the extent to which laws or proposed reforms provide decent working conditions, as defined by international labour standards.

The chapter begins by explaining the fundamental objectives of the framework, both in terms of the information contained and how the framework is to be used, and why these objectives haves been selected. The chapter then surveys other approaches that have been taken internationally to defining and assessing the ILO concept of decent work. This survey allows broad approaches to measuring decent work to be identified. The chapter concludes by broadly outlining the framework for assessing whether the content of national laws conform to indicators of decent work.

OBJECTIVES OF THE FRAMEWORK

Goal: to provide decent work indicators

Placing the principle of decent work at the heart of the framework assumes that this principle has intrinsic value. This assumption is made for several reasons. First, the Vanuatu context suggests that the principle of decent work is an important guiding principle (although not the only guiding principle) for Vanuatu’s development of

164

employment laws. As discussed in earlier chapters, the principle of decent work is embedded in Vanuatu’s employment policy agenda, as provided by the Vanuatu Decent Work Country Programme (DWCP). Second, the principle of decent work is not limited to Vanuatu, but has regional and global significance across ILO member countries. A number of Pacific countries other than Vanuatu also have DWCPs. Similar DWCPs can be in found in ILO member countries across the globe.1 Third, the principle of decent work is central to the global development agenda, through the inclusion of achieving decent work for all as a target within the United Nations Millennium Development Goals (MDGs). It is therefore assumed that this is a generally acceptable, and accepted, policy goal.

Finally, on a conceptual level assuming the intrinsic value of the principle of decent work aligns with the traditional narrative of employment and the role of employment law, as outlined in chapter one. Within this narrative law is assumed to play a constraining role ‘in the name of justice’2 to prevent the exploitation of employees by employers. The matter of deciding what justice involves forms an inherent part of employment law reforms but the difficulty is that justice is an intangible and contestable concept. Indicators of decent work explicitly indicate specific standards that provide a reference point during the process of contestation as to what just employment laws should be.

Role: non-prescriptive legal indicators

It is definitely not the goal of the framework to create indicators that provide a “one size fits all” solution as to what the content of laws should be. Rather, it is widely accepted that context-specific laws should be developed by all interested parties working together.3 The framework provides a guided process to facilitate a

1 The full list can be found at International Labour Organisation, ‘Decent Work Country Programmes: Programmes by Country/Subregion’ (undated) http://www.ilo.org/public/english/bureau/program/dwcp/countries/index.htm (Accessed 22 September 2012). 2 Brian Langille, ‘Labour Law’s Back Pages’ in Guy Davidov and Brian Langille (eds) Boundaries and Frontiers of Labour Law (2006) 13, 23. 3 The principle of tripartite development of labour law and policy is a common theme that runs through international labour standards. There is some controversy over whether “all interested parties” specifically involves worker representatives, employer representatives and government in a tripartite structure as traditionally defined by the ILO or whether there should be broader participation. The controversy has primarily focused on governance structures within the ILO, which have been 165

legislative assessment that forms part of the broader consultative process of developing context specific laws.

The framework fits into the issue identification phase of the policy cycle as detailed in the 2012 ILO Guide to the formulation of national employment policies (the ILO Guide). The issue identification phase involves a range of research, including ‘policy, institutional, legal and expenditure reviews’4 and widespread consultation in order to build a solid knowledge base that can then inform debate about reform. The framework provides a structured approach that will both build local knowledge as to the content of international standards related to decent work and provide comprehensive baseline information on how well either current laws or proposed reforms meet the aim of ensuring that employment conditions meet non-prescriptive indicators associated with decent work. This information can then feed in to dialogue that formulates reforms, and should ensure that justifications for law reforms that relate to the desire to promote decent work are not ex post facto additions, but instead become part of the process of weighing up competing (ideological) positions.5

The role of the framework fits into the ethical approach of the use of indicators, as defined by Robert Salais:

criticised on the basis that tripartism can limit the participation of all interested parties. Whilst the formal structures of the ILO remain tripartite field programmes have, and do, rely on wider participation. (See Lucio Baccaro and Valentina Mele, ‘Pathology of Path Dependency? The ILO and the Challenge of New Governance’ (2012) 65(2) International Labour Review 195, 207 – 210.) I have deliberately used the broad phrase of all interested parties, rather than the narrow phrase of tripartite partners. 4 International Labour Organisation, Guide for the Formulation of National Employment Policies (2012) 53. 5 Seidman and Seidman argue that justifications often reveal, not the actual factors considered in reaching a decision, but that factors that the decision maker believes that others will accept as sufficient reasons. (A Seidman and R Seidman, State and Law in the Development Process (1994) 57 – 61.) This appears to be a reflection of the justification process surrounding the 2008 reform. 166

Figure 5.1: Salais’ ethical approach to the use of indicators6

Salais contrasts an instrumental approach in which performance is measured by indicators with an ethical approach, in which indicators are used as an aid to evaluation. An ethical approach to the use of indicators recognises that ‘public policies are not there to improve their results [as compared to indicators]… Their objective has to be sought from the point of view of fundamental objectives.’7 Indicators provide an external set of values which feed into a collective human process of learning how to make progress towards achieving these values. Whilst it is possible to talk about achievement gaps, the existence of gaps is not intrinsically important as ‘there are many good reasons for these gaps: different levels of economic development, value systems or… a varying distance from the normative system and the expectations of the international organisation that has drawn up the standard.’8

Limitations

The framework is not intended to be the only thing that needs to be taken into account during the issue identification and policy formulation process. There are two

6 Robert Salais, ‘On the correct (and incorrect) us of indicators in public action’ (2005 – 2006) 27 Comparative Labour Law and Policy Journal 237, 240. 7 Ibid, 243. 8 Ibid, 254. 167

particular points to note here. First, making “good law” in terms of its content on paper should not be seen as the purpose of any law reform exercise. Instead, law should be seen as a means to an end, with the end goal being to ensure that the law reform meets the desired policy objectives. The broader context (including the socio- economic and legal-institutional context) will determine the actual impact of particular regulations in practice and it is crucial that these dimensions also be taken into account, both in identifying key issues and deciding the best ways of overcoming those issues and achieving desired policy objectives.

Second, the framework is not intended to define a particular country’s policy objectives. The framework’s primary normative claims are:  first, that employment law and policy should be developed through a process of informed consultation; and  second, that one policy consideration should be the need to achieve decent working conditions for employees.

The framework assists in realising these norms by providing information, in the form of non-prescriptive indicators, as to the sorts of things that decent working conditions for individual employees could or should cover. The framework does not maintain that achieving decent working conditions is the only policy goal that should be considered.9 Indeed competing policy objectives relating to the desire to create jobs are likely, with the particular competing policy objectives and the relative weight given to them being context specific.

The framework also does not guide people in identifying competing policy interests, or deciding how to balance them against each other. Instead the framework fits into an assumed policy process that involves consultation. The decision to limit the framework to being a tool for legislative assessment and knowledge building was done in order to respect the normative principle that employment law and policy should be developed through a process of informed consultation with all interested parties.

9 For a discussion of normative claims that may underpin employment law and policy see John W Budd, ‘Fairness at Work, and maybe Efficiency but not Voice: An Evaluation of the Arthur’s Commission Report’ (2007 – 2008) 29 Comparative Labour Law and Policy Journal 477, 484- 485. 168

The most important factor in deciding to focus the role of the framework to a limited legislative assessment and knowledge building tool was my personal experience of the employment law reform process in Vanuatu. In May 2012 I was invited to a meeting of the Vanuatu Tripartite Labour Advisory Council (TLAC) to discuss a draft of the Employment Relations Bill (ERB) 2012. The focus of the meeting was a review of the content of the ERB May 2012 and reach agreement on the content of specific legislative provisions. This meeting was conducted by a technical officer from the ILO Pacific sub-regional office. The draft Bill had been sent to Geneva for technical comments in respect of its adherence to a wide range of Conventions. The memorandum of technical comments provided to the meeting made a number of suggestions for reforms.10

Unfortunately, this memorandum was not easy to understand, in part because it a dense document that was not entirely systematically structured. Without careful examination of the memorandum it is not possible to assess what areas of the ERB were reviewed, and what international labour standards were used in the process of the review. A closer examination of the document raised two other issues as well. First, it would have been possible to gain more guidance from international labour standards as to the possible content of the ERB.11 Second, the memorandum did not acknowledge the presence of competing international labour standards.12

The draft ERB that was presented for discussion contained highlighted changes based on the memorandum, and most of these were accepted with very little, if any, discussion. Whilst a fuller and more informed locally initiated discussion may have reached exactly the same conclusions (I am not suggesting that there was anything

10 International Labour Organisation, ‘Memorandum of Technical Comments on the Employment Relations Bill of the Republic of Vanuatu’ (Unpublished, May 2012). 11 For instance, the memorandum made comments based on the Protection of Wages Convention 1949 (Convention 95) in respect of the ERB provisions regulating deductions from wages. It did not, however, make reference to the more specific provisions in the Protection of Wages Recommendation 1949 (Recommendation 85). Recommendation 85 was, however, referred in other places. (Ibid, [57], [58].) 12 For instance, the memorandum made a comment based on the Holidays with Pay Convention (Revised) 1970 (Convention 132) that the eligibility period for paid annual holidays should be no greater than 6 months. It did not, however, acknowledge that the Holidays with Pay Convention 1936 (Convention 52), which is still a source of international standards even though it is no longer open for ratification does provide for a 12 month eligibility period. (Ibid, [59].) 169

particularly objectionable about the content of the memorandum) the process did not use the legislative assessment process to the best local knowledge building effect. It could have better respected the principle that employment law and policy should be developed through a process of informed consultation with all interested parties.

Following this meeting I was appointed a member of the TLAC.13 I was asked to lead a tripartite review of the draft ERB, but there was no available legislative assessment tool to help conduct the review. My involvement with TLAC since May 2012 has strengthened my perception, which developed in the aftermath of the 2008 reform, of the need for systematic background information to help frame debates. Focusing the role of the framework on being a legislative assessment and knowledge building tool fits with this perceived local need.

DEFINING DECENT WORK: SURVEY OF LITERATURE

Deriving decent work indicators leads to the question, ‘what does the notion of decent work really comprise?’14 Its definition has received some attention by the Committee on Economic and Social Rights of the United Nations Economic and Social Council (UNECOSOC), which observed that:

Work as specified in article 6 of the Covenant must be decent work. This is work that respects the fundamental rights of the human person as well as the rights of workers in terms of conditions of work safety and remuneration. It also provides an income allowing workers to support themselves and their families as highlighted in article 7 of the Covenant. These fundamental rights also include respect for the physical and mental integrity of the worker in the exercise of his/her employment.15

13 The Vanuatu Chamber of Commerce and Industry requested that I be appointed by the Minister of Internal Affairs to replace an employer representative who had died (Dick Eade). This notice of appointment has not been gazetted. 14 Dharam Ghai, ‘Decent work: Concept and indicators’ (2003) 142(2) International Labour Review 113, 113. 15 Committee on Economic and Social Rights of the United Nations Economic and Social Council, ‘General Comment No. 18: The Right to Work: Article 6 of the International Convenant on Economic, Social and Cultural Rights UN Doc E/C.12/GC/18 (Feb 6, 2006) [7]. 170

The ILO has attempted to raise decent work to a term of art. It defined decent work as involving ‘the promotion of rights at work; employment [job creation]; social protection; and social dialogue.’16 As observed in chapter one this statement is too general to give a clear answer to the question of what decent work comprises. The ILO has found that one of the difficulties in answering this question is:

There is no agreed set of… indicators to measure decent work. Indeed, some believe that decent work is a well meaning, nice sounding phrase that is not definable or measurable. This lacuna as regards decent work indicators greatly hampers ILO’s own work, as well as the ability of its constituents to monitor and evaluate the situation in their countries.17

In recognition of this lacuna the ILO Declaration on Social Justice for a Fair Globalisation, adopted by the International Labour Conference (ILC) in June 2008, stated that the implementation of the decent work agenda requires consideration of ‘the establishment of appropriate indicators or statistics… to monitor and evaluate the progress made’.

Almost all of the work on developing decent work indicators has been undertaken under the auspices of the ILO, although the European Union has developed a set of statistical indicators of employment quality.18 Much of the ILO’s work on defining the concept of decent work has focused on the development of “statistical indicators”

16 International Labour Organisation, ‘Report of the Director General to the 87th Session of the International Labour Conference, 1999’ (1999) http://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-i.htm (Accessed 18 November 2010). Clarifying statements are found on International Labour Organisation, ‘Decent Work Agenda’ (undated) http://www.ilo.org/global/about-the-ilo/decent-work-agenda/lang--en/index.htm (Accessed 10 September 2012). Whilst the ILO’s definition of decent work has attracted some criticism, this criticism has been directed at the ILO’s definition of various core labour standards, and the potential for these core labour standard to be used to narrowly define the concept, rather than at the broad concept of decent work. See, for example, Gillian MacNaughton and Diane F Frey, ‘Decent Work for All: A Holistic Human Rights Approach’ (2011) 26(2) American University International Law Review 441. For an overview of criticisms see Adelle Blackett, ‘Situated Reflections on International Labour Law, Capabilities and Decent Work: The Case of Centre Maraicher Eugene Guinois’ (2007) Revue quebecoise de droit international (Hors-serie) 223, 226 – 230. 17 Richard Anker, Igor Chernyshev, Philippe Egger, Farhad Mehran and Joseph Ritter, ‘Measuring Decent Work with Statistical Indicators’ (Working Paper No. 2, Policy Integration Department, International Labour Office, October 2002) vi. 18 See Lucie Davoine, Christine Erhel and Mathilde Guergoat-Lariviere, ‘Monitoring quality in work: European Employment Strategy indicators and beyond’ (2008) 147(2-3) International Labour Review163. 171

that focus on quantitative measures of decent work (such as the number of children in wage employment or self-employment) rather than “legal indicators” that assess legal norms (such as the content of laws prohibiting child labour). Although the development of statistical indicators has been at the forefront of the ILO’s work in this area, initial discussions on measuring decent work, documented in a 2002 working paper, recognised that there was also a need to develop legal indicators. Possible legal indicators that were suggested initially included ‘ratifications of ILO conventions, especially the… core conventions and relevant national laws… [and a] set of indicators on laws and regulations for each of the major aspects of decent work (e.g., unemployment insurance, protection from dismissal, ILO core conventions, restrictions on the right to strike, restrictions on the right to organise, statutory minimum wage, etc.).’19

In 2003 a special issue of the International Labour Review on “Measuring Decent Work” was published. This issue presented ‘the “state of the art” on research on measuring decent work’.20 Whilst developing statistical indicators that measure ‘actual outcomes and conditions’21 was the primary focus for most authors,22 one article did discuss combining statistical indicators with legal indicators (referred to in the article as “input indicators”) that measured ratifications of conventions and the content of laws.23

That same year a list of 29 statistical indicators was presented to the 17th International Conference of Labour Statisticians (ICLS).24 Delegates to the 17th ICLS recommended that a tripartite meeting of experts be convened to further explore the

19 Anker et al, above n 17, vi. 20 ‘Introduction’ (2003) 142(2) International Labour Review 109, 111. 21 Richard Anker, Igor Chernyshev, Philippe Egger, Farhad Mehran and Joseph Ritter, ‘Measuring decent Work with Statistical Indicators’ (2003) 142(2) International Labour Review 147, 153. 22 Four approaches to measuring decent work were presented. Three of these, in articles by Anker et al ibid, Ghai, above n 43 and Bescond et al (David Bescond, Anne Châtaignier and Farhad Mehran, ‘Seven Indicators to Measure Decent Work: An international comparison’ (2003) 142(2) International Labour Review 179) focus almost entirely on statistical indicators. 23 Florence Bonnet, José B Figueiredo and Guy Standing, ‘A Family of Decent Work Indicators’ (2003) 142(2) International Labour Review 213. 24 International Labour Organisation, ‘Report 1: General Report’ (Seventeenth International Conference of Labour Statisticians, Geneva, 24 November-3 December 2003) [2.2] http://www.ilo.org/wcmsp5/groups/public/---dgreports/---integration/--- stat/documents/meetingdocument/wcms_087585.pdf (Accessed 1 December 2010). 172

development of indicators.25 The Tripartite Meeting of Experts for the Measurement of Decent Work (the Tripartite Meeting), held in September 2008, adopted a number of proposals in respect of statistical indicators and also adopted two proposals in relation to measuring the contribution of the legal framework to decent work:

(i) to provide a textual description of the legal framework and data on the actual application of rights, as well as on benefit levels and coverage and other relevant aspects; and (ii) to develop indicators for countries’ compliance with the four Fundamental Principles and Rights at Work (FPRW).26

The first proposal suggested a “descriptive approach” which required that ‘a systematic effort…be made to compile information on the legal framework and the effective application of rights in a standard template’.27 A template for gathering this information which identified nine broad thematic areas of decent work and 17 specific aspects of law related to decent work was provided.28 The template required that information on: the relevant law, policy or institutions; benefit levels and thresholds contained within the law; evidence of implementation effectiveness; coverage of workers both in law and in practice; and ratification status of relevant ILO conventions be collected.29

25 International Labour Organisation, ‘Final Report on the Seventeenth International Conference of Labour Statisticians’ (2004)[25] http://www.ilo.org/global/statistics-and-databases/meetings-and- events/international-conference-of-labour-statisticians/WCMS_087568/lang--en/index.htm (Accessed 1 December 2010). 26 International Labour Organisation, ‘Chairpersons report’ (Tripartite Meeting of Experts on the Measurement of Decent Work Geneva, 8 to 10 September 2008) [70] http://www.ilo.org/integration/resources/mtgdocs/lang--en/docName--WCMS_099764/index.htm (Accessed 1 December 2010). 27 Ibid, [71]. 28 The areas to be described within this template were: Employment opportunities (government commitment to full employment & unemployment insurance); Work that should be abolished (child labour & forced labour); Adequate earnings and productive work (statutory minimum wage); Decent hours (maximum hours of work); Social security (pension, incapacity for work due to sickness & incapacity for work due to invalidity); Equal opportunity and treatment in employment (anti- discrimination law based on sex of worker & anti-discrimination law based on race, ethnicity, religion or national origin); Combining work and family life (maternity leave); Safe work environment (occupational safety and health insurance & labour inspection); and Social dialogue and workers’ representation (freedom of association and right to organise, collective bargaining right & tripartite dialogue) (Ibid, Appendix 4). 29 Ibid. 173

This approach has been utilised by the ‘Monitoring and Assessing Decent Work’ project (MAP). This project, launched in 2009, aims to ‘facilitate the identification of decent work indicators that are relevant at the national level’.30 The most recent output of the MAP is the first edition of the ILO manual Decent Work Indicators: Concepts and definitions, released in May 2012. This manual contains information on a number of statistical indicators organised into ten broad thematic areas of decent work. Twenty-one “legal framework indicators” identify specific aspects of law associated with decent work.31 In accordance with the first proposal at the Tripartite Meeting the legal framework indicators ask countries to consider what laws, policies or institutions are in place, what benefits are provided under the laws or policies, how many workers are covered by law, how many workers are covered in practice, and whether relevant ILO Conventions have been ratified.

The second proposal of the Tripartite Meeting required the construction of ‘indicators for compliance with the four FPRW.’32 The FPRW are defined in the Declaration on Fundamental Principles and Rights at Work 1998 as being:

(a) freedom of association and the effective recognition of the right to collective bargaining; (b) the elimination of all forms of forced or compulsory labour; (c) the effective abolition of child labour; and (d) the elimination of discrimination in respect of employment and occupation.33

30 International Labour Organisation, ‘Monitoring and Assessing Progress on Decent Work (MAP)’ (undated) http://www.ilo.org/integration/themes/mdw/lang--en/WCMS_123804/index.htm (Accessed 10 May 2012). 31 The legal framework indicators are: 1. Government commitment to full employment; 2. Unemployment insurance; 3. Statutory minimum wage; 4. Maximum hours of work; 5. Paid annual leave; 6. Maternity leave; 7. Parental leave; 8. Child labour; 9. Forced labour; 10. Termination of employment; 11. Equal opportunity and treatment; 12. Equal remuneration of men and women for work of equal value; 13. Employment injury benefits; 14. Labour inspection; 15. Pension; 16. Incapacity for work due to sickness / sick leave; 17. Incapacity for work due to invalidity; 18. Freedom of association and the right to organise; 19. Collective bargaining right; 20. Tripartite consultations; 21. Labour administration. (International Labour Organisation, Decent Work Indicators: Concepts and definitions (2012) 10.) 32 International Labour Organisation, above n 26, [72]. 33 Article 2 Declaration on Fundamental Principles and Rights at Work 1998. 174

Detail on the FPRW is found in the ILO’s eight fundamental conventions: the Freedom of Association and Protection of the Right to Organise Convention 1948 (Convention 87); the Right to Organise and Collective Bargaining Convention 1949 (Convention 98); the Forced Labour Convention 1930 (Convention 29); the Abolition of Forced Labour Convention 1957 (Convention 105); the Equal Remuneration Convention 1951 (Convention 100); the Discrimination (Employment and Occupation) Convention 1958 (Convention 111); the Minimum Age Convention 1973 (Convention 138); and the Worst Forms of Child Labour Convention 1999 (Convention 182).

FPRW indicators have been developed for Conventions 87 and 98, which relate to rights to associate and undertake collective bargaining. The methodology is the subject of a working paper, published in January 2011.34 The working paper proposes 168 “evaluation criteria”, which include both de facto (or statistical) and de jure (or legal) indicators. The de jure criteria have been developed from a ‘careful consideration of the ILO Constitution and Conventions Nos. 87 and 98 – the main international instruments on the subject – and… [the] Digest of decisions and principles of the Committee on Freedom of Association.’35 The criteria specifically examine areas of non-compliance, with information being drawn from a specified list of sources.36 Results are coded into a table which indicates the sources of information on non-compliance in a particular year. This is complemented with ‘supplementary textual documents… where the evaluation criterion… is elaborated, by copying word for word the paragraphs referring to the issue of non-compliance from the original text.’37

The January 2011 working paper draws on research which had been presented in Qualitative Indicators of Labour Standards.38 The various approaches to measuring

34 Dora Sari and David Kucera, ‘Measuring progress towards the application of freedom of association and collective bargaining rights: A tabular presentation of the findings of the ILO supervisory system’ Working Paper No. 99, Policy Integration Department, International Labour Office, January 2011). 35 Ibid, 5. 36 Ibid, 10. 37 Ibid, 15. 38 David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007).The content of the book presented research discussed at a 2004 ILO seminar. Not all chapters involved the measurement of laws. Kucera’s chapter primarily uses statistical measures in relation to the violation of trade union rights (or at least does not clearly explain measures of laws that were used). The chapter by Belser, de Cock and Mehran uses statistical measures in relation to forced 175

the performance of laws in respect of achieving decent work outcomes presented in this book fall into two broad categories: an “index approach” which assesses laws against a number of indicators then aggregates this assessment into a single figure which enables countries to be ranked;39 and a “textual approach” which does not aim to score countries in order that they can be ranked, but instead allows for more detailed analysis of an individual country’s laws in respect of various indicators.40

The index approaches detailed in Qualitative Indicators of Labour Standards involve first defining criteria or indicators which countries’ laws could be assessed against. Once defined, laws are given a number to indicate compliance with the particular criterion, with some indexes using a binary scale, with 0 for no and 1 for yes, and some using an ordinal scale, which assigned different values depending on the degree of compliance. The “mark” for each individual criterion can then be aggregated into a single number, with different criteria being given a different weighting in the aggregation process, to provide an overall ranking.

The textual approaches also begin by defining criteria against which countries’ laws can be assessed. The degree of compliance with each individual criterion is then answered textually. No specific weightings are given to answers and the responses are not further reduced into an overall compliance ranking.

The ‘Report Form for the General Survey Concerning Fundamental Conventions in light of the 2008 ILO Declaration on Social Justice for a Fair Globalization’,41 published in 2010, also can be considered to provide indicators relating to the

labour. The chapter by Bertola, Boeri and Cazes is theoretical, and, whilst it critiques various approaches to measuring employment protection laws, it does not present any particular method for measuring laws. 39 Chapters that present indexes approaches to assessing laws are: Richard N Block, ‘Indicators of Labour Standards: An Overview and Comparison’; Dan Viederman and Erin Klett, ‘Country-level Assessments of Labour Conditions in Emerging Markets: An Approach for Institutional Investors’; Ludo Cuyvers and Daniel Van Den Bulke, ‘The Quantification of Respect for Selected Core Labour Standards: Towards a Social Development Index?’and W R Böhning, ‘Towards an Index of Core Rights Gaps’. 40 Chapters that present textual approaches to assessing laws are: Monique Zarka-Matres and Monique Guichard-Kelly, ‘Decent Work, Standards and Indicators’; and Miriam Abu Sharkh ‘Taking Labour Laws to the Domestic Dentist; Measuring countries’ compliance with international labour non- discrimination standards’. 41 International Labour Organisation, ‘Report Form for the General Survey Concerning Fundamental Conventions in light of the 2008 ILO Declaration on Social Justice for a Fair Globalization’ (2010) http://www.ilo.org/ilolex/english/reportforms/pdf/19e2011.pdf (Accessed 1 December 2010). 176

decency of the content of laws. This report form requires countries to complete a table. Key elements of the eight fundamental Conventions, along with the source of each element, have been identified. These elements have been selected as indicators of the degree to which a country is complying with fundamental Convention standards, even though the country has not ratified one or more of them. Countries are required to complete the table by identifying the extent to which each indicator is achieved. If laws govern a particular area then a precise reference to the relevant law is required. The table includes both information about the content of laws (legal indicators) and the application of those laws (statistical indicators).

APPROACHES TO LEGAL INDICATORS FOR DECENT WORK

From the above we can see that, in addition to statistical indexes that measure the extent to which decent work is achieved in practice, there are three broad types of approaches to examining whether laws promote the principle of decent work: a descriptive approach; an index approach; and a textual approach.

A descriptive approach

A descriptive approach, in which laws in various areas are described, but not measured against any standard, was the first of the proposals adopted at the Tripartite Meeting of Experts for the Measurement of Decent Work. One of the advantages of a descriptive approach is that it provides contextual richness that is not limited by assessment against set criteria. Further, there is no need to stringently develop and define measurement criteria that can be consistently applied across countries and over time.42 This second point may, however, also be considered to be a disadvantage: descriptive approaches do not attempt to define or construct external indicators for “good laws”, or laws that promote decent work.

42 Richard Anker and Pascal Annycke, ‘Reporting Regularly on Decent Work in the World: Options for the ILO’ (Working Paper No. 94, Policy Integration Department, International Labour Office, January 2010) 9. 177

An index approach

Indexes do involve defining external indicators against which to measure laws. Identifying indicators may be challenging because there might not be any clearly defined standard of “good practice”. However, the ILO has noted that this in itself is not a reason to avoid such an exercise. Instead, ‘when selecting indicators, attention should be paid to whether a generally desirable level for an indicator can be identified.’43

One benefit of indexes is that they easily allow for countries to be compared. Low rankings on indexes can be a powerful motivator for countries to reform their laws, and therefore their index scores.44 As progress is determined by improved index scores (although rankings may or may not improve depending upon how other countries change) it is also easy to monitor how a country’s laws are changing over time.

There are a number of drawbacks to indexes. First, there is a concern that ‘most aspects of the legal framework for work are too complex to be represented as quantitative variables/indicators, for example as dichotomous binary variables (with 0 and 1 values for no and yes answers) or as ordinal variables (with for example 0, 0.5 and 1 values to represent no, partially true, and yes).’45 Second, such an approach

43 International Labour Organisation, above n 26, [46]. 44 An example here is the World Bank Doing Business Index. Since 2004 the Doing Business reports have tracked reforms and the “top reformers” each year are listed and at least some of these reforms are directly driven by the desire to improve Doing Business rankings. In 2007/2008 239 reforms which improved country scores were made. (World Bank, Doing Business 2009 (2008) 1, 4.) The Doing Business rankings have acted as a direct motivator for Vanuatu policy. From 2008 – 2009 I was a member of Vanuatu’s “Doing Business Taskforce”. The background within the Terms of Reference for the Taskforce noted that, ‘The World Bank’s Doing Business 2008 report provides an independent benchmarking of international practice… The data confirms that Vanuatu does not rate particularly well against international benchmarks. The Government recognises the current macroeconomic stability as an opportune time to engage in a series of targeted interventions aimed at improving the country’s investment climate.’ (Vanuatu Ministry of Trade, Commerce, Industry, Tourism, Investment and Business Development, ‘Doing Business Reform Task Force Terms of Reference, 21 August 2008.) 45 Anker and Annycke, above n 42, 20. See also 7 – 10. It can be noted that some of this perceived difficulty arises from the authors wanting to measure not only the content of the law, but how the law is being applied in practice. The first example given to illustrate the difficulty of using quantitative indicators to measure the legal framework was, ‘For example, workers’ right to organise and bargain collectively in a country is not as simple as knowing if a country has ratified appropriate ILO Conventions. One would want to know for example: restrictions on the right to organise; how many complaints the ILO has received; whether there is a national complaints body; how many complaints 178

does not provide specific detail on country context, or how a country is performing in various areas. For this reason the Tripartite Meeting decided that an aggregate composite index which ranks countries is of little value in measuring decent work. 46 Third, because indexes do not usually show what information was used when assessing the law against each particular criterion they are not transparent. Fourth, index approaches use indicators instrumentally. This leads to ‘a risk that learning is diverted away from actual performance toward discovering instrumental ways of improving scores in terms of statistical benchmarking.’47 Fifth, whilst their “mathematical” appearance suggests impartiality, the selection of indicators is a social process that is not neutral. This may be particularly problematic if more complex indexes are constructed, because ‘ultimately the number of components used is fairly arbitrary, to say nothing of the weighting schemes that might be used to aggregate and construct an overall indicator of compliance with a labour standard.’48

A textual approach

Textual approaches take a middle road between description and “mathematical” indexing. As with indexing approaches the performance of laws are measured against an external standard, which addresses the primary drawback of descriptive approaches. Although, as with indexes, the issue of how indicators are selected introduces an element of arbitrariness, this issue is less problematic for textual approaches because no weighting is given to each standard. This removes a source of arbitrariness that affects index approaches. Textual approaches also remove the illusion of impartiality to which a “mathematical” representation of information may give rise.

Unlike indexing which reduces that performance to a number, the textual approach allows for discussion of the extent to which a law complies, thereby allowing for the richness of descriptive approaches. Further, a textual description of the extent to which laws comply increases the transparency of the assessment process. Whilst such a body received last year; how complaints were treated and investigated; and what enforcement mechanisms were used such as fines’ (at 8). 46 International Labour Organisation, above n 26, [5]. 47 Salais, above n 6, 242. 48 David Kucera, ‘Introduction and Overview’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 1, 2. 179

these features may be perceived as benefits they may also be perceived as disadvantages as compared to an index approach because the presence of text reduces the ease of comparison of countries or the ease of monitoring progress.

DEVELOPING A FRAMEWORK OF LEGAL INDICATORS FOR DECENT WORK

Selection of approach

Each approach to measuring decent work has different advantages and disadvantages. The key factor in selecting which approach to adopt is the purpose for which it is to be used.49 My goal is to develop a framework for analysing the extent to which the content of either existing or proposed law ensures that employees are provided with conditions that respect the principle of decent work. This purpose requires the content of law to be evaluated against indicators that define what conditions that respect the principle of decent work are. A descriptive approach alone will therefore not be suitable.

The role of the framework is to provide a set of non-prescriptive indicators which feed into a collective process which decides how to make progress towards achieving these values. In order to do this the framework needs to provide information to support the development of knowledge amongst people who engage in policy formulation. Further, the framework is not intended to provide an external measure that a country’s laws can be assessed against. Fulfilling this role is not compatible with an index approach, which is both prescriptive in its use of measurement and reduces assessment of laws to a “score” which may limit its usefulness in terms of building knowledge. A textual approach is therefore adopted.

49 Kucera identifies 3 main uses, ‘first… informing direct engagement with countries with the aim of assisting them in improving their labour standards… second… the statistical analysis of relationships, such as between trade unions rights and economic outcomes such as foreign trade… third… the comparison of countries.’ (Ibid, 4.) The first approach is more suitable for detailed textual approaches, with the latter uses lending themselves to numerical analysis and indexing. 180

Scope

The scope of the framework is limited to the three controversial areas during the 2008 reform: annual leave; maternity leave; and termination of employment; plus one area that was not reformed and is usually considered to be uncontroversial: wages protection. The decision to focus on these four aspects of the individual employment relationship was largely made in order to provide consistency with the areas analysed in chapter three. The reason for not limiting the pilot only to annual leave, maternity leave and termination was to test whether constructing and applying the framework differed depending on the extent to which the subject matter could be considered to be controversial.

Further, I did not wish to duplicate work that has already been undertaken, or is in progress. A framework for assessing occupational health and safety laws has already been developed by Zarka-Martres and Guichard-Kelly50 and the ILO is currently developing frameworks for measuring laws in relation to the eight fundamental Conventions, some of which have an impact on the individual employment relationship. Finally, the framework is intended to be a proposal of an approach, so the four areas can be considered to be pilot areas. Once the framework is distributed (and other ILO developed frameworks are also published) it is expected that a conversation can grow around its usefulness and use and its relationship with other work in the area. This conversation will feed into a fuller framework that deals with regulation of all key aspects of the individual employment relationship.

Developing the indicators

Both the “legal framework indicators” developed in the ILO’s MAP and the majority of other existing decent work measures that consider the specific content of laws derive their indicators from international labour standards as found in ILO Conventions. International labour standards were clearly an influence in Vanuatu’s 2008 reforms, and are also a clear influence in the DWCPs found across the globe. I

50 Monique Zarka-Matres and Monique Guichard-Kelly, ‘Decent Work, Standards and Indicators’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 83. 181

have chosen to adopt international labour standards as the source of indicators as this both provides a connection between the framework and the dominant international approach to defining decent work, and provides direct relevance to the numerous countries that have DWCPs.

If there were only one relevant instrument in each of the four areas being developed in the framework then, as Abu Sharkh found, developing the indicators may be ‘an easy deductive exercise.’51 However, one of the complications of international labour law is that there are often multiple instruments that exist in one area, and the standards within the multiple instruments often conflict. Whilst initiatives to “prune the dead wood” are underway,52 in the absence of ratification there are currently no rules for determining which of the multiple valid international standards are to be preferred as the “best” standards in any particular context.

This raises the need to choose between standards as the source of indicators, which introduces an element of arbitrariness. The primary response to problems of arbitrariness is to increase transparency as to the selection process for the sources of indicators. This response makes it easier for users of the framework decide whether the content of the indicators should be accepted as a reasoned starting point for analysis. Chapter six discusses the development of indicators in more detail, and explicitly identifies choices that were made during the selection of the standards that provided the source of each indicator.

It should be noted, however, that the framework of legal indicators for decent work is divorced from the question whether a country has ratified any Conventions. The non- prescriptive indicators in the framework are intended to be used as guidance for a discussion about the things that laws could contain. The indicators do not assess whether domestic law complies with the mandatory requirements of the particular Convention or Conventions ratified.

51 Miriam Abu Sharkh, ‘Taking Labour Laws to the Domestic Dentist; Measuring countries’ compliance with international labour non-discrimination standards’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 185, 185. 52 See, for example, International Labour Office, ‘Working Party on Policy regarding the revision of standards (Cartier Working Party)’ (June 2002) 1 [3] http://www.ilo.org/wcmsp5/groups/public/--- ed_norm/---normes/documents/genericdocument/wcms_125644.pdf (Accessed 16 September 2012). 182

Presenting the framework

To fulfill the role of building knowledge the indicators need to be presented in a way that is accessible for non-experts. Research suggests that as ‘humans are limited information processors, more effective problem solving will result when the complexity in the task environment is reduced.’53 Tables are one tool to reduce complexity, by systematically organising discrete information. Because of this a table approach, similar to that used by Zarka-Martres and Guichard-Kelly is adopted, with separate tables being provided for each of annual leave, maternity leave, termination of employment and protection of wages. The tables presented by Zarka- Martres and Guichard-Kelly and Sari and Kucera group specific indicators into broader categories. This provides an additional structural element to organise information, which may be helpful when faced with a long list of indicators. The framework thus groups indicators by broad area.

There are two sets of tables. The first set of tables contains detail on the source of the indicators. The indicators themselves are presented as questions as this ensures both that indicators are not simply “cut and pasted” from international labour standards and focuses each indicator on a specific (and more conversational) query. Presenting indicators as questions rather than statements also helps to emphasise the non- prescriptive nature of the framework. If relevant, each indicator is accompanied by additional text that details any exceptions to the indicator that exist in international labour standards and/or comments on alternative international labour standards that are not reflected in the stated indicator. This helps to ensure transparency in relation to the decisions taken when constructing the indicators. Again it helps to emphasise the non-prescriptive nature of the framework proposed by indicating alternatives that may be more relevant for a particular country’s context.

53 Iris Vessey, ‘Cognitive Fit: A theory-based analysis of the graphs versus tables literature’ (1991) 22 Decision Sciences 219, 220. 183

Source(s) of indicator Indicator Conv Art/ / Rec Para Broad area Specific indicator, presented as a question Exceptions to specific indicator and comments clarifying the indicator or noting competing standards that are not reflected in the indicator contained in italics. Specific indicator, presented as a question Exceptions to specific indicator and comments clarifying the indicator or noting competing standards that are not reflected in the indicator contained in italics.

The second set of tables is for users to complete. The indicators plus any comments/exceptions are included, but the source of the indicator is excluded. This has been done in order to make it manageable from a layout perspective to complete tables. Users then complete the table by answering each question and providing detail of any differences between the law and the indicator:

Assessment of current law

Conforms? (Y = Comment/detail of any differences Indicator yes; N = no) + between law and indicator (including specific legal where the law exceeds and where the law provision if provides less than the indicator) relevant

The heading in the column allowing for comment has been consciously worded in order to narrow responses to information on the content of the law, rather than having responses that justify or explain any deviations. This is because the framework is intended to provide a review of the law that precedes policy formulation. Justifications for adherence to or departures from indicators can and should come later, as part of a collective policy formulation discussion. Allowing justifications for deviations from indicators to be raised at the issues identification stage has the potential for giving too much power in setting the policy agenda to the person (who probably has some technical expertise in law) completing the review.

184

CONCLUSION

This chapter has explained why the framework is being proposed. It also explains why the approach used in the framework was chosen. Having laid the foundation of the framework the next chapter explains in detail the indicators and how they have been selected.

185

CHAPTER 6

LEGAL INDICATORS FOR DECENT WORK: A

FRAMEWORK FOR LEGISLATIVE ASSESSMENT

INTRODUCTION

The previous chapter identified the utility of a framework that provides indicators of the extent to which the content of either existing or proposed laws respect the principle of decent work. It explained why international labour standards are being used as the source of indicators and raised the problem of the need to choose between various standards when developing the indicators. As discussed in the previous chapter the problem of choice could be seen to introduce an element of arbitrariness to the framework. There it was argued that the primary response to the issue of arbitrariness is to increase transparency in the process of developing indicators.

Being transparent in the selection of indicators also serves another important purpose related to the intention behind the creation of the framework. The framework intends to assist policy makers to engage in a discussion about relevant and suitable domestic law standards of decent working conditions. Clearly showing choices in indicators helps to reinforce the concept that the indicators are not concrete standards, and promotes a discussion as to whether the choice of indicator made by the framework is suitable for the specific context.

This chapter explicitly identifies choices that were made during the process of selection of standards and development of indicators. It then presents the particular indicators in the four areas of wages protection, paid annual leave, maternity protection and termination of employment.

It should be emphasised that the framework does not contain indicators of compliance with any particular Convention. Instead the framework primarily uses Convention standards as the basis for non-prescriptive indicators. International Labour Organisation (ILO) Conventions are often accompanied by

186

Recommendations, which are “soft rules” that also form part of the body of international labour standards. Whilst they ‘are regulatory in that they create the hope or expectation that they will influence conduct’1 they are not open for ratification and do not create binding obligations. Given that the framework is not prescriptive, Recommendations have also been used as sources of indicators.

SELECTION OF INDICATORS

The following principles have been applied when selecting between international labour standards to use as indicators:

1) It is desirable that the proposed framework aligns with the globally dominant approach to assessing decency of work, as outlined in the ILO’s manual, Decent Work Indicators: Concepts and definitions (the ILO manual on decent work indicators). Because of this the specific Conventions referred to in the ILO manual on decent work indicators, and their related Recommendations, are used as the sources of indicators in the proposed framework where possible.

a) Where the ILO manual on decent work indicators does not refer to specific Conventions, ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR) comments and ratification rates are used to determine the key international labour standards.

2) In some areas the ILO manual on decent work indicators refers to multiple Conventions. No automatic preference is given to the most recent Conventions. There are two broad reasons for this. First, even though the ILO has designated some instruments “outdated”2 and some are no longer

1 Sam Blay, Ryszard Piotrowicz and B Martin Tsamenyi, Public International Law: An Australian Perspective (1997) 88. 2 For the list of current and outdated Conventions see International Labour Organisation, ‘NORMLEX: List of instruments by subject and status’(undated) http://www.ilo.org/dyn/normlex/en/f?p=1000:12030:0::NO::: (Accessed 30 October 2012). 187

open for ratification, their standards still form a valid part of the body of international labour standards. The ILO manual on decent work indicators does not give special status to the most recent Conventions, and instead acknowledges that decent work indicators can come from both older Conventions which are no longer open for ratification and the most recent Conventions. Second, and more substantively, countries may well have social, economic or institutional reasons for choosing not to ratify current Conventions. There is a danger that if only the most recent standards are used as indicators, then the proposed framework becomes a de facto tool for driving ratification, rather than being a more comprehensive tool for allowing countries to consider various options. The reasons that influence a country’s decision not to ratify a current Convention may mean that looking at alternative (earlier) standards is appropriate.

3) In selecting between competing Convention standards the following rules are applied:

a) Where there is a general standard and a more specific standard the more specific standard has been preferred as the source of indicator. This decision was made on the basis that indicators should be as specific as possible.

b) Once a specific indicator is included, indicators based on more general standards become redundant and are not included.

c) If there is more than one specific standard in multiple competing Conventions, then the specific standard that has been identified most frequently in the text of the Conventions will be used as the source of the indicator.

188

d) If frequency cannot be used to identify the preferred specific standard then the most recent standard will be used as the source of the indicator.

e) In all situations where there are competing standards each indicator shall be followed by a comment that discusses the presence and source(s) of competing standards.

4) All areas covered by standards that relate to the relationship between individual employers and employees are included for the reason that this increases the comprehensiveness of the indicators.

5) As the framework only deals with indicators for substantive laws regulating the individual employment relationship, indicators arising from international labour standards dealing with procedural and institutional matters such as record keeping, enforcement and penalties for breaches have been excluded.

6) Some international labour standards are worded as optional “may” statements and others are worded as mandatory “shall” statements. Both optional and mandatory standards have been used as the basis for indicators because all of the indicators are non-prescriptive, so only indicate things that stakeholders may like to consider including in their laws. Drawing indicators from optional as well as mandatory standards increases the comprehensiveness of the indicators.

a) In the event of a conflict between optional and mandatory standards, mandatory standards have been preferred because they create a more definite and well defined obligation.

189

The following further principles have applied to the selection and use of Recommendation standards:

1) Replaced instruments are not considered as they are obsolete.

2) Recommendation standards have been included if they are specific and complement Convention standards by expanding on matters contained in Conventions or creating additional standards in areas not covered by Conventions.

3) Recommendation standards have not been used if they are incompatible with Convention standards. The reason that Conventions have been preferred over Recommendations is that Recommendations have the status of soft rules.

4) If Recommendation standards are drafted so generally that it is not clear how they could, in practice, be drafted into legislation, these standards have not been used as a source of indicators.

WAGES PROTECTION

Sources of decent work indicators

Current decent work indicators contained in the ILO manual on decent work indicators only refer to minimum wage setting, and do not identify key Conventions in respect of the protection of payment of wages. The CEACR has, however, stated that it ‘views the Protection of Wages Convention as a “fundamental” Convention in the commonly accepted sense of the term.’ 3 The Protection of Wages Convention

3 International Labour Organisation, ‘General Survey of the reports concerning the Protection of Wages Convention (No. 95) and the Protection of Wages Recommendation (No. 85), 1949’ (Report III 1 B, 91st International Labour Conference, Geneva, 2003) 295 [511]. 190

1949 (Convention 95) and the corresponding Protection of Wages Recommendation 1949 (Recommendation 85) are the primary instruments in the area of how wages are to be paid.4 Convention 95 has been ratified by 96 countries, and its standards are widely accepted, even in countries that have not ratified it.5 Convention 95 provides clear standards in relation to how wages should be paid. Recommendation 85 provides further detail in respect of the regulation of deductions from wages and the period for paying wages. Decent work indicators in relation to the protection of payment of wages are derived from these two instruments. The broad areas that the table is organised into are the same as were used by the CEACR in its General Survey of the reports concerning the Protection of Wages Convention (No. 95) and the Protection of Wages Recommendation (No. 85), 1949 (Report III 1 B, 91st ILC).

Table of decent work indicators for the protection of payment of wages

Source(s) of indicator Indicator Conv/ Art/ Rec Para Application 1. Do the laws on protection of wages apply to all employees? C 95 Art 2(1)

Exception: Categories of workers other than manual labourers and domestic C 95 Art(2) workers can be excluded from Convention standards if application would be inappropriate Medium of Payment 2. Is there a requirement that wages must be paid in legal tender? C 95 Art 3(1)

Comment: Legal tender includes payment by bank cheque, postal cheque or C 95 Art 3(2) money order where payment in this manner is customary, special circumstances make such payment necessary, or there is a collective or individual agreement permitting such payments. It excludes promissory notes, C 95 Art 3(1) vouchers or coupons. C 95 Art 4 Exception: Partial payment in allowances in kind permitted in situations where such payment is customary and desirable if: 1. there are measures to ensure that the value of allowances in kind is fair and reasonable; and 2. the allowance in kind is appropriate for the employee and his or her family

http://www.ilo.org/public/english/standards/relm/ilc/ilc91/rep-iii-1b.htm (Accessed 1 December 2010). 4 Other international labour standards in the area of private sector wages relate to wage fixing (C 26, C 99, C 131, R 30, R 89, R 135) and wage claims on insolvency (C 173, R 180). 5 International Labour Organisation, above n 3, 296 [499]. 191

3. Is payment in alcohol or drugs prohibited? C 95 Art 4(1) 4. Must wages be paid directly to the worker? C 95 Art 5

Exception: Law may permit payment to others in accordance with collective or C 95 Art 5 individual agreements Payment in event of employer bankruptcy 5. Are wages a privileged debt? C 95 Art 11(1) Comment: A maximum amount of privileged debt may be specified C 95 Art 11(1) Freedom to Dispose of wages 6. Are limits on how an employee spends his or her wages prohibited? C 95 Art 6 7. Are measures to ensure that employees are not coerced to use work stores C 95 Art 7(1) provided? 8. If the only shops accessible to employees are work stores, are there measures C 95 Art 7(2) to ensure work stores provide fair and reasonable prices? Deductions from wages 9. Are there limits on deductions from wages to ensure that the employee is R 85 Para 1 still able to maintain his or her family after deductions are made? 10. Are deductions for reimbursement of loss or damage suffered by the employer only permitted if: a. it can clearly be shown that the employee was responsible; and R 85 Para b. the employee has been given an opportunity to explain why R 85 2(1) deductions should not be permitted? Para 2(3)

11. Are there limits to ensure that deductions for reimbursement of loss and R 85 Para damage do not exceed the actual amount of loss or damage? 2(2) 12. Are deductions for tools, material or equipment supplied by the employer R 85 Para 3 only permitted if such deductions: a. are a customary practice; or b. have been collectively agreed to; or c. have been authorised by a legally established procedure? 13. Are there limits on the attachment or assignment of wages to ensure that C 95 Art 10 the employee to still able to maintain his or her family after deductions are made?

192

Period, time and place of payment 14. For employees whose wages are calculated on an hourly, daily or weekly R 85 Para 4(a) basis is the maximum wage period 16 days or less? 15. For employees on a fixed monthly or annual salary is the maximum wage R 85 Para period 1 month or less? 4(b) 16. For employees whose wage is calculated on a piecework basis is the R 85 Para maximum wage period 16 days or less? 5(1) 17. For employees whose wage is on a calculated on a task completion basis: R 85 Para a. are payments in proportion to the amount of the task completed 5(2) required at least every 16 days; and b. is final payment required within 14 days of completion of the task? 18. Are payments in cash to be made on workdays only? C 95 Art 13(1) 19. Are payments in cash to be made at or near the place of employment? C 95 Art 13(1) 20. Is payment of wages in taverns, retail stores and other places of amusement C 95 Art prohibited? 13(2)

Exception: Persons employed in such establishments can be paid at their place C 95 Art of work 13(2)

21. Do employees have the right to final settlement of all wages due within a C 95 Art reasonable time of termination? 12(2) Information on wages 22. Before commencing employment are employees entitled to be notified of: C 95; Art a. the rates of wages payable; 14(a); b. the method of calculation; R 85 Para 6 c. the periodicity of wage payments; the place of payment; and d. the conditions under which deductions may be made? 23. When conditions change are employees entitled to be notified of: C 95; Art a. the rates of wages payable; 14(b); b. the method of calculation; R 85 Para 6 c. the periodicity of wage payments; d. the place of payment; and e. the conditions under which deductions may be made? 24. Are employers required to give employees a wages statement with each C 95; Art payment which shows: 14(b); a. the gross amount of wages earned; R 85 Para 7 b. any deductions made; c. the reasons for any deductions; and d. the net amount of wages due?

PAID ANNUAL LEAVE

Sources of indicators

The ILO has included paid annual leave as a legal framework indicator within its current set of decent work indicators.6 The legal framework indicator in the ILO manual on decent work indicators considers whether three key Conventions have

6 International Labour Organisation, Decent Work Indicators, Concepts and Definitions (2012), 94. 193

been ratified: the Holidays with Pay Convention (Revised) 1970 (Convention 132), the Holidays with Pay Convention 1936 (Convention 52), and the Holidays with Pay (Agriculture) Convention 1952 (Convention 101). Framework indicators in relation to paid annual leave are therefore derived from these three instruments, and their associated Recommendations.

Whilst these instruments do not expressly state that they only apply to full time employees, it can be implied from the content of the Part-Time Work Convention 1994 (Convention 175)7 that the standards in Convention 132, Convention 52 and Convention 101 envisage application to full time employees only. The framework is therefore expressly noted to pertain to paid annual leave for full time employees.

Table of decent work indicators for paid annual leave (for full time employees)

Source(s) of indicator Indicator Conv/ Art/ Rec Para Application 1. Are all workers entitled to annual leave? C 132 Art 2(1)

Exceptions: Seafarers are expressly excluded from C 132 and are not C 132 Art 2(2) included in C 101 or C 52. Other categories of employees may be excluded if particular problems relating to enforcement, legislative or constitutional matters arise. C 52 permits employees who are employed in a wholly family C 52 Art 1(3) owned and operated business to be excluded.

Comment: C 101 relates specifically to agricultural workers, and C 52 relates to workers in commercial and industrial undertaking. These subsets of workers, when combined, cover almost all workers. The more general indicator has therefore been selected. Eligibility 2. Is the qualifying period of continuous employment 6 months or less? C 132 Art 5(2)

Comment: The earlier C 52 provides a qualifying period of 1 year. C 52 Art 2(1) 3. Are absences due to reasons beyond the employee’s control such as illness, C 132; Art 5(4); injury or maternity counted as employment for the purposes of calculating R 98 Para 7 entitlement to, or the duration of, for annual leave?

7 Article 7(c) of Convention 175 states that part time workers should ‘receive conditions equivalent to those of comparable full-time workers in the fields of… (c) paid annual leave…’

194

Length of leave 4. Is the length of leave a minimum of 3 working weeks per year worked? C 132 Art 3(3)

Comment: There are earlier standards regarding length of leave. C 101 does not provide any specific standard as to the length of leave, although the associated R 93 suggests a minimum of 1 working week per year, with R 93 Para 1; 2 increases for persons under the age of 18.

C 52 provides that length of leave must:  be a minimum of 6 working days per year worked for employees over C 52 Art 2(1) the age of 16 and  increase with length of service. C 52 Art 2(5)

C 52 also provides that the length of leave for persons under 16 years of age C 52 Art 2(2) shall be a minimum of 12 days per year worked. This standard is also reflected in R 93. R 93 Para 4 5. Is it prohibited to include public holidays as part of the minimum annual C 132; Art 6(1); leave period? C 52; Art 2(3)(a); C 101 Art 5(d) 6. Is it prohibited to include absence due to sickness as part of the minimum C 52 Art annual leave period? 2(3)(b)

Comment: C 101 allows temporary absence due to sickness or accident to be C 101 Art 5(d) taken as annual leave if this is ‘in accordance with the established procedure’. C 132 also makes prohibition of using annual leave for temporary C 132 Art 6(2) sickness an option that countries may consider.

195

Taking leave 7. Is leave to be taken at a time set by the employer in consultation with the C 132 Art 10(1) employee?

Exception: If the time leave is to be taken is fixed by regulation, collective C 132 Art 10(1) agreement, arbitration award or other means consistent with national practice then it can be set in another manner. 8. Is the employer required to take into account both work requirements and C 132 Art 10(2) the opportunities for rest and relaxation available to employee when setting annual leave? 9. Is the employer required to give the employee reasonable advance R 98 Para 9(2) notification of the date at which the annual holiday with pay is to begin? 10. Are there provisions that if leave can be divided into parts at least one part C 132 Art 8(2) must be an uninterrupted period of at least 2 weeks?

Exception: The uninterrupted part may be shorter if this is provided for in an agreement applicable the employer and employee.

Comment R 47 & 93 provide the rationale for not allowing division, stating R 47; Para 2; that ‘care should be exercised to ensure that … [division does] not run R 93 Para 6 counter to the purpose of the holiday, which is to enable the employed person to make good the loss of physical and mental forces during the course of the year.’ 11. Is the employee required to take a minimum period of uninterrupted leave C 132 Art 9(1) within 12 months of earning it? 12. Is the employee required to take all leave in excess of the minimum period C 132 Art 9(2) within 18 months of earning leave?

Exception: The time for taking leave can be extended with consent of the C 132 Art 9(2) employee, but a maximum time limit for deferring leave must be stated. 13. Is agreement to forgo taking annual leave either with pay for C 132; Art 12; compensation or otherwise prohibited? C 52; Art 4; C 101 Art 8 Exception: If allowing annual holiday to be forgone (for leave or other consideration) would be appropriate to national conditions it may be C 132 Art 12 permitted 14. Are employees who have worked for less than 1 year, but more than the C 132; Art 4(1); minimum period of service to become eligible for leave entitled to take a C 101 Art 5(c) proportionate amount of leave? Payment whilst on annual leave 15. Is the employee to be provided with his or her usual remuneration during C 132; Art 7(1); the period of annual leave? C 52; Art 3; C 101 Art 7 Exception: If an employee engages in paid work during his or her annual C 52; Art 5; leave C 52 permits deductions from the annual leave payment in respect of the C 132 Art 13 days worked to be made. C 132 also permits rules to be made to control this situation. 16. Does the remuneration while on annual leave require the employee to be R 98 Para paid the cash equivalent of any remuneration in kind? 11(2) 17. Is payment of remuneration to be made in advance of leave unless there is C 132 Art 7(2) a specific agreement otherwise? 18. If the employee is paid on a piece work basis does the law require average R 47 Para 4 earnings to be calculated in a manner that will nullify as far as possible fluctuations in earnings?

196

Unused leave on termination of employment 19. Are employees who have completed the minimum period of service for C 132; Art 11; entitlement to leave but who are terminated before taking leave entitled to C 52; Art 6; have unused leave paid out on termination? C 101 Art 9

Comment: C 52 & 101provide that unused annual leave is to be paid out only C 52; Art 6; if the employee is not terminated because of his or her misconduct C 101 Art 9

MATERNITY PROTECTION

Sources of indicators

The ILO has included maternity leave (which covers not only the length of leave, but also benefits whilst on leave, health protection and protection from discrimination) as a legal framework indicator within its current set of decent work indicators.8 In order to reflect the broader nature of this group of decent work indicators, this framework refers to maternity protection. The ILO observed that ‘whilst the Maternity Protection Convention, 2000 (No. 183) is the most up-to-date convention… earlier relevant instruments (the Maternity Protection Convention, 1919 (No. 3) and Maternity Protection (revised) Convention, 1952 (No. 103) are, however, still in force in certain countries.’9 All three Conventions have therefore been included as part of the ILO legal framework indicator on maternity leave. As the framework indicators developed in this chapter align, where possible, with the content of the ILO’s decent work indicators, framework indicators in relation to maternity protection are derived from these instruments and their related Recommendations.

The Social Security (Minimum Standards) Convention 1952 (Convention 102), which specifies levels for periodic maternity benefit payments, is also included as part of the ILOs decent work legal framework indicators on maternity leave. Convention 102 does not provide additional specific standards that affect the individual employment relationship, as it instead deals with State social security systems. The indicators on maternity protection contained in this chapter have not

8 International Labour Organisation, above n 7, 98. 9 Ibid. 197

used Convention 102 as a possible source of standards from which indicators could be derived.

Whilst these instruments do not expressly state that they only apply to full time employees, it can be implied from the content of the Part-Time Work Convention 1994 (Convention 175)10 that the standards in Convention 3, Convention 103 and Convention 183 envisage application to full time employees. The framework is therefore expressly noted to pertain to maternity protection for full time employees. The broad areas that the indicators are grouped by have been adapted from those provided in the ILO report, Maternity At Work.11

Table of decent work indicators for maternity protection (for full time workers)

Source(s) of indicator Indicator Conv/ Art/ Rec Para Application 1. Are all employed women provided with maternity protection? C 183 Art 2(1)

Exception: Law may exclude limited categories of employees when C 183 Art 2(2) application to them would raise special problems of a substantial nature.

Comment: C 3 only applies to women in industrial and commercial C 3 Art 3 undertakings. C 103 applies to women in industrial, non industrial & C 103 Art 1(1) agricultural undertakings. Both C 3 and C 103 allows businesses where only family members are employed to be exempted and this may be an example of C 3; Art 3; a category of employees that would raise special problems of a substantial C 103 Art 1(6) nature if maternity protection were extended to them.

10 Article 7(a) of Convention 175 states that part time workers should ‘receive conditions equivalent to those of comparable full-time workers in the fields of… (a) maternity protection…’ 11 International Labour Organisation, Maternity at Work: A review of national legislation. Findings from the ILO Database of Conditions of Work and Employment Laws (2nd ed, 2010). 198

Duration of leave 2. Is at least 12 weeks of paid maternity leave provided? C 3; Art 3; C103 Art 3(2)

Comment: C 183 requires a minimum of 14 weeks paid maternity leave; R C 183 Art 4(1) 191 recommends a minimum of 18 weeks R 191 Para 1(1) 3. Are employees required to take maternity leave for a period of 6 weeks C 3; Art 3(a); after giving birth? C 103; C Art 3(3); 183 Art 4(4) Exception: The requirement of a compulsory period of post-birth leave can be altered if agreed at national level by a tripartite forum. C 183 Art 4(4) 4. Does the employee have the right to take 6 weeks leave prior to the C 3 Art 3(b) estimated date of birth, on presentation of a medical certificate that estimates the date of birth?

Comment: C 103 provides that legislation can allow the non-compulsory C 103 Art 3(3) portion of leave to be taken either before or after, or partially before and partially after, giving birth. C 183 does not specify when the non-compulsory C 183 Art 4 period of leave is to be taken, although R 191 indicates that the employee R 191 Para should be free to choose when this is taken. 1(3) 5. Can the prenatal portion of maternity leave be extended by any difference C 3; Art 3 between the estimated and actual date of childbirth without a reduction in the C103; (c); Art length of compulsory postnatal leave? C 183 3(4); Art 4(5) 6. If the employee has a medically certified illness that necessitates more C 103; Art3(5) leave, either while pregnant or after birth, do laws provide for a period of &(6); additional leave? C 183 Art 5

Comment: Law may specify a maximum duration for the period of additional C 183 Art 5 leave and may also specify other rules as to its nature. 7. Does the law provide for an extension of maternity leave in the event of R 191 Para multiple births? 1(2)

199

Cash benefits 8. Are any conditions for eligibility for cash benefits able to be satisfied by a C 183 Art 6(5) large majority of employees? 9. Are cash benefits whilst on maternity leave at least 66% of the employee’s C 103; Art 4(6); prior earnings? C 183 Art 6(3)

Exception: C 183 provides that if a country’s economy and social security C 183 Art 7(1) system are insufficiently developed cash benefits may be equal to social security benefits payable in the case of sickness or temporary disability. The C 3; Art 3(c); guiding principle for the level of cash benefit is that it should be sufficient for C103; Art 4(2); the healthy maintenance of both mother and child. C183 Art 6(2)

Comment: R 191 recommends the cash benefit be 100% of prior earnings, where practicable. R 191 Para 2(1) 10. Are cash benefits provided either out of public funds or a compulsory C 3; Art 3(c); social insurance scheme? C 103 Art 4(4); C 183 Art 6(8) Exception: C 183 allows an exception if direct payment was part of national law or practice prior to a State adopting C 183 or if, after adopting C 183, C 183 Art 6( 8) there is express tripartite agreement at national level.

Comments: C 103 expressly prohibits direct payment of cash benefits by the C 103 Art 4(8) individual employer.

R 191 provides that any contribution to social insurance should be made R 191 Para 4 paid both in respect of male and female employees. 11. If leave is extended due to a difference between the estimated and actual C 3 Art 3(c) date of birth are benefits paid during this extended period? Employment protection and non-discrimination 12. Are employers prohibited from requiring a woman to provide a C 183 Art 9(2) pregnancy test or certificate of such a test when applying for a job?

Exception: If laws prohibit particular types of work for pregnant women or if C 183 Art 9(2) there nature of the work presents a significant risk to the health of the woman or child a test can be required. 13. Is the employer prohibited from giving notice of dismissal to an C 3; Art 4; employee while she is on maternity leave? C103; Art 6; C 183 Art 8(1) Exception: It is possible for the employer to terminate an employee on grounds unrelated to the pregnancy or the birth of the child or nursing. The C 183 Art 8(1) burden of proving the dismissal is unrelated to the pregnancy or the birth of the child or nursing rests on the employer. 14. Is the employer prohibited from giving notice of dismissal to while she is C 3; Art 4; pregnant? C103; C Art 6; 183 Art 8(1) Exception: It is possible for the employer to terminate an employee on grounds unrelated to the pregnancy or the birth of the child or nursing. The C 183 Art 8(1) burden of proving the dismissal is unrelated to the pregnancy or the birth of the child or nursing rests on the employer. 15. Is the employee guaranteed the right to return either to the same position C 183 Art 8(2) or an equivalent position on the same pay at the end of her maternity leave?

200

Health protection 16. Is the employee permitted to take breaks of half an hour twice a day in C 3 Art 3(d) order to breastfeed?

Comments: Later Conventions and Recommendations do not specify the C 103; C Art 5(1); amount of time to be given for nursing breaks, but do provide that nursing 183 Art breaks shall be provided. 10(1)

Law can require that a medical certificate be produced before nursing R 191 breaks are granted. Para 7 17. Are nursing breaks to be counted as working hours and paid accordingly? C 103; Art 5(2); C 183 Art 10(2) 18. Is it possible, if the employer agrees, for the employee to combine R 191 Para 8 nursing breaks to allow for the reduction of hours of work at the beginning or end of the day? 19. Is the employer required, where practicable to provide hygienic facilities R 191 Para 9 for nursing at or near the place of work? 20. Are pregnant or breastfeeding employees prohibited from being required C 183 Art 3 to perform work that has significant risk for the health of the mother or her child? 21. Are pregnant or breastfeeding employees prohibited from being required R 191 Para to perform night work if a medical certificate stating that night work is 6(4) incompatible with pregnancy or breastfeeding is presented? 22. In the event that the employee’s usual job presents a significant risk for R 191 Para the health of the mother or her child are employers required to provide an 6(2) alternative in the form of elimination of risk, adaptation of conditions of work, transfer to another post without loss of pay, or paid leave when other alternatives are not possible? 23. Are employees guaranteed the right to return to the same, or an R 191 Para equivalent, job on the risk for the health of the mother or her child has 6(5) passed? 24. Does the employee have the right to leave her workplace, after notifying R 191 Para her employer, in order to undergo medical examinations related to her 6(6) pregnancy? Other related leave 25. Are adoptive mothers able to access maternity leave? R 191 Para 10(5) 26. In the event of the death of the mother is the father entitled to take leave R 191 Para equal to the unexpired portion of post-birth maternity leave? 10(1) 27. In the event of sickness or hospitalisation of the mother following birth R 191 Para which prevents her from being able to care for the child is the father entitled 10(2) to take leave equal to the unexpired portion of post-birth maternity leave?

201

TERMINATION OF EMPLOYMENT

Sources of indicators

The ILO has included termination of employment as a legal framework indicator within its current set of decent work indicators.12 The ILO legal framework indicator considers whether one Convention has been ratified: the Termination of Employment Convention 1982 (Convention 158). This was arguably the most contentious of the ILO’s Conventions during the review of international labour standards conducted by the Cartier Working Party. Convention 158 was the only instrument that this Working Party was unable to categorise as either up to date or in need of revision.13 A subsequent Tripartite Meeting of Experts to Examine the Termination of Employment Convention, 1982 (No. 158), and the Termination of Employment Recommendation, 1982 (No. 166), held in April 2011, was also unable to reach consensus as to whether Convention 158 does set relevant, internationally applicable standards.14 As of September 2012 the Convention had 36 ratifications, with one denunciation.

This controversy, and the extent to which the standards contained in Convention 158 are accepted, is acknowledged. However, the framework developed in this chapter aligns, where possible, with the content of the ILO’s decent work indicators, which do recognise Convention 158. Framework indicators in relation to termination of employment are therefore derived from this Convention and the associated Recommendation.

Some of the content of Convention 158 and Recommendation 166 involves social security measures which, as they do not necessarily involve regulation of the relationship between individual employers and employees, may fall out of the scope of the framework. However, because these social security measures can be funded

12 International Labour Organisation, above n 7, 123. 13 International Labour Organisation, above n 1, 1 [3]. 14 International Labour Organisation, ‘Final Report, Tripartite Meeting of Experts to Examine the Termination of Employment Convention, 1982 (No. 158), and the Termination of Employment Recommendation, 1982 (No. 166)’ (Geneva, 18 – 21 April 2011) [124], [127]. 202

either directly by the employer or by the State, the various social security measures provided in Convention 158 and Recommendation 166 have been included as indicators. The indicators therefore cover all the substantive content of Convention 158, and only exclude procedural elements related to the process of ratification. The broad areas that the indicators are grouped by have been adapted from the parts and divisions that are provided within the text of Convention 158.

Table of decent work indicators for termination of employment

Source(s) of indicator Indicator Conv/ Art/ Rec Para Application 1. Are all employees protected by the laws regulating termination of C 158 Art 2(1) employment?

Exception: Employees that are on fixed term or fixed task contracts, serving C 158 Art 2(2) probation periods or engaged on a causal basis can be excluded. Other categories of employees can be excluded if ‘special problems of a C 158 Art 2(5) substantial nature arise’ due to the employment context. 2. If the law permits probation periods, are probation periods required to be C 158 Art stated in advance of employment commencing? 2(2)(b) 3. If the law permits probation periods, are probation limited to a reasonable C 158 Art duration? 2(2)(b) 4. If employees on fixed term or fixed task contracts are excluded from R 166 Para protections are there safeguards to ensure that fixed term contracts are not 3(2) used to avoid statutory protections?

Comment: Safeguards may include: (a) limiting recourse to contracts for a specified period of time to cases in which, owing either to the nature of the work to be effected or to the circumstances under which it is to be effected or to the interests of the worker, the employment relationship cannot be of indeterminate duration; (b) deeming contracts for a specified period of time (except for those mentioned in (a)) to be contracts of employment of indeterminate duration; (c) deeming contracts for a specified period of time (except for those mentioned in (a)), when renewed on one or more occasions, to be contracts of employment of indeterminate duration.

203

Justification for termination 5. Can the employee only be terminated for a valid reason associated with C 158 Art 4 the employee’s capacity or conduct or the operational needs of the employer? 6. Are the following expressly stated not to constitute valid grounds for C 158 Art 5 termination? a. Union membership or participation in union activities outside working hours or, with the consent of the employer, within working hours; b. seeking office as, or acting or having acted in the capacity of, a workers' representative; c. the filing of a complaint or the participation in proceedings against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities; d. race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; e. absence from work during maternity leave; C 158 Art 6 f. temporary absence from work due to illness or injury that is medically certified in accordance with the law; R 166 Para 5(a) g. age, subject to laws regarding retirement; and R 166 Para h. absence due to compulsory military service or other civic (5)(b) obligations. Procedure for termination 7. Is the employer prohibited from terminating an employee for reasons C 158 Art 7 related to the employee’s conduct or performance before he/she is provided an opportunity to defend him- or herself against the allegations made unless the employer cannot reasonably be expected to provide this opportunity? 8. Does the employee have the right to be assisted by another person when R 166 Para 9 defending him- or herself against allegations of misconduct or unsatisfactory performance? 9. If the employee’s conduct is such that it would only justify termination if R 166 Para 7, 8 repeated on one or more occasions, is the employer required to give the employee:

a. a written warning; and b. appropriate instructions; and c. a reasonable period of time for improvement

before terminating the employee for further repeated misconduct? 10. If the employer does not act within a reasonable time after it has R 166 Para 10 knowledge of the misconduct is the employer deemed to have waived its right to terminate? 11. Is the employer required to notify the employee is writing of its decision R 166 Para 12 to terminate? 12. Is the employee entitled to receive, on request, a written statement from R 166 Para the employer stating reasons for termination? 13(1) 13. Is the employee entitled to receive, on request, a certificate from the R 166 Para 17 employer stating the dates of commencing and finishing employment and the type of work done? 14. Is the employee entitled to receive, on request, a written evaluation from R 166 Para 17 the employer of his or her conduct and performance?

204

Procedure of appeal 15. Does the law allow an employee that thinks he or she has been C 158 Art 8(1) dismissed without justification the right to appeal his or her termination to an impartial body?

Exception: The right to appeal may be waived if it is not exercised within a C 158 Art 8(3) reasonable time. 16. Does the burden of proving that a valid reason for termination existed C 158 Art fall on the employer? 9(2)(a) 17. Does the law provide for recourse to a procedure of reconciliation, R 166 Para 14 either before or during appeal proceedings? 18. Does the appeal body have the power to order reinstatement, C 158 Art 10 compensation or other relief as appropriate to the situation? Period of notice 19. Is the employee whose employment is to be terminated entitled to a C 158 Art 11 reasonable period of notice?

Exception: Notice does not have to be provided if the employee is guilty of C 158 Art 11 misconduct of such a nature that it would be unreasonable to require the employer to continue his employment during the notice period. 20. Is the employee permitted to take a reasonable amount of time off at R 166 Para 16 time convenient to both parties without loss of pay during the notice period in order to seek other employment? Severance allowance and other income protection 21. Is an employee who is terminated at the initiative of the employer C 158 Art 3 entitled to: a. severance allowance or other separation benefits, which are based C 158 Art in part on the length of service and the level of wages and are paid 12(1) for directly by the employer or from a fund constituted by employers’ contributions; or b. social security benefits, such as unemployment, old age or invalidity benefits; or c. a combination of severance allowance and social security benefits.

Comment: If an employee has been terminated because of serious C 158 misconduct he or she may become ineligible for income protection. Art 12(3) 22. If the employee has been terminated due to redundancy does the State R 166 Para 26 provide income protection during any course of training or retraining? 23. If the employee has been terminated due to redundancy does the State R 166 Para 26 provide partial or full reimbursement for costs of any course of training or retraining? 24. If the employee has been terminated due to redundancy does the State R 166 Para 26 provide partial or full reimbursement for costs associated with changing residence in order to take up a new job?

205

Termination because of redundancy (economic, technological, structural or similar reasons) 25. If an employer is considering termination(s) due to redundancy is it required to:

a. provide workers’ representatives with information on the reasons C 158 Art for considering terminations, the number and categories of 13(1)(a) employees likely to be affected and the period of which terminations are intended to be carried out a reasonable time before terminations commence; and b. consult with workers’ representatives on measures to avert or C 158 Art minimise terminations and mitigate the adverse effects of 13(1)(b) termination on employees a reasonable time before terminations commence? C 158 Art Exception: If the percentage of employees is below a certain threshold, set 13(2) in law, then notification is not required. R 166 Comment: Measures which could be considered with a view to averting or Para 21 minimising terminations include, restriction of hiring, spreading the workforce reduction over a certain period of time to permit natural reduction of the workforce, internal transfers, training and retraining, voluntary early retirement with appropriate income protection, restriction R 166 of overtime and reduction of normal hours of work. Where a temporary Para 22 reduction of normal hours of work would be likely to avert or minimise terminations of employment due to temporary economic difficulties, consideration should be given to partial compensation for loss of wages for R 166 the normal hours not worked. Employers could also assist employees in Para their job search by providing direct contacts with other employers. 25(2) 26. If an employer is considering termination(s) due to redundancy is it C 158 Art required to notify the competent authority as early as possible of reasons for 14(1) considering terminations, the number and categories of employees likely to be affected and the period of which terminations are intended to be carried out? C 158 Exception: If the percentage of employees is below a certain threshold, set Art in law, then notification is not required. 14(2) 27. Does the law specify a minimum period of time between notifying the C 158 Art competent authority of proposed terminations by the employer and carrying 14(3) out the terminations? 28. Does the law require that the employer establishes criteria for C 158 Art determining who will be terminated due to redundancy that take into 23(1) account both the interests of the establishment and the interests of employees in advance of commencing terminations? 29. If the employer rehires employees are employees who have been made R 166 Para redundant given priority against employees with comparable qualifications 24(1) for a specified amount of time following their termination?

206

CHAPTER 7

APPLYING THE FRAMEWORK

INTRODUCTION

This chapter demonstrates use of the new framework by providing a baseline assessment of the extent to which Vanuatu’s existing Employment Act [Cap 160] promotes decent working conditions.

It is emphasized that the framework is a tool for legislative assessment and knowledge building which assumes that employment law and policy will be developed through a process of informed consultation with all interested parties. The broad question of whether Vanuatu’s employment law should conform to any of the indicators is left to this consultation process.

It should be remembered that the framework is not intended to be the only thing that needs to be taken into account during the issue identification and policy formulation process. The framework assumes that one policy consideration should be the need to achieve decent working conditions for employees. The framework provides information, in the form of non-prescriptive indicators, as to the sorts of things that decent working conditions for individual employees should cover. The framework does not maintain that achieving decent working conditions is the only policy goal that should be considered. Indeed competing policy objectives relating to the desire to create jobs are likely, with the particular competing policy objectives and the relative weight given to them being context specific.

It should also be remembered that making “good law” in terms of its content on paper should not be seen as the purpose of any law reform exercise. Instead, law should be seen as a means to an end, with the end goal being to ensure that the law reform meets the desired policy objectives. The broader context will determine the actual impact of particular regulations in practice and it is crucial that these dimensions also be taken into account, both in identifying key issues and deciding the best ways of overcoming those issues and achieving desired policy objectives.

207

The baseline assessment that follows focusses on each of the four headings of indicators set out in the framework, namely protection of wages, paid annual leave, maternity protection and termination of employment. In regard to each area it raises matters that could be considered further by all stakeholders, taking into account the broader policy and socio-economic implications of introducing changes, as part of a consultative process. These areas are listed within summaries that precede the more detailed or technical analysis presented in the following tables.

PROTECTION OF WAGES

Summary

There are seven areas that law reformers should consider regulating in respect of the protection of wages: application (or who the law covers); medium of payment; payment in event of employer bankruptcy; freedom to dispose of wages; deductions from wages; the period, time and place of payment; and information on wages. Whilst Vanuatu’s Employment Act [Cap 160] broadly conforms to the indicators in this area there are some minor reforms that could be made to increase conformity further.

Application

Although the Employment Act does not comprehensively apply to all workers, it is in conformity with this indicator as exclusion of categories of workers from wages protection laws is permitted by the indicator.

 Consideration could be given extending the protections in respect of paying wages to workers who are recruited from overseas and are not ordinarily resident in Vanuatu in order to ensure fully comprehensive application of wages protections to all workers. (See indicator 1.)

208

Medium of payment

The only gap in the provisions of Employment Act in respect of medium of payment is that there is no requirement that wages must be paid directly to the worker, unless a collective or individual agreement permits paying to the third party.

 Consideration could be given to including a provision requiring that wages be paid directly to the worker, unless a collective or individual agreement permits paying to the third party. (See indicator 4.)

Payment of wages in event of employer bankruptcy

The law governing payment of wages in event of employer bankruptcy is the Companies Act [Cap 191]. Its provisions conform to the indicator.

Freedom to dispose of wages

The Employment Act regulates work stores, but provides does not otherwise prohibit restrictions being placed on how an employee disposes of his or her wages.

 Consideration could be given to including a provision which expressly states that limits on how an employee spends his or her wages are prohibited. (See indicator 6.)

Deductions from wages

The Employment Act does not conform closely to the indicators in respect of deductions from wages. Whilst a labour officer must approve any deduction that is being made because of the employee’s negligent work or damage to the employer’s property, and there is a limit that deductions cannot exceed 1/3 of the remuneration, these restrictions may not adequately regulate deductions in accordance with the indicators.

Consideration could be given to the following:

209

 Including a safeguard to allow the employee to apply to have the amount of the deduction reduced if the wage after a 1/3 deduction is not sufficient for the employee to support his or her family. An example safeguard would be allowing an employee to appeal to a labour officer. (See indicator 9.)

 Given that the 1/3 limit does not apply to all deductions, placing a limit on all deductions from wages, including attachments and assignments. (See indicators 9 and 13.)

 Amending section 21(1) to include more detail on the process to be followed and the matters to be considered before a labour officer will approve a deduction of wages in relation to loss or damage suffered by the employer. (See indicators 10 and 11.)

Period, time and place of payment

The only gaps in the provisions of the Employment Act in respect of the period, time and place of payments is that the wages intervals for pieceworkers and task workers exceed the interval provided in the indicators.

 Consideration could be given to amending section 16(7) to provide that pieceworkers and task workers have their wages paid at intervals of no more than 15 days. (See indicators 16 and 17.)

Information on wages

The Employment Act contains some provisions about information on wages. These provisions are not, however, specific as to what information should be given so do not entirely conform to the indicators.

Consideration could be given to the following

 Amending section 9 by requiring that ‘information on the amount and mode of remuneration’ explicitly addresses the rates of wages payable, the method of calculation, the periodicity of wage payments, the place of payment and the conditions under which deductions may be made. (See indicator 22.) 210

 Requiring employers to provide a statement of the rates of wages payable, the method of calculation, the periodicity of wage payments, the place of payment and the conditions under which deductions may be made every time that wage conditions change. (See indicator 23.)

 Amending section 17(4) by requiring that ‘details of the way in which the remuneration has been calculated’ explicitly addresses the gross amount of wages paid, any deductions made, the reasons for any deductions and the net amount of wages due. (See indicator 24.)

211

Assessment of current law All references are to the Employment Act [Cap 160] unless otherwise stated Indicator Conforms Comment/detail of any differences between law and indicator (including (Y/N/?) where the law exceeds and where the law provides less than the indicator) Application 1. Do the laws on protection of wages apply to all employees? Y: s 16(9) Restrictions on the medium of payment and the period, time and place of payment do not apply to employees who are not ordinarily resident in Exception: Categories of workers other than manual labourers and Vanuatu and who have been recruited from outside of Vanuatu. The Labour domestic workers can be excluded from Convention standards if (Work Permits) Act [Cap 187] requires local labour to be sourced before application would be inappropriate immigrant labour to be used, which, if the law is applied correctly means that in practice excluded workers cannot be manual labourers or domestic workers. As such the category of employees falls with the permitted exception. Medium of Payment

212 2. Is there a requirement that wages must be paid in legal tender? Y: S16(1) Wages must usually be paid in cash, but may be paid by bank cheque with & (2) written approval of a labour officer if this is customary, is reasonable because Comment: Legal tender includes payment by bank cheque, postal of special circumstances, or is done with the consent of the employee. cheque or money order where payment in this manner is customary, special circumstances make such payment necessary, Partial payment in allowances in kind is permitted, but is regulated by or there is a collective or individual agreement permitting such conditions that align exactly with exception to the indicator. payments. It excludes promissory notes, vouchers or coupons.

Exception: Partial payment in allowances in kind permitted in situations where such payment is customary and desirable if: 3. there are measures to ensure that the value of allowances in kind is fair and reasonable; and 4. the allowance in kind is appropriate for the employee and his or her family 3. Is payment in alcohol or drugs prohibited? Y: s 16(3) Payment in ‘intoxicating liquor or noxious drugs’ is prohibited. 4. Must wages be paid directly to the worker? N The law is silent on this matter.

Exception: Law may permit payment to others in accordance with collective or individual agreements

Payment in event of employer bankruptcy 5. Are wages a privileged debt? Y: s 308(1) The amount of wages that can be privileged is limited to a sum of VT & (2) 1,000,000 per claimant. Comment: A maximum amount of privileged debt may be specified Companies Act [Cap 191] Freedom to Dispose of wages 6. Are limits on how an employee spends his or her wages N The law is silent on this matter. prohibited? 7. Are measures to ensure that employees are not coerced to use Y: s The law provides that ‘section 68 (1) Subject to the written approval of a work stores provided? 68(1)(a) labour officer an employer may establish at or near a place of employment a store for the sale of any commodities to the employees, on the condition that –

213 (a) the employees concerned shall be free from any coercion to use such stores…’

8. If the only shops accessible to employees are work stores, are Y: s Further conditions in section 68(1) are there measures to ensure work stores provide fair and reasonable 68(1)(c) & ‘(b) the goods shall be sold mainly for the convenience of the prices? (d); s 69 employees and not for securing profit to the employer; (c) the accounts of the stores shall be kept separate from the accounts of other undertakings of the employer and shall be readily available for inspection by a labour officer; (d) the prices charged shall be fair and reasonable, and shall be displayed in a clear and legible manner.’ Section 69 requires prices to be set in relation to prices in Port Vila or Luganville or the cost to the employer, including transport. Deductions from wages 9. Are there limits on deductions from wages to ensure that the ?: s 21(2) Deductions made pursuant to s 21 must not exceed 1/3 of the employee’s employee is still able to maintain his or her family after deductions remuneration. However, as the basic needs poverty line was estimated to be are made? 2866 vatu per week for a person living in Port Vila, and household poverty line in Port Vila was estimated to be 16,864 vatu per week depending on the number of family members the worker supports,1 and their initial wage, a 1/3 deduction might be too high.

1 Vanuatu National Statistics Office and UNDP Pacific Centre Suva, Vanuatu Hardship and Poverty Report 2012 (2013) 34.

There is, potentially, a further safeguard in respect of section 21(1), which permits deductions for loss or damage caused by the employee. Such deductions can only be made after gaining written approval of a labour officer. Arguably the need to seek approval of the labour officer implies that the labour officer will check that the level of the deduction leaves enough for the employer to maintain his or her own family on, but there is no specified limit on these deductions.

The 1/3 limit only applies to deductions made in accordance with s 21(1)&(2). Section 21(3) permits deductions made by the employer at the employee’s request for pension fund subscriptions. This means that the employee can voluntarily save at a level that places his or her family into hardship. 10. Are deductions for reimbursement of loss or damage suffered N Section 21(1) only permits deductions for reimbursement of loss or damage

214 by the employer only permitted if: with prior written approval of a labour officer. There is no regulation of the c. it can clearly be shown that the employee was matters the labour officer must consider before approving a deduction, or any responsible; and requirement that the employee must be given an opportunity to explain why d. the employee has been given an opportunity to explain deductions should not be permitted. why deductions should not be permitted?

11. Are there limits to ensure that deductions for reimbursement of N Section 21(1) only permits deductions for reimbursement of loss or damage loss and damage do not exceed the actual amount of loss or with prior written approval of a labour officer, but there is no express damage? regulation to ensure that the amount of the deduction does not exceed the actual amount of the loss. 12. Are deductions for tools, material or equipment supplied by the Y: s Statute recognizes that deductions can be made if the tools, material or employer only permitted if such deductions: 21(2)(b) equipment are being provided at the employee’s request for use outside of the d. are a customary practice; or course of employment. This constitutes authorisation by a legally established e. have been collectively agreed to; or procedure. f. have been authorised by a legally established procedure? 13. Are there limits on the attachment or assignment of wages to N: s 21(2) Section 21(2) provides that deductions must not exceed 1/3 of the employee’s ensure that the employee to still able to maintain his or her family remuneration but this limit is expressly stated not to apply in the case of an after deductions are made? attachment or assignment of wages ordered by the court.

Period, time and place of payment 14. For employees whose wages are calculated on an hourly, daily Y: s 16(7) The maximum wage period is 15 days. However, allowances and accessories or weekly basis is the maximum wage period 16 days or less? to wages may be paid once a month. 15. For employees on a fixed monthly or annual salary is the Y: s 16(7) The maximum period is 1 month. maximum wage period 1 month or less? 16. For employees whose wage is calculated on a piecework basis N: s 16(7) The law allows pieceworkers to be paid monthly. is the maximum wage period 16 days or less? 17. For employees whose wage is on a calculated on a task N: s 16(7) The law allows taskworkers to be paid monthly. completion basis: c. are payments in proportion to the amount of the task completed required at least every 16 days; and d. is final payment required within 14 days of completion of the task? 18. Are payments in cash to be made on workdays only? Y: s 16(4) If ‘another arrangement known to the employee is more appropriate in any

215 individual case’ the day of payment can be varied. 19. Are payments in cash to be made at or near the place of Y: s 16(4) If ‘another arrangement known to the employee is more appropriate in any

employment? individual case’ the place of payment can be varied. 20. Is payment of wages in taverns, retail stores and other places of Y: s 16(5) The exception to the indicator is also included in s 16(5). amusement prohibited?

Exception: Persons employed in such establishments can be paid at their place of work 21. Do employees have the right to final settlement of all wages Y: s 16(8) Settlement is required ‘as soon as service has ceased.’ due within a reasonable time of termination? Information on wages 22. Before commencing employment are employees entitled to be ?: s 9 Section 9 requires all contracts of employment to state, amongst other things, notified of: ‘the amount and the mode of payment of remuneration’. This provision e. the rates of wages payable; generally conforms to the indicator, but is not as specific as the indicator in f. the method of calculation; respect of the information to be provided. g. the periodicity of wage payments; h. the place of payment; and i. the conditions under which deductions may be made? 23. When conditions change are employees entitled to be notified N There is no express requirement that this information be provided, although of: the receipt given in accordance with s 17(4) at the time remuneration is paid f. the rates of wages payable; may, in effect, provide some or all of this information.

g. the method of calculation; h. the periodicity of wage payments; i. the place of payment; and j. the conditions under which deductions may be made? 24. Are employers required to give employees a wages statement ?: s 17(4) Section 17(4) provision is general, and requires the employer to provide a with each payment which shows: statement that ‘gives details of the way in which the remuneration has been e. the gross amount of wages earned; calculated’. Whilst this may cover all of the information required by the f. any deductions made; indicator it does not expressly specify that all four pieces of information be g. the reasons for any deductions; and provided. h. the net amount of wages due?

216

PAID ANNUAL LEAVE (FULL TIME EMPLOYEES)

Summary

There are six areas that law reformers should consider regulating in respect of paid annual leave: application (or who the law covers); eligibility; length of leave; taking leave; payment whilst on annual leave; and unused leave on termination. Whilst Vanuatu’s Employment Act broadly conforms to the indicators in this area there are some reforms that could be made to increase conformity. Some of these reforms raise issues about the appropriate amount of benefits so may be quite controversial. They must be considered in light of the broader socio-economic consequences of any changes.

Application

The provisions relating to annual leave in the Employment Act apply to all full time employees.

 Whilst it is outside the scope of these indicators, consideration could be given to extending annual leave to part time and casual workers on a pro rata basis. (See indicator 1.)

Eligibility

The Employment Act is arguably compliant with the indicators in relation to eligibility for leave, although drafting could be clearer.

 Consideration could be given to including a provision to the effect that employees are entitled to request leave, in accordance with section 30, once they have worked for more than 6 months. (See indicator 2.)

217

Length of leave

The Employment Act [does not conform to any of the indicators in this area. First, it provides leave which increases depending on length of service. The initial leave amount is 15 days per year, which meets the indicator of 3 working weeks per year (indicator 4) for persons who work 5 or less days a week, but does not meet the indicator for workers who work 6 or more days per week. After 6 years of service leave increases, and the law conforms.

Second, the law does not prohibit including public holidays as part of the annual leave with pay period. For instance, in Vanuatu 25 and 26 December and 1 January are public holidays. An employee who took leave from 24 December to 2 January has been off for 10 days and under Vanuatu’s law there is nothing to stop the employer from deducting 10 public holidays from the employee’s entitlement. Law that conforms to the indicator would, however, only allow the employer to deduct 7 public holidays from the employee’s entitlement.

Third, there is nothing which either prevents annual leave being used in respect of absence for sickness or which provides a procedure for allowing annual leave to be used for sickness.

Consideration could be given to the following:

 Revising the amount of annual leave given to workers who have worked 1 – 6 years so that it complies with the 3 working week’s requirement for all employees. (See indicator 4.)

 Including a provision that prohibits including public holidays as part of the annual leave entitlement. (See indicator 5.)

 Including a provision prohibiting the use of annual leave for the purposes of sickness unless a defined procedure is followed. (See indicator 6.) 218

 Whether the law should prohibit use of annual leave for absences from work due to sick leave. (See indicator 7.)

Taking leave

The Employment Act does not conform closely to the indicators in this area. To improve conformity the following could be considered:

 Amending section 30(3) to include a provision that, as part of the consultation process already required, the employer must consider both work requirements and the employee’s personal wishes and opportunities for rest and relaxation. (See indicator 8.)

 Including a provision requiring the employer to give the employee reasonable advance notice of when the annual holiday with pay is to begin. (See indicator 9.)

 Amending section 30(1) by stating that if leave is divided at least one part must be an uninterrupted period of at least 2 weeks, unless a shorter period is agreed by the employer and the employee. (See indicator 10.)

 Including a provision that requires employees to take a minimum period of uninterrupted leave within 12 months of earning it, and to use all leave within 18 months of earning it. (See indicators 11 and 12.)

 Introducing a provision that prohibits payment in lieu of taking leave. (See indicator 13.)

Payment whilst on annual leave

The Employment Act does not conform closely to the indicators in this area as it does not provide that the cash equivalent of payments in kind be given during annual leave, or that the payment for annual leave be given in advance. To improve conformity the following could be considered:

219

 Requiring that the remuneration paid whilst on annual leave includes both wages and other regularly received benefits and entitlements that form part of remuneration in kind. (See indicator 16.)

 Including a provision requiring that remuneration whilst on annual leave be paid in advance of taking leave. (See indicator 17.)

Unused leave on termination of employment

The Employment Act conforms to the indicator in this area.

220

Assessment of current law All references are to the Employment Act [Cap 160] unless otherwise stated Indicator Conforms Comment/detail of any differences between law and indicator (including (Y/N/?) where the law exceeds and where the law provides less than the indicator) Application 1. Are all workers entitled to annual leave? Y: s 29(1) All categories of full time employees are included.

Exceptions: Seafarers are expressly excluded from C 132 and are not It can be noted that only employees that are engaged in continuous included in C 101 or C 52. Other categories of employees may be employment, which has been interpreted as working 22 days per excluded if particular problems relating to enforcement, legislative or month, are entitled to annual leave, so part time or casual employees constitutional matters arise. C 52permits employees who are employed in are excluded. These indicators only apply to full time workers, a wholly family owned and operated business to be excluded. however.

Comment: C 101 relates specifically to agricultural workers, and C 52 relates to workers in commercial and industrial undertaking. These

221 subsets of workers, when combined, cover (almost) all workers. The more general indicator has therefore been selected.

Eligibility 2. Is the qualifying period of continuous employment 6 months or less? ?: s 29(1) Drafting is not entirely clear, but section 29(1) indicates that a person s 32 must have worked for at least 1 year in order to gain an entitlement to Comment: The earlier C 52 provides a qualifying period of 1 year. take annual leave.

However, in accordance with section 32 an employee who leaves before becoming entitled to take annual leave is entitled to have unused leave paid out. If the employer terminates the employee the minimum qualifying period is 1 month. If the employee resigns the minimum qualifying period is 6 months. The effect of section 32 is that the qualifying period is, at most, 6 months. 3. Are absences due to reasons beyond the employees control such as Y: s 29(3) Section 29(3) provides that continuous employment includes ‘any illness, injury or maternity counted as employment for the purposes of periods of absence from work caused by – calculating entitlement to, or the duration of, for annual leave? (a) an accident at work duly certified by a recognised medical practitioner; (b) illness arising from employment duly certified by a recognised medical practitioner; (c) maternity leave up to a period of 12 weeks; (d) illness duly certified by a medical practitioner up to a period of 3 months.’

Length of leave 4. Is the length of leave a minimum of 3 working weeks per year worked? ?: s 29(1) The amount of leave begins at 15 days per year, and increases, after 6 years of continuous employment to 21 days per year. It continues to Comment: There are earlier standards regarding length of leave. C 101 increase with the length of service. For employees who work 6 days does not provide any specific standard as to the length of leave, although per week the amount of leave provided in the first 6 years is less than 3 the associated R 93 suggests a minimum of 1 working week per year, with working weeks. increases for persons under the age of 18. After employees have worked for more than 6 years leave entitlement C 52 provides that length of leave must: significantly exceed the amount of leave in the indicator.  be a minimum of 6 working days per year worked for employees over the age of 16 and  increase with length of service.

C 52 also provides that the length of leave for persons under 16 years of age shall be a minimum of 12 days per year worked. This standard is also

222 reflected in R 93. 5. Is it prohibited to include public holidays as part of the minimum N The law is silent on this matter. It can be observed that for workers annual leave period? who work on an hourly wage there is no requirement that they be paid if they do not work on annual holidays. 6. Is it prohibited to include absence due to sickness as part of the N The law is silent on this matter. minimum annual leave period?

Comment: C 101 allows temporary absence due to sickness or accident to be taken as annual leave if this is ‘in accordance with the established procedure’. C 132 also makes prohibition of using annual leave for temporary sickness an option that countries may consider.

Taking leave 7. Is leave to be taken at a time set by the employer in consultation with Y: s 30(3) Section 30(3) provides that ‘The date of the annual leave shall be fixed the employee? by the employer, who shall in so far as it shall be practicable in the circumstances of the undertaking, comply with the employee's request Exception: If the time leave is to be taken is fixed by regulation, collective in this respect.’ agreement, arbitration award or other means consistent with national practice then it can be set in another manner. 8. Is the employer required to take into account both work requirements ?: s 30(3) The law is silent on this matter, although the requirement in section and the opportunities for rest and relaxation available to employee when 30(3) that the employer takes the personal wishes of the employee into

setting annual leave? account as far as practicable may implicitly cover this indicator. 9. Is the employer required to give the employee reasonable advance N The law is silent on this matter notification of the date at which the annual holiday with pay is to begin? 10. Are there provisions that if leave can be divided into parts at least one N: s 30(1) The law permits leave to be divided into ‘not more than 2 separate part must be an uninterrupted period of at least 2 weeks? periods’. It would be possible, in the first 6 years of employment, to have 2 leave periods that are each less than 2 weeks. Exception: The uninterrupted part may be shorter if this is provided for in an agreement applicable the employer and employee.

Comment: R 47 & 93 provide the rationale for not allowing division, stating that ‘care should be exercised to ensure that … [division does] not run counter to the purpose of the holiday, which is to enable the employed person to make good the loss of physical and mental forces during the course of the year.’ 11. Is the employee required to take a minimum period of uninterrupted N There is no requirement to take leave within a set time of earning it.

223 leave within 12 months of earning it? Leave can accumulate indefinitely. 12. Is the employee required to take all leave in excess of the minimum N There is no requirement to take leave within a set time of earning it. period within 18 months of earning leave? Leave can accumulate indefinitely.

Exception: The time for taking leave can be extended with consent of the employee, but a maximum time limit for deferring leave must be stated. 13. Is agreement to forgo taking annual leave either with pay for N The law is silent on this matter. Section 6 permits agreements which compensation or otherwise prohibited? would be more favourable to the employee. If an employee perceives that receiving payment in lieu of annual leave is more favourable than Exception: If allowing annual leave to be forgone (for leave or other receiving leave then statute permits it. consideration) would be appropriate to national conditions it may be permitted 14. Are employees who have worked for less than 1 year, but more than Y: S 30(2) As discussed in relation to indicator 2 above the minimum period of the minimum period of service to become eligible for leave, entitled to service is probably 1 year although an entitlement starts after working take a proportionate amount of leave? for 1 month and crystalises as an employee rights after 6 months. Section 30(2) provides (2) ‘If the employer and the employee so agree, the annual leave or either of its parts, may be taken wholly or partly in advance before the employee has acquired entitlement thereto.’ Payment whilst on annual leave 15. Is the employee to be provided with his or her usual remuneration Y: s 31 Yes, and for those whose wage varies the employer must pay during the period of annual leave? ‘remuneration at least equal to the employee's average remuneration

for the 12 months preceding the commencement of the leave’. Exception: If an employee engages in paid work during his or her annual leave C 52 permits deductions from the annual leave payment in respect of the days worked to be made. C 132 also permits rules to be made to control this situation. 16. Does the remuneration while on annual leave require the employee to ?: s 31 Partial payment of remuneration in kind is permitted in Vanuatu’s law, be paid the cash equivalent of any remuneration in kind? but it is not expressly stated that remuneration whilst on annual leave should include the cash equivalent of any payment in kind.

Section 31 provides that remuneration whilst on leave ‘need not include any bonuses, overtime pay, expatriation allowances or reimbursement of expenses.’ 17. Is payment of remuneration to be made in advance of leave unless N The law is silent on this matter. there is a specific agreement otherwise? 18. If the employee is paid on a piece work basis does the law require Y: s 31 The payment shall be equal to the average remuneration over 12

224 average earnings to be calculated in a manner that will nullify, as far as months, or higher. possible, fluctuations in earnings? Unused leave on termination of employment 19. Are employees who have completed the minimum period of service Y: s 32 If the employee terminates the employment relationship he or she must for entitlement to leave but who are terminated before taking leave have worked from 6 months in order to be entitled to a payment for entitled to have unused leave paid out on termination? unused annual leave. If an employer terminates the employment relationship then unused annual leave is payable after the employee Comment: C 52 & 101provide that unused annual leave is to be paid out has worked for more than 1 month. only if the employee is not terminated because of his or her misconduct

MATERNITY PROTECTION (FULL TIME EMPLOYEES)

Summary

There are six areas that law reformers should consider regulating in respect of maternity protection: application (or who the law covers); duration of leave; cash benefits; employment protection and non-discrimination; health protection; and other related leave. There are some significant gaps between some of the indicators and Vanuatu’s Employment Act. These raise important policy questions relating to social security. Changes could have quite broad impacts so it is important to consider the broader implications of any changes, and not just consider “increasing compliance” with indicators.

Application

The maternity protection provisions in the Employment Act apply to all female workers, and conform to this indicator.

Duration of leave

The provisions of the Employment Act largely conform to the indicators relating to duration of leave. There outstanding issue is that there is no statutorily mandated extension of maternity leave in the event of multiple births.

 Consideration could be given to including a provision allowing for a longer period of maternity leave in the event of multiple births. (See indicator 7.)

Cash benefits

The Employment Act conforms to the indicators in respect of restriction on eligibility for cash benefits and the amount of the cash payment. The Employment Act also probably

225

conforms in respect of paying benefits over an extended benefit if the estimated date of confinement is incorrect. It does conform to the indicators in respect of who should pay the maternity benefit.

 Consideration could be given to establishing a compulsory social insurance scheme for the payment of maternity benefits rather than having the employer directly pay maternity benefits and/or reducing the amount of the maternity benefits as appropriate for the country’s economy. (See indicator 10.)

 Consideration could be given to clarifying section 36(2) to make it express that if leave taken prior to giving birth exceeds 6 weeks due to an error in estimating the day of birth then maternity benefits are paid for this additional period. (See indicator 11.)

Employment protection and non-discrimination

The Employment Act only complies with half of the indicators in this area. In particular employers can currently discriminate by testing then refusing to hire pregnant women, or by terminating a pregnant woman’s employment at any time before she goes on maternity leave.

Consideration could be given to the following:

 Prohibiting employers from requiring job applicants to provide a pregnancy test or certificate of such a test. (See indicator 12.)

 Prohibiting an employer from giving notice of dismissal to a woman while she is pregnant, for any reason other than serious misconduct. (See indicator 14.)

226

Health protection

The Employment Act contains few provisions in this area, although it does conform to the indicators in respect of nursing breaks for breastfeeding. Consideration could be given to the following:

 Including a provision requiring the employer to provide hygienic facilities for nursing at or near the place of work. (See indicator 19.)

 Including a provision prohibiting pregnant or breastfeeding employees from being required to perform work that has significant risk for the health of the mother or her child. (See indicator 20.)

 Including a provision prohibiting pregnant or breastfeeding employees from being required to perform night work if the employee presents a medical certificate stating that night work is incompatible with pregnancy or breastfeeding. (See indicator 21.)

 Including a provision requiring the employer to provide alternative work (which may include: elimination of risk; adaptation of conditions of work; transfer to another post, without loss of pay; or paid leave) if the employee’s usual job presents a significant risk for the health of the mother or her child. (See indicator 22.)

 In the event that a provision is added which prohibits requiring women to perform work that has significant risk for the health of the mother or her child, consideration could be given to including a provision guaranteeing the right of the employee to return to the same, or an equivalent, job once the risk for the health of the mother or her child has passed. (See indicator 23.)

 Including a provision stating that the employee has the right to leave her workplace, after notifying her employer, in order to undergo medical examinations related to her pregnancy. (See indicator 24.)

227

Other related leave

The Employment Act does not contain any provisions in respect of other related leave. Consideration could be given to the following:

 Making maternity leave be available for adoptive mothers. (See indicator 25.)

 Including a provision allowing the father to take leave equal to the unexpired portion of post-birth maternity leave in the event of the death of the mother. (See indicator 26.)

 Including a provision allowing the father to take leave equal to the unexpired portion of post-birth maternity leave in the event of sickness or hospitalisation of the mother following birth which prevents her from being able to care for the child. (See indicator 27.)

228

Assessment of current law All references are to the Employment Act [Cap 160] unless otherwise stated Indicator Conforms Comment/detail of any differences between law and indicator (Y/N/?) (including where the law exceeds and where the law provides less than the indicator) Application 1. Are all employed women provided with maternity protection? Y The law contains no restrictions on eligibility for maternity leave. All employees, including casual workers, are entitled to Exception: Law may exclude limited categories when application to them would maternity leave payments. raise special problems of a substantial nature.

Comment: C 3 only applies to women in industrial and commercial undertakings, except those businesses where only family members are employed. C 103 applies to women in industrial, non industrial & agricultural undertakings. C 103 allows businesses where only family members are employed to be exempted. It also allows various other categories of workers to be exempted. 229 Duration of leave

2. Is at least 12 weeks of paid maternity leave provided? Y: s 36(1) Twelve weeks are provided.

Comment: C 183 requires a minimum of 14 weeks paid maternity leave . R 191 recommends a minimum of 18 weeks. 3. Are employees required to take maternity leave for a period of 6 weeks after Y: s 36(1) Employees are prohibited from working for 6 weeks following giving birth? birth.

Exception: The requirement of a compulsory period of post-birth leave can be altered if agreed at national level by a tripartite forum. 4. Does the employee have the right to take 6 weeks leave prior to the estimated Y: s 36(1) An employee is entitled to take 6 week’s leave before birth, date of birth, on presentation of a medical certificate that estimates the date of and are only permitted to continue working in this period if she birth? has a medical certificate certifying that she is fit to work.

Comment: C 103 provides that legislation can allow the non-compulsory portion of leave to be taken either before or after, or partially before and partially after, giving birth. C 183 does not specify when the non-compulsory period of leave is to be taken, although R 191 indicates that the employee should be free to choose when this is taken. 5. Can the prenatal portion of maternity leave be extended by any difference Y: s 36(1) The wording of s 36(1) allows the woman to take leave upon between the estimated and actual date of childbirth without a reduction in the production ‘of a medical certificate stating that her

length of compulsory postnatal leave? confinement is likely to take place within 6 weeks…’ The wording does not expressly limit the prenatal portion of leave to 6 weeks, so it can be extended. The 6 weeks post-birth leave is compulsory and is not affected by the amount of leave taken prior to birth. Compliance with indicator 5 is a matter of statutory interpretation rather than express statutory provision, however. 6. If the employee has a medically certified illness that necessitates more leave, Y: s 37 A further 3 weeks leave is provided. There is no requirement to either while pregnant or after birth, do laws provide for a period of additional pay a maternity benefit during this period. leave?

Comment: Law may specify a maximum duration for the period of additional leave and may also specify other rules as to its nature. 7. Does the law provide for an extension of maternity leave in the event of N The law is silent on this matter. multiple births?

230 Cash benefits 8. Are any conditions for eligibility for cash benefits able to be satisfied by a large Y There are no restrictions on eligibility for cash payments. majority of employees? 9. Are cash benefits whilst on maternity leave at least 66% of the employee’s prior Y: s 36(2) The cash benefit is 66% of prior earnings. earnings?

Exception: C 183 provides that if a country’s economy and social security system are insufficiently developed cash benefits may be equal to social security benefits payable in the case of sickness or temporary disability. The guiding principle for the level of cash benefit is that it should be sufficient for the healthy maintenance of both mother and child.

Comment: R 191 recommends the cash benefit be 100% of prior earnings, where practicable. 10. Are cash benefits provided either out of public funds or a compulsory social N Whilst s 36(2) does not expressly state that the employer shall insurance scheme? pay the cash benefit the law is interpreted as requiring the employer to directly pay the benefit. Exception: C 183 allows an exception if direct payment was part of national law or practice prior to a State adopting C 183 or if, after adopting C 183, there is express tripartite agreement at national level.

Comments: C 103 expressly prohibits direct payment of cash benefits by the individual employer.

R 191 provides that any contribution to social insurance should be made paid both in respect of male and female employees. 11. If leave is extended due to a difference between the estimated and actual date Y: s 36(1) The wording of s 36(1) allows the woman to take leave upon of birth are benefits paid during this extended period? & (2) production ‘of a medical certificate stating that her confinement is likely to take place within 6 weeks…’ The wording does not expressly limit the prenatal portion of leave to 6 weeks, so it can be extended. Section 36(2) requires the cash benefit to be paid during absences pursuant to s 36(1). Employment protection and non-discrimination 12. Are employers prohibited from requiring a woman to provide a pregnancy test N The law is silent on this matter. or certificate of such a test when applying for a job?

231 Exception: If laws prohibit particular types of work for pregnant women or if there nature of the work presents a significant risk to the health of the woman or child a test can be required. 13. Is the employer prohibited from giving notice of dismissal to an employee Y: s 37 There is a blanket prohibition on giving notice for any reason while she is on maternity leave? to a woman who is absent on maternity leave or for an additional 3 weeks if medically required. Exception: It is possible for the employer to terminate an employee on grounds unrelated to the pregnancy or the birth of the child or nursing. The burden of proving the dismissal is unrelated to the pregnancy or the birth of the child or nursing rests on the employer. 14. Is the employer prohibited from giving notice of dismissal to while she is N The restriction on giving notice of dismissal only applies to pregnant? women who are absent on maternity leave. It is possible to terminate a contract for an indefinite term by notice (s 49) at Exception: It is possible for the employer to terminate an employee on grounds any time, so a woman’s contract could be terminated by giving unrelated to the pregnancy or the birth of the child or nursing. The burden of notice prior to maternity leave commencing, with that notice proving the dismissal is unrelated to the pregnancy or the birth of the child or expiring during the period of maternity leave. nursing rests on the employer. 15. Is the employee guaranteed the right to return either to the same position or an Y: s 36(4) The law provides that the woman must either return to the equivalent position on the same pay at the end of her maternity leave? same or equivalent position or a higher position.

Health protection 16. Is the employee permitted to take breaks of half an hour twice a day in order to Y: s 36(3) The employee is given 1 hour twice a day until the child breastfeed? reaches 24 months. Although women who breastfeed past 2 years get no breaks a two year period of paid breastfeeding Comment: Later Conventions and Recommendations do not specify the amount of aligns with World Health Organisation guidelines which time to be given for nursing breaks, but do provide that nursing breaks shall be recommend breastfeeding for 2 years or beyond provided. Law can require that a medical certificate be produced before nursing (http://www.who.int/topics/breastfeeding/en/). breaks are granted. 17. Are nursing breaks to be counted as working hours and paid accordingly? Y: s 36(3) Section 36(3) provides that ‘all such interruptions of work [due to breastfeeding] shall be counted as working hours and shall be remunerated accordingly.’ 18. Is it possible, if the employer agrees, for the employee to combine nursing Y: s 36(3) Whilst section 36(3) does not explicitly recognise such an breaks to allow for the reduction of hours of work at the beginning or end of the arrangement there is nothing in the law preventing parties from day? agreeing to such an arrangement.

232 19. Is the employer required to provide hygienic facilities for nursing at or near the N The law is silent on this matter. place of work?

Exception: There may be exceptions if it would not be practicable to provide such facilities. 20. Are pregnant or breastfeeding employees prohibited from being required to N The law is silent on this matter. perform work that has significant risk for the health of the mother or her child? 21. Are pregnant or breastfeeding employees prohibited from being required to N The law is silent on this matter. perform night work if a medical certificate stating that night work is incompatible with pregnancy or breastfeeding is presented? 22. In the event that the employee’s usual job presents a significant risk for the N The law is silent on this matter. health of the mother or her child are employers required to provide an alternative in the form of elimination of risk, adaptation of conditions of work, transfer to another post without loss of pay, or paid leave when other alternatives are not possible? 23. Are employees guaranteed the right to return to the same, or an equivalent, job N The law is silent on this matter. once the risk for the health of the mother or her child has passed? 24. Does the employee have the right to leave her workplace, after notifying her N The law is silent on this matter. employer, in order to undergo medical examinations related to her pregnancy?

Other related leave 25. Are adoptive mothers able to access maternity leave? N The law is silent on this matter. 26. In the event of the death of the mother is the father entitled to take leave equal N The law is silent on this matter. to the unexpired portion of post-birth maternity leave? 27. In the event of sickness or hospitalisation of the mother following birth which N The law is silent on this matter. prevents her from being able to care for the child is the father entitled to take leave equal to the unexpired portion of post-birth maternity leave?

233

TERMINATION OF EMPLOYMENT

Summary

There are seven areas that law reformers should consider regulating in respect of termination of employment: application (or who the law covers); justification for termination; procedure for termination; procedure of appeal; period of notice; severance allowance and other income protection; and termination because of redundancy (economic, technological, structural or similar reasons).

The indicators in this section are controversial (see chapter six), and propose an approach of termination of employment only for cause (or if there is a reason related to the employee’s performance or changing employment needs of the business). Vanuatu’s Employment Act currently allows for termination of employment by giving notice without cause. As such it does not conform to the broad approach to termination of employment set up by the indicators. Before considering specific issues for consideration, a review by policy makers as to whether the indicators are appropriate for Vanuatu is particularly relevant in respect of this part of the framework. The following preliminary question should therefore be addressed:

 Should Vanuatu move from a legislative regime that allows termination of employment by giving notice without cause to a regime of only permitting termination for cause?

Application

It is difficult to assess Vanuatu’s Employment Act against the indicators in this area as the indicators assume that the laws protect employees from termination without cause.

234

 If the intention is to change Vanuatu’s termination of employment regime to one of termination for cause only, consideration could be given to ensuring that all employees are protected by the laws relating to termination. (See indicator 1.)

 Whether or not Vanuatu’s termination of employment regime changes, as discussed in the section below on severance allowance and other income protection, consideration could be given to expanding the eligibility criteria for payment of severance allowance in the event of termination by the employer. (See indicator 1.)

 Whether or not Vanuatu’s termination of employment regime changes, consideration could be given to requiring the employer to state the probation period before employment commences. (See indicator 2.)

 If the intention is to change Vanuatu’s termination of employment regime to one of termination for cause only, consideration could be given to including safeguards in the law to ensure that employers cannot use fixed term contracts to avoid laws relating to termination for cause only. (See indicator 4.)

Justification for termination

The Employment Act [allows for termination of employment by notice for no reason. This is a considerable departure from the approach reflected in the indicators, which only allow for termination of employment if there is a valid reason.

 Consideration could be given to replacing section 49 with a provision or provisions that only allow for termination of employment contracts if there is cause, or a reason relating to the employee’s performance or changing operational needs of the business. (See indicator 5.)

 If section 49 is replaced with a provision or provisions only allowing for termination for cause consideration could be given to including a provision which states that the following are not valid grounds for termination:

235

 Union membership or participation in union activities outside working hours or, with the consent of the employer, within working hours;

 seeking office as, or acting or having acted in the capacity of, a workers' representative;

 the filing of a complaint or the participation in proceedings against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;

 race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;

 absence from work during maternity leave;

 temporary absence from work due to illness or injury that is medically certified in accordance with the law;

 age, subject to laws regarding retirement; and

 absence due to compulsory military service or other civic obligations. (See indicator 6.)

Procedure for termination

The Employment Act does provide procedures for terminating employment contracts in the event of serious misconduct. These procedures do not, however, conform closely to the indicators in this area. It can be observed that the most fundamental departure from these indicators, as discussed above, is that employees can be terminated by notice without any justification. Whether or not Vanuatu chooses to move to a regime of termination for cause only, the procedure for termination in the event of serious misconduct can be brought into closer conformity with the indicators.

Consideration could be given to the following:

236

 Giving employees the right to be assisted by another person when defending themselves against allegations of misconduct. (See indicator 8.)

 Requiring employers to put warnings in writing, provide instructions on how to improve at the time of giving the warning and allow a reasonable time for improvement before making a decision to terminate employment when one instance of poor conduct is not sufficient to warrant termination for serious misconduct but repeated instances would amount to serious misconduct. (See indicator 9.)

 Requiring the employer to put its decision to terminate into writing. (See indicator 11.)

 Requiring the employer to provide a written statement of reasons for termination if requested to do so by the employee. (See indicator 12.)

 Requiring the employer to provide a written evaluation of an employee’s conduct and performance if requested to do so by the employee. (See indicator 14.)

Procedure for appeal

The Employment Act does not contain any provisions in respect of appeal. Employees can, however, request a labour officer to conduct reconciliation pursuant to the Trade Dispute Act [Cap 162] or can appeal the employer’s decision to the courts. These appeal processes largely comply with the indicators, although there is no provision for shifting the usual burden of proof that exists in civil cases from the employee to the employer.

 Consideration could be given to requiring the employer to prove that a valid reason for termination exists in the event that an employer’s decision to terminate is challenged via voluntary reconciliation or in court. (See indicator 16.)

237

Period of notice

The Employment Act conforms to the indicators in this area, with notice periods being tied to wage periods and length of employment. Employees are also allowed to take reasonable time off work during the notice period to seek a new job.

Severance allowance and other income protection

The Employment Act contains provisions in respect of severance allowance. It does not, however, comply with any of the indicators in this area.

There are three issues in respect of eligibility for severance allowance. First, employees must work for 4 or more days per week in order to be eligible for severance allowance. This means regular part time employees are excluded from severance payments. Second, employees whose employment is terminated by their employer must work for more than 1 year in order to be eligible for severance allowance, again excluding some employees from severance allowance. Third, employees who choose to resign and have worked for more than 6 years are eligible for severance allowance. The indicator only relates to paying severance allowance if the employee is terminated at the initiative of the employer, so the current law exceeds the requirements of this indicator.

There is also no State support for employees who have to retrain or resettle due to being made redundant.

Consideration could be given to the following:

 Expanding eligibility for severance allowance to part time employees. (See indicator 21.)

 Expanding eligibility for severance allowance in this situation to employees who have worked less than a full year. (See indicator 21.)

238

 Removing the employee’s entitlement to severance allowance in the even that he or she resigns. (See indicator 21.)

 Developing social security frameworks so that the State:

 provides income protection to employees who are made redundant during any course of training or retraining. (See indicator 22.)

 reimburses the costs of training or retraining for any employee that is made redundant. (See indicator 23.)

 partially reimbursed for the costs of relocation if an employee that is made redundant and has to change residence in order to take up a new job.(See indicator 24.)

Termination because of redundancy (economic, technological, structural or similar reasons)

The Employment Act is largely silent in respect of rules relating to termination because of redundancy. It only requires that the Commissioner of Labour be given at least 30 days’ notice if 10 or more employees are terminated from the same establishment.

Consideration could be given to the following:

 Requiring the employer to provide information about the reasons for and likely impacts of redundancies to worker’s representatives and to consult with workers’ representatives about possible measures to mitigate the adverse effects of any major changes that are likely to lead to redundancies at the time that such changes are first contemplated. (See indicator 25.)

 Requiring employers to establish criteria for determining who will be made redundant that take into account both the interests of the employer and employees. (See indicator 28.)

239

 Requiring an employer that rehires employees for a specified period of time following termination due to redundancy to give preference to terminated employees over other applicants with comparable qualifications. (See indicator 29.)

240

Assessment of current law All references are to the Employment Act [Cap 160] unless otherwise stated Indicator Conforms? Comment/detail of any differences between law and indicator (including where the Y/N/? law exceeds and where the law provides less than the indicator) Application 1. Are all employees protected by the laws regulating termination of ? This indicator assumes that there are laws regulating the termination of employment? employment which protect employees from termination without cause. Vanuatu’s law relating to termination does, however, allow for termination Exception: Employees that are on fixed term or fixed task contracts, without cause so measuring the extent of compliance of Vanuatu’s law to this serving probation periods or engaged on a causal basis can be indicator is difficult. excluded. Other categories of employees can be excluded if ‘special problems of a substantial nature arise’ due to the employment If one considers the laws regulating termination to apply only to the act of context. termination all employees are covered (with causal employees effectively being on daily fixed term contracts).  Section 48, relating to termination of fixed term contracts applies to all

241 such contracts, whether they are written or oral or full time or part time.  Section 49, relating to termination of contracts for an unspecified period of time applies to all such contracts, whether they are written or oral or full time or part time.  Section 50 relates to summary dismissal for serious misconduct and applies to all employees.  Section 53 relates to the employee leaving employment due to a serious breach of the contract by the employer (constructive dismissal). This applies to all employees, whether full or part time, on fixed term or open-ended contracts.

If one considers the laws regulating termination to apply not only to the act of termination but payments on termination then not all employees are covered. In particular severance payments on termination only apply to employees to be in continuous employment. Continuous employment is defined in s 54(2)(a) as working for 4 or more days per week for 1 year so regular part time employees are excluded from this aspect of protection.

Employees who are serving probation periods are excluded from requirements relating to provision of notice, but this is in accordance with stated exceptions to the indicator.

2. If the law permits probation periods, are probation periods required N: s 14(1) Whilst all contracts for an unspecified time have a statutorily implied 15 day to be stated in advance of employment commencing? probation period, this period can be increased up to 6 months, and there is no express provision that the length of the probation period be stated before employment commences. 3. If the law permits probation periods, are probation limited to a Y:S 14(1) The probation period is limited to 6 months. reasonable duration? 4. If employees on fixed term or fixed task contracts are excluded N The law is silent on this matter. As there are no limits on the reasons that can be from protections are there safeguards to ensure that fixed term used to terminate people on contracts for an unspecified time by giving notice contracts are not used to avoid statutory protections? employees engaged under fixed term contracts are not in a worse position than those engaged under contracts for an unspecified time. Comment: Safeguards may include: (a) limiting recourse to contracts for a specified period of time to cases in which, owing either to the nature of the work to be effected or to the circumstances under which it is to be effected or to the interests of the worker, the employment relationship

242 cannot be of indeterminate duration; (b) deeming contracts for a specified period of time (except for those mentioned in (a)) to be contracts of employment of indeterminate duration; (c) deeming contracts for a specified period of time (except for those mentioned in (a)), when renewed on one or more occasions, to be contracts of employment of indeterminate duration. Justification for termination 5. Can the employee only be terminated for a valid reason associated N: s 49 Under s 49 contracts for an unspecified time can be terminated by notice by with the employee’s capacity or conduct or the operational needs of either the employer or employee at any time. No reason need be stated for the employer? giving notice.

Under s 48 fixed term contracts expire on the last day of the period stated in the contract and no reason need be given for non-renewal. However, employees on fixed term contracts can be excluded from protections in respect of termination (see indicator 1, above) s 48 does not contravene this indicator 6. Are the following expressly stated not to constitute valid grounds N (a), (b) and (c) are expressly stated in s 50(2) to not constitute misconduct for for termination? the purposes of summary dismissal due to serious misconduct. i. Union membership or participation in union activities outside working hours or, with the consent of the employer, within However, because it is possible to terminate employment of contracts for an

working hours; unspecified time without giving reasons by giving notice (section 49) it is j. seeking office as, or acting or having acted in the capacity of, a possible to terminate an employee’s contract for most of the reasons given. workers' representative; k. the filing of a complaint or the participation in proceedings against The one exception is (e). Section 37 prohibits termination of the employee an employer involving alleged violation of laws or regulations or whilst she is absent on maternity leave. recourse to competent administrative authorities; l. race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; m. absence from work during maternity leave; n. temporary absence from work due to illness or injury that is medically certified in accordance with the law; o. age, subject to laws regarding retirement; and p. absence due to compulsory military service or other civic obligations. Procedure for termination

243 7. Is the employer prohibited from terminating an employee for ?: s 50(4) Whilst an employer that is terminating an employee in the ground of serious reasons related to the employee’s conduct or performance before misconduct must provide an employee an opportunity to answer before deciding he/she is provided an opportunity to defend him- or herself against whether or not to terminate, employers can choose to circumvent the procedure the allegations made? for employees who are on contracts for an indefinite term by giving notice. No reason must be given when terminating by notice and employees have no Exception: This obligation can be waived if the employer cannot recourse other than to complain about the correct length of notice being given. reasonably be expected to provide this opportunity. 8. Does the employee have the right to be assisted by another person N The law is silent on this matter. when defending him- or herself against allegations of misconduct or unsatisfactory performance? 9. If the employee’s conduct is such that it would only justify N S 50(3) requires that the employer only terminate employment if no other option termination if repeated on one or more occasions, is the employer is reasonably available. This implies that warnings must be given before required to give the employee: termination if a single instance of misconduct is not, in itself, sufficient to be serious misconduct. However, the law is silent on the need to give warnings in d. a written warning; and writing. e. appropriate instructions; and f. a reasonable period of time for improvement

before terminating the employee for further repeated misconduct? 10. If the employer does not act within a reasonable time after it has Y: s 50(5) Section 50(5) states ‘an employer shall be deemed to have waived his right to knowledge of the misconduct is the employer deemed to have waived dismiss and employee for serious misconduct if such action has not been taken

its right to terminate? within a reasonable time after he has become aware of the misconduct.’ 11. Is the employer required to notify the employee is writing of its N The law is silent on this matter. decision to terminate? 12. Is the employee entitled to receive, on request, a written N The law is silent on this matter. statement from the employer stating reasons for termination? 13. Is the employee entitled to receive, on request, a certificate from Y: s 52(1) Employees are entitled to receive a certificate of employment with content that the employer stating the dates of commencing and finishing conforms exactly to that provided in the indicator. employment and the type of work done? 14. Is the employee entitled to receive, on request, a written N The law is silent on this matter. evaluation from the employer of his or her conduct and performance? Procedure of appeal 15. Does the law allow an employee that thinks he or she has been Y: Art The Supreme Court has unlimited jurisdiction to hear all civil matters. The dismissed without justification the right to appeal his or her 49(1) Magistrates Court has jurisdiction in matters involving claims of up to 1,000,000 termination to an impartial body? Constitution; vatu. Magistrate’s

244 Exception: The right to appeal may be waived if it is not exercised Court (Civil within a reasonable time. Jurisdiction)

Act [Cap 130]. 16. Does the burden of proving that a valid reason for termination N The law is silent on this matter. If the matter is taken to court the burden of existed fall on the employer? proof is therefore the usual civil burden of proof, which falls on the plaintiff (employee). 17. Does the law provide for recourse to a procedure of Y: S 3 Labour officers can conduct a voluntary reconciliation. If resolution is agreed reconciliation, either before or during appeal proceedings? Trade this can be recorded in a binding memorandum. Disputes Act [Cap 162] 18. Does the appeal body have the power to order reinstatement, Y: Art Article 49(1) of the Constitution provides that ‘(1) The Supreme Court has compensation or other relief as appropriate to the situation? 49(1) unlimited jurisdiction to hear and determine any civil or criminal proceedings, Constitution; and such other jurisdiction and powers as may be conferred on it by the Magistrate’s Constitution or by law.’ This unfetter jurisdiction include the power to make Court (Civil orders for specific performance (reinstatement) damages (compensation) or Jurisdiction) other relief. The Magistrate’s Court has jurisdiction in civil cases up to Act [Cap 1,000,000 vatu. 130].

Period of notice 19. Is the employee whose employment is to be terminated entitled to Y: s 49 For employees who have been employed for less than 3 years, notice is tied to a reasonable period of notice? the wage period. For employees who have worked for more than 3 years at least 3 months’ notice is required. Exception: Notice does not have to be provided if the employee is guilty of serious misconduct. In accordance with the exception, employees who are guilty of serious misconduct can be summarily dismissed (s 50(1)). 20. Is the employee permitted to take a reasonable amount of time off Y: s 51 Section 51allows the employee to take a reasonable period of time of work at time convenient to both parties without loss of pay during the without loss of pay in order to seek other work. notice period in order to seek other employment? Severance allowance and other income protection 21. Is an employee who is terminated at the initiative of the employer N: Part 11 Employees who retire over the age of 55, or cease work due to permanent entitled to: incapacity are also entitled to withdraw funds which have been deposited in their d. severance allowance or other separation benefits, which are based name in the Vanuatu National Provident Fund (VNPF) (VNPF Act [Cap 189]

245 in part on the length of service and the level of wages and are paid Part 8). All employees who earn more than 3000 vatu in a month should be for directly by the employer or from a fund constituted by getting contributions to the VNPF made through the course of their employment, employers’ contributions; or so there should be universal cover in respect of social security payments due to e. social security benefits, such as unemployment, old age or old age or (permanent) invalidity. Employees are not, however, entitled to invalidity benefits; or withdraw funds from VNPF in the event of unemployment. f. a combination of severance allowance and social security benefits. The Employment Act provides for a severance allowance of one month’s salary Comment: If an employee has been terminated because of serious per year worked to be paid for directly by the employer. Employees who are misconduct he or she may become ineligible for income protection. only eligible for severance allowance if they have worked for 4 or more days per week for more than a year and are terminated by the employer for any reason other than serious misconduct, or they are over the age of 55 and retire.

One possible issue of nonconformity is that employees must have worked for 4 or more days per week so regular part time employees are excluded from this aspect of protection, however they may be considered to be equivalent to casual workers, and therefore fall under the general exception provided in indicator 1.

Another possible issue is that employees who work for less than 1 year are not entitled to any severance allowance.

It can be noted that, if the employee resigns, then he or she is eligible for

severance allowance if he or she been in continuous employment for 6 years. This exceeds the indicator, which only envisages the payment of severance allowance in the event that the employee is terminated by the employer.

22. If the employee has been terminated due to redundancy is income N The law is silent on this matter. protection provided during any course of training or retraining? 23. If the employee has been terminated due to redundancy is partial N The law is silent on this matter. or full reimbursement for costs of any course of training or retraining provided? 24. If the employee has been terminated due to redundancy is partial N The law is silent on this matter. or full reimbursement for costs associated with changing residence in order to take up a new job? Termination because of redundancy (economic, technological, structural or similar reasons) 25. If an employer is considering termination(s) due to redundancy is N The law is silent the matters in this indicator.

246 it required to:

a. provide workers’ representatives with information on the reasons for considering terminations, the number and categories of employees likely to be affected and the period of which terminations are intended to be carried out a reasonable time before terminations commence; and b. consult with workers’ representatives on measures to avert or minimise terminations and mitigate the adverse effects of termination on employees a reasonable time before terminations commence?

Exception: If the percentage of employees is below a certain threshold, set in law, then notification is not required.

Comment: Measures which could be considered with a view to averting or minimising terminations include, restriction of hiring, spreading the workforce reduction over a certain period of time to permit natural reduction of the workforce, internal transfers, training and retraining, voluntary early retirement with appropriate income protection, restriction of overtime and reduction of normal hours of

work. Where a temporary reduction of normal hours of work would be likely to avert or minimise terminations of employment due to temporary economic difficulties, consideration should be given to partial compensation for loss of wages for the normal hours not worked. Employers could also assist employees in their job search by providing direct contacts with other employers. 26. If an employer is considering termination(s) due to redundancy is Y: s 67(1) Notification of the Commissioner of Labour is required if more than 10 it required to notify the competent authority as early as possible of employees are being terminated from a single establishment. Whilst the law reasons for considering terminations, the number and categories of does not specify exactly what information must be provided to the employees likely to be affected and the period of which terminations Commissioner of Labour, the Commissioner can ask for further information if are intended to be carried out? he or she requires it.

Exception: If the percentage of employees is below a certain threshold, set in law, then notification is not required. 27. Does the law specify a minimum period of time between Y: s 67(1) The notices period must be at least 30 days.

247 notifying the competent authority of proposed terminations and carrying out the terminations? 28. Does the law require that the employer establishes criteria for N The law is silent on this matter. determining who will be terminated due to redundancy that take into account both the interests of the establishment and the interests of employees in advance of commencing terminations? 29. If the employer rehires employees are employees who have been N The law is silent on this matter. made redundant given priority against employees with comparable qualifications for a specified amount of time following their termination?

CONCLUSION

This chapter has demonstrated the use of the framework by providing a baseline assessment of Vanuatu’s Employment Act [Cap 160] in the four areas of protection of wages, annual leave, maternity protection and termination of employment. This baseline assessment systematically raises issues for further consideration by all stakeholders, in a non-prescriptive manner. This in turn should promote both focused discussions between stakeholders during tripartite labour reform processes and reasoned decision-making.

It must be remembered that a labour market environment that promotes decent working conditions is not only about ensuring that laws conform to external standards. Instead, the social and economic context in which the law operates, and the likely impact of any changes in order to increase conformity to the indicators on employers, employees and the government must be taken into 248 account as part of this reasoned decision-making process. It is these likely

impacts that stakeholders should focus their discussion on.

The analysis in chapter seven can be contrasted with the analysis in chapter three. Chapter three covered similar matter when it considered the extent to which the pre-2008 law conformed to ILO standards and the extent to which the 2008 reform increased conformity to these standards. It is submitted that the application of the framework in chapter seven provides a more “user-friendly” baseline assessment of the Employment Act [Cap 160] and its relationship to ILO standards for stakeholders that have limited technical knowledge or experience.

248

CONCLUSION

This thesis has emerged from my desire to understand why the Vanuatu government developed the Employment (Amendment) Bill 2008, why the Vanuatu Parliament passed the Employment (Amendment) Act 2008 and to identify a strategy to avoid such potentially disruptive employment law reforms in the future.

The first part of the thesis established that the 2008 reform was motivated by a desire to improve working conditions for employees, thereby ensuring that they had conditions of decent work. However the likely consequences of the 2008 reform were not thought through by Parliament. Instead a combination of ideology, a weak political system and challenges with interpreting how to use international labour standards to develop domestic laws that promote decent working conditions meant that reforms which on the surface appeared to be beneficial for employees, were accepted as being “good” without any attempt to probe deeper.

249 As discussed in chapter one, the socio-political context in which Vanuatu’s

legislative process operates creates a number of barriers to a reasoned law-making process and the operation of Parliament as a check on government Bills. This context includes: political party support that is driven by personal ties rather than support for policies; coalition governments made up of a large number of parties, which in turn leads to unstable government and diverts the attention of parliamentarians to internal political maneuvering; and limited technical capacity of or technical support for members of Parliament. There is also no expectation that Bills will be made available to the public for debate before entering Parliament and the parliamentary committee system is not used to further reasoned discussion and consultation.

Chapter one also discussed the particular labour market policy challenges that Vanuatu faces, including: a rapidly growing population which is leading to increasing unemployment as the private sector is not expanding rapidly enough to create enough jobs for the young people entering the labour force; economic and social policies that have different, and somewhat antagonistic, ideological foundations; and lack of clarity about what, specifically, decent work actually entails.

249

The challenges make is difficult for policy makers, who not only have to identify strategies for dealing with problems, but also have to align their strategies with antagonistic economic and social policies.

Chapter two demonstrated the costs of the 2008 reform and used the 2008 reform to provide a case study of law-making in Vanuatu. In this instance the law was introduced to Parliament without prior public notification, input or debate. There was no publically available policy document which provided an analysis of the likely impact of the Bill. The Bill was passed over the course of less than two hours of debate over the course of two days, with debate being limited to the Committee of the whole House of Parliament. It was not referred to a smaller parliamentary committee for deeper analysis or discussion of its implications. Debate within the Committee of the whole House of Parliament was superficial. Whilst costs to employers were quantifiable and the impact of these on employment should have been anticipated it does not appear that these matters were considered in advance of introducing the Bill. As such, the contemporary history provided in chapter two

250 provided an illustration of the practical operation of socio-political context of law

making, described in chapter one.

Weaknesses in the law-making process do not, however, automatically render a law “bad”. Nor does the fact that the 2008 reform would have increased costs for employers make it “bad”. In the the absence of any government policy papers explaining or justifying the 2008 reform, chapter three analysed the 2008 reform in respect of whether it would help to achieve stated government policy. This analysis concluded that the 2008 reform did not clearly help to achieve government policy. It also demonstrates the challenges of defining decent work by using international labour standards, in the absence of ratification - arising in part because there are competing standards and some standards are imprecise. A further challenge is that adherence to international labour standards may not be entirely appropriate in the context of small island developing nations. The policy challenges associated with attempting to balance decent work with private sector led development are also illustrated.

250

Chapter four explored the ideological drivers of the 2008 reform in more detail. It argues that the historical experience of the employment relationship as a site of exploitation of the indigenous population by foreign interests feeds into a broader post-colonial dynamic in which foreign influence, as signified by concepts such as “private sector led development” tends to be viewed with suspicion as being anti- kastom and/or anti-sovereignty. The ideological milieu in which decent work is situated aligns with kastom-based resistance to capitalist development. This alignment internalises the positioning of decent work, despite the concept being a largely external creation, with decent work becoming a signifier for protecting local interests at the expense of foreigners, rather than balancing interests to develop a labour market in which employment growth, under good working conditions, continues for all employees.

The second part of the thesis considered the question of how potentially disruptive reforms like the 2008 reform could be avoided in the future. As discussed in chapter five, part of the answer to this involves an appropriate consultative process. As the

251 scope of the thesis was defined to consider issues of substantive content, process

issues were not considered, and instead a tool that would feed into a consultative process was developed. Chapter five also reviews existing literature on indicators for decent work, much of which has been conducted under the auspices of the International Labour Organisation’s Monitoring and assessing progress on decent work (MAP) project. This review found that there was a major gap in respect of legal indicators that go further than measuring ratification of Conventions or describing what the content of laws in particular areas are. The existing literature did not clearly identify clear standards, or indicators, against which domestic law can be measured.

The tool proposed in chapter five and expanded in chapter six is a framework that provides non-prescriptive indicators of the extent to which the content of either current or proposed laws regulating the private individual employment relationship respect the principle of decent work. Its use was demonstrated in chapter seven through a hypothetical application of the framework to Vanuatu’s current employment regulatory regime. Application of the non-prescriptive framework builds a solid knowledge base by providing both information on the content of international standards related to decent work, and comprehensive baseline

251

information on how well either current laws or proposed reforms meet the aim of ensuring that employment conditions meet the indicators associated with decent work.

The proposed framework is not the only thing that is required in order to develop good employment law reforms. However it does provide a structured approach for identifying key law reform questions. Once these questions are identified then context specific consequences of possible reforms, in terms of social, economic and other policy objectives, can be addressed through dialogue that formulates context specific reforms. The desired balance between competing policy objectives will also need to be arrived at through dialogue. This dialogue process may be one of contestation rather than consensus, but, assuming all social partners are appropriately involved, it will allow for systematic and reasoned decision making. Crucially the framework facilitates the provision of appropriate information to all partners involved in the dialogue, meaning that discussion can proceed on an informed basis. As the first half of the thesis established, informed discussion was one of the things

252 that were lacking in respect of the 2008 reform.

The framework is not yet “finished”. “Finishing” it is not simply a matter of expanding the scope of the framework to cover other areas. Its unfinished nature also relates to the fact that the framework is still, currently, somewhat theoretical as it has not been field-tested in any systematic way. The fact that a number of Pacific countries are engaging in employment law reform as part of the decent work country programmes does, however, provide an opportunity for field testing to occur. Further, the framework as presented in this thesis is necessarily fairly academic and detailed. A more streamlined version (which has the more detailed academic version accessible for those who are interested in its foundations) is likely to be more user- friendly for non-academic audiences to use. This is something that may emerge from field-testing. Another future direction for this framework is its possible articulation with global work on measuring decent work. The funding for the International Labour Organisation’s Monitoring and assessing progress on decent work (MAP)

252

project came to an end in 2013.1 As discussed in chapter five, the decent work indicators created through the MAP do not create domestic legal indicators beyond whether conventions have been ratified. A gap in relation to specific legal indicators for decent work which goes beyond whether conventions have been ratified remains, and this is where the framework has real potential for development.

A further potential avenue for extension of the proposed framework arises from chapter seven. In that chapter the analysis is presented neutrally, and there was no attempt to analyse the Employment Act [Cap 160] either from an employer or employee perspective. It should be acknowledged that the proposed framework itself is “worker-centric”, in that the indicators of decent work are about maintaining or improving conditions for employees. I am an employer representative on the Vanuatu Tripartite Labour Advisory Council. If I “wear that hat” it is apparent that another layer of analysis by employer representatives would be beneficial. The proposed framework, and the information it contains, makes it fairly easy to do this. Both employers and employees representatives could add further columns of

253 comment discussing the extent to which they agreed with indicators or the content of

proposed reforms. This in turn would add depth to tripartite discussions on costs associated with potential reform options.

The “unfinished” nature of the proposed framework certainly is not an indication of its limited potential application. Instead, I believe, it is an indication of its future potential to be practically used to help other countries, both within and outside of the Pacific region, to develop context-appropriate laws which ensure that employees are provided with conditions that respect the principle of decent work.

1 International Labour Organisation, ‘About us: Monitoring and assessing progress on decent work’ (Undated) http://www.ilo.org/integration/themes/mdw/map/about/lang--en/index.htm (accessed 26 June 2015). 253

BIBLIOGRAPHY

Note: All references follow the Journal of South Pacific Law style guide with one variation: authors have been listed by surname first. This has been done in order to make alphabetical listing clearer. Where there are multiple sources by the same author material has been ordered by date, with the newest publications earliest.

The bibliography only contains material directly cited in the text or notes.

PRIMARY LEGAL SOURCES

Acts, Bills and subsidiary legislation.

Abolition of Forced Labour Convention (Ratification) Act 2006 (Vanuatu). Civil Procedure Rules 2002 (Vanuatu). Companies Act [Cap 191] (Vanuatu). 254 Constitution of the Republic of Vanuatu.

Discrimination (Employment and Occupation) Convention (Ratification) Act 2005 (Vanuatu). Employment (Amendment) Act 2008 (Vanuatu). Employment (Amendment) Act 2009 (Vanuatu). Employment Act [Cap 160] (Vanuatu). Employment Act [Cap 373] (Papua New Guinea). Employment Ordinance [Cap 30] (Kiribati). Employment Ordinance [Cap 84] (Tuvalu). Employment Ordinance [Cap 92] (Fiji). Employment Relations Bill 2006 (Tonga). Employment Relations Bill 2006 (Vanuatu). Employment Relations Bill June 2012 (Vanuatu). Employment Relations Promulgation 2007 (Fiji). Equal Remuneration Convention (Ratification) Act 2005 (Vanuatu). Forced Labour Convention (Ratification) Act 2006 (Vanuatu). Foreign Investment Promotion Act [Cap 248] (Vanuatu).

254

Freedom of Association and Protection of the Right to Organise Convention (Ratification) Act 2006 (Vanuatu). Government Act [Cap 144] (Vanuatu). Health and Safety at Work Act [Cap 195] (Vanuatu). Holidays Sick Leave and Passage Rules 1982 (Solomon Islands). Joint Regulation to Control Employment 1969 (New Hebrides). Labor (Minimum Conditions) Inquiry Act 1983 (Marshall Islands). Labour (Work Permits) Act [Cap 187] (Vanuatu). Labour Act [Cap 73] (Solomon Islands). Labour and Employment Act 1972 (Samoa). Legal Practitioners Act [Cap 119] (Vanuatu). Magistrates Court (Civil Jurisdiction) Act [Cap 130] (Vanuatu). Manpower and Employment Survey Act [Cap 75] (Vanuatu). Minimum Wage and Minimum Wages Board Act [Cap 182] (Vanuatu). Minimum Wages Order 1995 (Vanuatu). Minimum Wages Order 2005 (Vanuatu).

255 Minimum Wages Order 2008 (Vanuatu).

Minimum Wages Order 2012 (Vanuatu). Order in Council Providing for the Exercise of His Majesty’s Jurisdiction within the New Hebrides in accordance with the Convention of October 20 1906, as amended by Notes of August 29 1907 1907 (UK). Ordinance of Labourers 1349 (UK). Pacific Islanders Protection Act 1872 (UK). Pacific Islanders Protection Act 1875 (UK). Representation of the People Act [Cap 146] (Vanuatu). Representation of the People Parliamentary Constituencies and Seats Order 2002 (Vanuatu). Right to Organise and Collective Bargaining Convention (Ratification) Act 2006 (Vanuatu). Seafarers' Identity Documents (Revised) Convention (Ratification) Act 2005 (Vanuatu). Trade Disputes Act [Cap 162] (Vanuatu). Trade Unions Act [Cap 161] (Vanuatu). Unfair Dismissal Act 1982 (Solomon Islands).

255

Vanuatu National Provident Fund Act [Cap 189] (Vanuatu). Vanuatu National Provident Fund Amendment Act 2003 (Vanuatu). Western Pacific Order in Council 1877 (UK). Workmen’s Compensation Act [Cap 202] (Vanuatu). Worst Forms of Child Labour Convention (Ratification) Act 2006 (Vanuatu).

Cases

Attorney General v ANZ Bank (Vanuatu) Ltd [2011] VUSC 333 http://www.paclii.org.vu. Banque Indosuez Vanuatu Ltd v Ferrieux [1990] VUCA 3 http://www.paclii.org.vu. Benard v Republic of Vanuatu [2012] VUCA 4 http://www.paclii.org.vu. Daniel v Nguyen Huu Hong [2004] VUSC 40 http://www.paclii.org.vu. De Gaillande v ANZ Bank (Vanuatu) Ltd [2008] VUSC 63 http://www.paclii.org.vu. Fijian Teachers Association v President of the Republic of Fiji Islands [2008] FJHC 59 http://www.paclii.org.vu.

256 Hack v Fordham [2009] VUCA 6 http://www.paclii.org.vu.

In re the Constitution, Timakata v Attorney-General [1992] VUSC 9 http://www.paclii.org.vu. In re the President's Referral, President of the Republic of Vanuatu v Attorney- General [1998] VUSC 18 http://www.paclii.org.vu. In re the President's Referral, President of the Republic of Vanuatu v Speaker of Parliament [2000] VUSC 43 http://www.paclii.org.vu. Kelep v Sound Centre [2008] VUSC 13 http://www.paclii.org.vu. Lo v Sagan [2003] VUCA 16 http://www.paclii.org.vu. Malere and Others v Vanuatu Broadcasting and Television Corporation [2009] VUSC 164 http://www.paclii.org.vu. Mann v Air Vanuatu Ltd [2010] VUSC 168 http://www.paclii.org.vu. Molloy v Air Vanuatu (Operations) Ltd [2004] VUSC 52 http://www.paclii.org.vu. Mouton v Selb Pacific Ltd (Judgment #3) [1998] VUCA 8 http://www.paclii.org.vu. President v Speaker [2009] VUSC 35 http://www.paclii.org.vu. Printing and Numerical Registering Co v Sampson (1875) LR 19 Eq 462. Public Prosecutor v Lowen [2003] VUSC 31 http://www.paclii.org.vu. Public Service Commission v Manuake [2003] VUCA 21 http://www.paclii.org.vu.

256

Samson v Tailleur [1988] VUMC 2 http://www.paclii.org.vu. Vernon v Bethwell (1762) 28 ER 838. Virelala v Ombudsman [1997] VUSC 35 http://www.paclii.org.vu. Wells v Newfoundland [1999] 3 SCR 199. Wilco Hardware Holdings Ltd v Attorney General [2013] VUCA 12 http://www.paclii.org. William v Shefa Provincial Council [2003] VUSC 9 http://www.paclii.org.vu.

International Conventions, Declarations Recommendations and Treaties

Abolition of Forced Labour Convention 1957 (Convention 105) (Entered into force 17 January 1959). Convention between Britain and France respecting abrogation of the Declaration of the 19th June 1847, relative to the Islands to the leeward of Tahiti, and for the protection of Life and Property in the New Hebrides 1887 (Signed November 16 1887).

257 Convention between Great Britain and France respecting the New Hebrides 1906

(Entered into force 2 November 1907). Convention on the Elimination of Discrimination Against Women 1979 (Entered into force 3 September 1981). Convention on the Rights of the Child 1989 (Entered into force 2 September 1990). Convention on the Rights of Persons with Disabilities 2006 (Entered into force 3 May 2008). Declaration between Britain and France of the establishment of a Joint Naval Commission January 1888. Declaration on the Granting of Independence to Colonial Countries and Peoples (UNGA Res 1514(XV) (14 December 1960)). Discrimination (Employment and Occupation) Convention 1958 (Convention 111) (Entered into force 15 June 1960). Equal Remuneration Convention 1951 (Convention 100) (Entered into force 15 June 1960). Forced Labour Convention 1930 (Convention 29) (Entered into force 1 May 1932). Freedom of Association and Protection of the Right to Organise Convention 1948 (Convention 87) (Entered into force 4 July 1950).

257

Holidays with Pay (Agriculture) Convention 1952 (Convention 101) (Entereed into force 24 July 1954). Holidays with Pay (Agriculture) Recommendation 1952 (Recommendation 93). Holidays with Pay Convention 1936 (Convention 52) (Entered into force 22 September 1939). Holidays with Pay Convention (Revised) 1970 (Convention 132) (Entered into force 30 June 1973). Holidays with Pay Recommendation 1936 (Recommendation 47). Holidays with Pay Recommendation 1970 (Recommendation 98). Hours of Work (Industry) Convention 1919 (Convention 1) (Entered into force 13 June 1921). ILO Declaration on Fundamental Principles and Rights at Work 1998. ILO Revised Annex to the Declaration on Fundamental Principles and Rights at Work 1998 2010. International Convention on the Elimination of All Forms of Racial Discrimination 1965 (Entered into force 4 January 1969).

258 International Convention on Civil and Political Rights 1966 (Entered into force 23

March 1976). International Covenant on Economic Social and Cultural Rights 1966 (Entered into force 3 January 1976). International Convention on the Rights of Migrant Workers and their Families 1990 (Entered into force 1 July 2003). Maternity Protection Convention 1919 (Convention 3) (Entered into force 13 June 1921). Maternity Protection Convention (Revised) 1952 (Convention 103) (Entered into force 7 September 1955). Maternity Protection Convention 2000 (Convention 183) (Entered into force 7 February 2002). Maternity Protection Recommendation 2000 (Recommendation 191). Millennium Development Declaration (UNGA Res 55(2) (18 September 2000)). Minimum Age (Industry) Convention 1919 (Convention 5) (Entered into force 13 June 1921). Night Work of Young Persons (Industry) Convention 1919 (Convention 6) (Entered into force 13 June 1921).

258

Night Work (Women) Convention 1919 (Convention 4) (Entered into force 13 June 1921). Part Time Work Convention 1994 (Convention 175) (Entered into force 28 February 1998). Protection of Wages Convention 1949 (Convention 95) (Entered into force 24 September 1952). Protection of Wages Recommendation 1949 (Recommendation 85). Right to Organise and Collective Bargaining Convention 1949 (Convention 98) (Entered into force 18 July 1951). Seafarers’ Identity Documents Convention (Revised) 2003 (Convention 185) (Entered into force 9 February 2005). Social Security (Minimum Standards) Convention 1952 (Convention 102) (Entered into force 27 April 1955). Termination of Employment Convention 1982 (Convention 158) (Entered into force 23 November 1985). Termination of Employment Recommendation 1963 (Recommendation 119).

259 Termination of Employment Recommendation 1982 (Recommendation 166).

Treaty of Versailles 1919. Universal Declaration of Human Rights 1948 (UNGA Res 217A(III) (10 December 1948)). Worst Forms of Child Labour Convention 1999 (Convention 182) (Entered into force 19 November 2000).

OTHER SOURCES

Written sources

‘2012 Election Worst in History: Politicians’ Vanuatu Daily Post Online 12 November 2012 http://www.dailypost.vu/content/2012-election-worst- historypoliticians (Accessed 1 December 2012). A Ni-Vanuatu employee, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5.

259

A Trade Union Member, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6. Abu Sharkh , Miriam, ‘Taking Labour Laws to the Domestic Dentist; Measuring countries’ compliance with international labour non-discrimination standards’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 185. Addison, John T and W Stanley Siebert, The market for labor: an analytical treatment’ (1979). ‘AFP overstepped the mark with Finance Centre raids, says Vanuatu Finance Minister’ Radio New Zealand International 19 May 2008 http://www.rnzi.com/pages/news.php/news.php?op=read&id=39844 (Accessed 20 January 2011). Ala, Cynthia and Philip Arubilake, ‘Chapter 1: Domestic Economy’ in Simeon Athy & Ferdinand van der Walle (eds), 20 Years of Central Banking in Vanuatu (2000). Aleck, Jonathan, ‘Beyond Recognition: Contemporary jurisprudence in the Pacific

260 Islands and the common law tradition’ (1997) 7 Queensland University Law

Journal 137. Anderson, Gordon, Bernard Banks, John Hughes, Kenneth Johnston, Michael Leggat and Paul Roth, Butterworths Employment Law Guide (4th ed, 1994). Anker, Richard and Pascal Annycke, ‘Reporting Regularly on Decent Work in the World: Options for the ILO’ (Working Paper No. 94, Policy Integration Department, International Labour Office, January 2010). Anker, Richard, Igor Chernyshev, Philippe Egger, Farhad Mehran and Joseph Ritter, ‘Measuring decent Work with Statistical Indicators’ (2003) 142(2) International Labour Review 147. Anker, Richard, Igor Chernyshev, Philippe Egger, Farhad Mehran and Joseph Ritter, ‘Measuring Decent Work with Statistical Indicators’ (Working Paper No. 2, Policy Integration Department, International Labour Office, October 2002). Anon, ‘Introduction’ (2003) 142(2) International Labour Review 109. Anon, ‘Globalisation and its critics: A survey of globalisation’ The Economist (2001) 360(8241) Lift-out section. Arnold, Luke, Labour and the World Trade Organization: Towards a Reconstruction of the Linkage Discourse’ (2005) 10(1) Deakin Law Review 83.

260

Asian Development Bank, Vanuatu Economic Report 2009: Accelerating reform, executive summary (2009). Asian Development Bank, ‘Summary Statement of Strategy’ (2004) http://www.adb.org/Documents/CSPs/VAN/2004/appendixes.pdf (Accessed 10 March 2010). Asian Development Bank, ‘Priorities of the People: Hardship in Vanuatu’ (2003) http://www.adb.org/Documents/Reports/Priorities_Poor/VAN/van0100.asp (Accessed 25 September 2009). Asian Development Bank, Pursuing Economic Reform in the Pacific (1999). Asian Development Bank, Improving Growth Prospects in the Pacific (1998) 90. Asian Development Bank, Vanuatu Economic Performance, Policy and Reform Issues (1997). Arnold, Luke, Labour and the World Trade Organization: Towards a Reconstruction of the Linkage Discourse’ (2005) 10(1) Deakin Law Review 83. Aruhuri, John, Email from John Aruhuri, General Manager of the Vanuatu Chamber of Commerce and Industry to Chamber of Commerce members, 19 January 2009.

261 Aruhuri, John, Email from John Aruhuri, General Manager of the Vanuatu Chamber

of Commerce and Industry to technical committee and Chamber of Commerce Board members, 12 Jan 2009. Aruhuri, John, Email from John Aruhuri, General Manager of the Vanuatu Chamber of Commerce and Industry to Chamber of Commerce members, 6 January 2009. Aruhuri, John, Circular from John Aruhuri, General Manager of the Vanuatu Chamber of Commerce and Industry to all Chamber of Commerce Members, 12 December 2008. AusAID, Pacific 2020: Challenges and Opportunities for Growth (2006). ‘Australia defends its seasonal worker scheme’ Radio Australia 14 July 2010 http://www.radioaustralia.net.au/pacbeat/stories/201007/s2953691.htm (Accessed 20 January 2011). Australian Department of Foreign Affairs and Trade, ‘Vanuatu Country Brief’ http://www.dfat.gov.au/geo/vanuatu/vanuatu_brief.html (Accessed 10 January 2011). Australian Labor’s International Projects Unit and the Pacific Institute of Public Policy, Political Parties and Groupings of Vanuatu (2008).

261

Baccaro, Lucio and Valentina Mele, ‘Pathology of Path Dependency? The ILO and the Challenge of New Governance’ (2012) 65(2) International Labour Review 195. Basefsky, Stuart and Sean Sweeney, ‘Employment Relations in SMEs: The United States’ (Undated, Cornell School of Industrial and Labor Relations) http://www.ilr.cornell.edu/international/news/upload/BERLIN%20SME%20repo rt.pdf (Accessed 18 November 2010).) Bedford, Richard, New Hebridean Mobility: A study of circular migration (1973). Bennett, Judith M and C Warren Hollister, Medieval Europe, A Short History (10th ed, 2006). Bescond, David, Anne Châtaignier and Farhad Mehran, ‘Seven Indicators to Measure Decent Work: An international comparison’ (2003) 142(2) International Labour Review 179. Binihi, Ricky, ‘Crowby will listen to employers, workers’ Vanuatu Daily Post (Port Vila, Vanuatu) December 19 2008, 2. Blackett, Adelle, ‘Situated Reflections on International Labour Law, Capabilities and

262 Decent Work: The Case of Centre Maraicher Eugene Guinois’ (2007) Revue

quebecoise de droit international (Hors-serie) 223. Blay, Sam, Ryszard Piotrowicz and B Martin Tsamenyi, Public International Law: An Australian Perspective (1997). Block, Richard N, ‘Indicators of Labour Standards: An Overview and Comparison’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 27. Böhning, WR, ‘Towards an Index of Core Rights Gaps’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 211. Bonnet, Florence, José B Figueiredo and Guy Standing, ‘A Family of Decent Work Indicators’ (2003) 142(2) International Labour Review 213. Bordo, Michael D, ‘An Historical Perspective on the Crisis of 2007 – 2008’ (National Bureau of Economic Research Working Paper 14569, November 2008). Bowman, Chakriya, Amanda Ellis, Jozefina Cutura, Clare Manuel, Women in Vanuatu: analyzing challenges to economic participation (2009).

262

Jeffrey Branch, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 1 December 2008, 5. Budd, John W, ‘Fairness at Work, and maybe Efficiency but not Voice: An Evaluation of the Arthur’s Commission Report’ (2007 – 2008) 29 Comparative Labour Law and Policy Journal 477. Burrows, JF, JN Finn and Stephen Todd, Cheshire Fifoot & Furmston’s Law of Contract (7th New Zealand ed, 1988). Business Observer, ‘Letter to the editor’ Vanuatu Independent 21 December 2008, 14. Carcasses, Hon. Moana Kalosil (MP), ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 24 January 2009, 5. Carman, Dave, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 9 December 2008, 5. Carman, Dave, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 5. Cawsey, Katherine Sterling Kerr, Making of a Rebel : Captain Donald McLeod of

263 the New Hebrides (1998).

Central Intelligence Agency, ‘The World Factbook’ (2012) https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html (Accessed 14 May 2012). Centre for Democratic Institutions, ‘Vanuatu’ (last updated 23 October 2012) http://www.cdi.anu.edu.au/.VAN_.htm (Accessed 8 December 2012). ‘Chamber of Commerce calls urgent meeting of all business houses’ Vanuatu Daily Post (Port Vila, Vanuatu) 24 November 2008, 5. Clarke, Elaine, ‘Medieval Labor Law and English Local Courts’ (1983) 27(4) The American Journal of Legal History 330. Colander, David, Ric Holt and Barkley Rosse, ‘The Changing Face of Mainstream Economics’ (Discussion Paper 03-27, Middlebury College Economics Discussion Paper Series, 2003). Collins, Hugh, ‘Theories of Rights as Justifications for Labour Law’ in Guy Davidov and Brian Langille (eds) The Idea of Labour Law (2012) 137. Connell, John and John Lea, Urbanisation in the Island Pacific (2002). Cooney, Campbell, ‘Vanuatu opposition boycotts own no-confidence vote’ Radio Australia 7 December 2012

263

http://www.radioaustralia.net.au/international/2012-12-07/vanuatu-opposition- boycotts-own-noconfidence-vote/1057638 (Accessed 8 December 2012). ‘Costs of Doing Business in the Pacific’ (Session 1 paper, Forum Economic Ministers Meeting, Funafuti Tuvalu, 8 — 9 June 2005). Cowen, David, Alexander Wolfson & Jian Ming Ni, International Monetary Fund Vanuatu Country Report (2002). Cox, Marcus, Hannington Alatoa, Linda Kenni, Anna Naupa, Gregory Rawlings, Nikunj Soni, Charles Vatu, George Sokomanu and Vincent Bulekone ‘The Unfinished State Drivers of Change in Vanuatu (2007) 15 www.ausaid.gov.au/Publications/Documents/vanuatu_change.pdf (Accessed 14 May 2012). Creighton, Breen and Andrew Stewart, Labour Law: An introduction (4th ed, 2005). Cross, David, Letter from David Cross to Vanuatu Chamber of Commerce and Industry, 8 December 2008. ‘Crowby to meet private sector over amendment’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 1.

264 Crumb, Graham, ‘Just Desserts- Reprise’ (30 November 2008)

http://scriptorum.imagicity.com/2008/11/30/just-desserts-reprise/ (Accessed 10 June 2015). Cuyvers, Ludo and Daniel Van Den Bulke, ‘The Quantification of Respect for Selected Core Labour Standards: Towards a Social Development Index?’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 115. Daley, Lara, ‘Hijacking development futures: “Land development” and reform in Vanuatu’ in Tim Anderson and Gary Lee (eds), In Defence of Melanesian Customary Land (2010) 34. Davidov, Guy and Brian Langille, ‘Understanding Labour Law: A Timeless Idea, a Timed-Out Idea, or an Idea Whose Time has Now Come?’ in Guy Davidov and Brian Langille, The Idea of Labour Law (2011) 1. Davies, ACL, Perspectives on Labour Law (2004). Davies, Paul, ‘The Representation of Workers in the United Kingdom from Collective Laissez-Faire to Market Individualism’ (1993- 1994) 15 Comparative Labour Law Journal 167.

264

Davoine, Lucie, Christine Erhel and Mathilde Guergoat-Lariviere, ‘Monitoring quality in work: European Employment Strategy indicators and beyond’ (2008) 147(2-3) International Labour Review163. Deakin, Simon and Frank Wilkinson, ‘Labour law and economic theory: a reappraisal’ in Gerrit De Geest, Jacques Siegers & Roger Van Den Bergh (eds) Law and Economics and the Labour Market (1999) 1. Deakin, Simon and Frank Wilkinson, ‘Minimum Wage Legislation’ in B Boukaert & G De Geest The Encyclopedia of Law and Economics’ (2000) 561. Den Hertog, Johan, ‘General Theories of Regulation’ in B Boukaert & G De Geest The Encyclopedia of Law and Economics’ (2000) 223. Dodd, E Merrick, ‘From Maximum Wages to Minimum Wages: Six centuries of regulation of employment contracts’ (1943) 43 Columbia Law Review 643. Duncan, Greg J, ‘Earnings Functions and Non-Pecuniary Benefits’ (1976) 11(4) Journal of Human Resources 462. Duncan, Ron and Carmen Voight-Graf, ‘Pacific Labour Market Scenarios: Economic crisis, climate change and decent work’ (Background Paper, ILO Decent Work

265 for Sustainable Development in the Pacific Tripartite High Level Meeting, Port

Vila, Vanuatu, 8 – 9 February 2010). Duncan, Ron, Sandy Cuthbertson and Malcolm Bosworth, Pursuing Economic Reform in the Pacific (1999). Dundon, Tony, Irena Grugulis and Adrian Wilkinson, ‘“Looking out of the black- hole” Non-union relations in an SME’ (1999) 21(3) Employee Relations 251. ‘Employment Act may be revisited: Molisa’ Vanuatu Daily Post (Port Vila, Vanuatu) 28 November 2008, 1. Epstein, Richard, ‘In Defense of the Contract at Will’ ((1984) 51 University of Chicago Law Review 947. Etzioni, Amitai, ‘Law in Civil Society, Good Society and the Prescriptive State’ (2000) 75(2) Chicago Kent Law Review 355. European Union, ‘EU Relations with the Pacific Islands – A Strategy for a strengthened partnership’ (2006). Evans, John and Euan Gibb, ‘Moving From Precarious Employment to Decent Work’ (Global Union Research Netweork Disucssion Paper 13, 2009). Expat worried for the future of ni-Vanuatu, ‘Letter to the Editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5.

265

Fairbairn, Te’o IJ, Island Economies (1985). Fenwick, Colin, John Howe, Shelley Marshall & Ingrid Landau, ‘Labour and Labour-Related Laws in Micro and Small Enterprises: Innovative Regulatory Approaches’ (University of Melbourne Legal Studies Research Paper No. 322). Fields, Gary S, ‘Decent work and development policies’ (2003) 142(2) International Labour Review 239. ‘Fiji’s Employment Relations Bill Shelved for 6 Months’ Radio New Zealand International 21 September 2007 http://www.rnzi.com/pages/news.php?op=read&id=35281 (Accessed 15 January 2011). Forsyth, Miranda, A Bird that Flies with Two Wings: The kastom and state justice systems in Vanuatu (2009) http://epress.anu.edu.au/kastom/html/frames.php (Accessed 1 February 2011). Forsyth, Miranda and Anita Jowitt, ‘An Annotated Bibliography of the Literature Concerning Vanuatu’ (2006) http://www.vanuatu.usp.ac.fj/sol_adobe_documents/usp%20only/vanuatu/forsyth

266 .htm (Accessed 20 November 2012).

Galligan, DJ, Law in Modern Society (2007). Garae, Len, ‘40 Politicians Petition Government, Electoral Commission’ Vanuatu Daily Post Online 7 November 2012 http://www.dailypost.vu/content/40- candidates-petition-government-electoral-office (Accessed 1 December 2012). Garae, Len, ‘Pilbeam and Team Set Record Straight’ Vanuatu Daily Post Online 16 November 2010, http://www.dailypost.vu/content/pilbeam-and-team-set-record- straight?page=2 (Accessed 20 January 2011). Garae, Len,‘Employers warned against dismissing their employees’ Vanuatu Daily Post (Port Vila, Vanuatu) 21 January 2009, 2. Garae, Len, ‘Govt will review 2 months severance: Employers told’ Vanuatu Daily Post (Port Vila, Vanuatu) 21 January 2009, 1. Garae, Len,‘Crowby says Employment law to help workers’ Vanuatu Daily Post (Port Vila, Vanuatu) 16 January 2009, 3. Garae, Len, ‘Crowby asks Employers to wait for court ruling’ Vanuatu Daily Post (Port Vila, Vanuatu) 14 January 2009, 2. Garae, Len, ‘Crowby explains why no review of bill’ Vanuatu Daily Post (Port Vila, Vanuatu) 10 January 200, 1.

266

Ghai, Dharam, ‘Decent Work: Universality and Diversity’ in Dharam Ghai (ed), Decent Work: Objectives and Strategies (2006) 1. Ghai, Dharam, ‘Decent work: Concept and indicators’ (2003) 142(2) International Labour Review 113. Government of Vanuatu, ‘Priorities and Action Agenda 2006 – 2011’ (2006). Grassroots and low income earner, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 23 December 2008. Haberkorn, Gerald, Port Vila: transit station or final stop (1989). Hassall, Graham, ‘Pacific Island parliament: developmental aspirations and political realities’ (2012) 27(1) Australasian Parliamentary Review 213. Hassall, Graham, ‘Governance, Legitimacy and the Rule of Law’ in Anita Jowitt and Tess Newton Cain (eds), Passage of Change: Law, Society and Governance in the Pacific (2003) 51. Hatcher, John, ‘England in the Aftermath of the Black Death’ (1994) 144 Past and Present 3. Hati, Vira, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 17

267 December 2008, 5.

Henkin, Louis, ‘The Universal Declaration at 50 and the Challenge of Global Markets’ (1999) 25(1) Brook Journal of International Law 17. Hepple, Bob, ‘Rights at Work’ in Dharam Ghai (ed), Decent Work: Objectives and Strategies (2006) 33. Hepple, Bob, ‘New Approaches to International Labour Regulation’ (1997) 26(4) Industrial Law Journal 353. Hill, Napoleon, ‘Letter to the Editor’ Vanuatu Independent (Port Vila, Vanuatu) 30 November 2008, 11. Hince, Kevin, ‘The Emergence of Trade Unionism in the New Hebrides (Vanuatu)’ (1996) 19 Journal of Pacific Studies 1. Holden, Paul, Malcom Bale, and Sarah Holden, Swimming Against the tide? An assessment of the private sector in the Pacific (2004). Hooper, Antony, ‘Introduction’ in Anthony Hooper (ed), Culture and Sustainable Development in the Pacific (2000), 1. Howard, Michael C, ‘Wage Labour and Unions in Vanuatu’ (1983) 4 USP Sociological Society Newsletter 23.

267

ILOTV, ‘Reforming Labour Law Legislation in Vanuatu’ (8 Dec 2011) http://www.youtube.com/watch?v=zGsAFOWORQE&feature=player_embedded (Accessed 20 May 2012). ‘Induction Program Increases Knowledge of Vanuatu Parliamentarians’ Islands Business, 26 November 2012 http://www.islandsbusiness.com/news/index_dynamic/containerNameToReplace =MiddleMiddle/focusModuleID=130/focusContentID=30553/tableName=media Release/overideSkinName=newsArticle-full.tpl (Accessed 8 December 2012). International Labour Organisation, ‘Memorandum of Technical Comments on the Employment Relations Bill of the Republic of Vanuatu’ (Unpublished, May 2012). International Labour Organisation, ‘Decent Work Country Programme Memorandum of Understanding Vanuatu’ (2014). International Labour Organisation, Decent Work Indicators: Concepts and definitions (2012). International Labour Organisation, Global Employment Trends Report 2012:

268 Preventing a Deeper Jobs Crisis (2012).

International Labour Organisation, Guide for the Formulation of National Employment Policies (2012). International Labour Organisation, ‘Breakthrough in reforming labour legislation in Vanuatu’ (2011) http://www.ilo.org/suva/information-resources/public- information/press-releases/WCMS_160856/lang--en/index.htm (Accessed 14 May 2012). International Labour Organisation, ‘Final Report, Tripartite Meeting of Experts to Examine the Termination of Employment Convention, 1982 (No. 158), and the Termination of Employment Recommendation, 1982 (No. 166)’ (Geneva, 18 – 21 April 2011). International Labour Organisation, ‘Tripartite Labour Advisory Council launched in Vanuatu’ (2011) http://www.ilo.org/asia/info/public/pr/WCMS_155453/lang-- en/index.htm (Accessed 14 May 2012). International Labour Organisation, Maternity at Work: A review of national legislation. Findings from the ILO Database of Conditions of Work and Employment Laws (2nd ed, 2010).

268

International Labour Organisation, ‘Report Form for the General Survey Concerning Fundamental Conventions in light of the 2008 ILO Declaration on Social Justice for a Fair Globalization’ (2010) http://www.ilo.org/ilolex/english/reportforms/pdf/19e2011.pdf (Accessed 1 December 2010). International Labour Organisation, ‘Decent Work Country Programme Vanuatu’ (2009). International Labour Organisation, ‘Chairpersons report’ (Tripartite Meeting of Experts on the Measurement of Decent Work Geneva, 8 to 10 September 2008) http://www.ilo.org/integration/resources/mtgdocs/lang--en/docName-- WCMS_099764/index.htm (Accessed 1 December 2010). International Labour Organisation, Decent Work Indicators for Asia and the Pacific: A guidebook for policy-makers and researchers (2008). International Labour Organisation, Social Security for All Men and Women A source book for extending social security coverage in Vanuatu: options and plans (2006).

269 International Labour Organisation, ‘General Survey of the reports concerning the

Protection of Wages Convention (No. 95) and the Protection of Wages Recommendation (No. 85), 1949’ (Report III 1 B, 91st International Labour Conference, Geneva, 2003). International Labour Organisation, ‘Working Party on Policy regarding the revision of standards (Cartier Working Party)’ (June 2002) http://www.ilo.org/wcmsp5/groups/public/---ed_norm/--- normes/documents/genericdocument/wcms_125644.pdf (Accessed 16 September 2012). International Labour Organisation, ‘Maternity Protection at Work’ (Report V(I), 87th International Labour Conference, Geneva, 1999) http://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-v-1.htm (Accessed 10 February 2011). International Labour Office, ‘Report of the Director General to the 87th Session of the International Labour Conference, 1999’ (1999) http://www.ilo.org/public/english/standards/relm/ilc/ilc87/rep-i.htm (Accessed 8 December 2012).

269

International Labour Organisation, ‘ILO Highlights Global Challenge to Trade Unions’ (1997) http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press _releases/lang--en/WCMS_008032/index.htm (Accessed 10 September 2012). International Labour Organisation, ‘Protection Against Unjustified Dismissal’ (Report III (IVB), 82nd International Labour Conference, Geneva, 1995) http://www.ilo.org/public/libdoc/ilo/P/09661/09661%281995-82-4B%29.pdf (Accessed 10 February 2011). International Labour Organisation, ‘Part time work’ (Report V(1), 80th International Labour Conference, Geneva, 1993). International Labour Organisation, ‘Decent Work Agenda’ http://www.ilo.org/global/about-the-ilo/decent-work-agenda/lang--en/index.htm (Undated) (Accessed 10 September 2012). International Labour Organisation, ‘Decent Work Country Programmes: Programmes by Country/Subregion’ (Undated) http://www.ilo.org/public/english/bureau/program/dwcp/countries/index.htm

270 (Accessed 22 September 2012).

International Labour Organisation, ‘Employment promotion: ILO Office for Fiji, Papua New Guinea, Solomon Islands, Kiribati and other South Pacific islands’ (Undated) http://www.oit.org/asia/areas/lang--en/facet--LOC.ASIA-_- ASIA.EMP-_-ORG-_-ASIA----RO-BANGKOK----ILO-SUVA-_- 2629/WCMS_DOC_ASI_ARE_EMP_EN/index.htm (Accessed 18 November 2010). International Labour Organisation, ‘Monitoring and Assessing Progress on Decent Work (MAP)’ (Undated) http://www.ilo.org/integration/themes/mdw/lang-- en/WCMS_123804/index.htm (Undated) (Accessed 1 December 2010). International Labour Organisation, ‘NORMLEX: List of instruments by subject and status’ http://www.ilo.org/dyn/normlex/en/f?p=1000:12030:0::NO (Undated) (Accessed 30 October 2012). International Labour Organisation, ‘Origins and history’ (Undated) http://www.ilo.org/global/about-the-ilo/history/lang--en/index.htm (Undated) (Accessed 28 April 2015).

270

International Trade Union Congress, ‘Programme of the ITUC (Adopted by the Founding Congress of the ITUC Vienna, 1 - 3 November 2006)’ http://www.ituc- csi.org/IMG/pdf/Programme_of_the_ITUC.pdf (Accessed 20 October 2012). Jayaraman, TK, ‘Being least developed’ Fiji Times online 3 February 2009, http://www.fijitimes.com/story.aspx?id=113472 (Accessed 10 January 2011). JKB, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6. Jolly, Margaret, ‘Nationalisms, Feminisms, and Globalization in the Pacific’ (2005) 52(1) Ethnohistory 137. Joshua, Jane, ‘2012 General Elections Worst Ever: Natapei’ Vanuatu Daily Post Online 26 November 2012 http://www.dailypost.vu/content/2012-general- elections-worst-ever-natapei (Accessed 1 December 2012). Joshua, Jane, ‘President refers new employment law for courts opinion’ Vanuatu Daily Post (Port Vila, Vanuatu) 6 January 2009, 3. Joshua, Jane, ‘Crowby is not bowing down’ Vanuatu Daily Post (Port Vila, Vanuatu) 5 December 2008, 1.

271 Joshua, Jane, ‘Investors have up to 3 months: Crowby’ Vanuatu Daily Post (Port

Vila, Vanuatu) 5 December 2008, 2. Jowitt, Anita, ‘The Future of Law in the Pacific’ (2008) 12 (1) Journal of the South Pacific Law 43 http://www.paclii.org/journals/fJSPL/vol12no1/pdf/jowitt.pdf (Accessed 8 September 2009). Jowitt, Anita, ‘Annexure 2: Vanuatu’ in Livingstone Armytage (ed) Searching for Success in Judicial Reforrm: Voices from the Asia Pacific Experience (2008) 317. Jowitt, Anita, ‘Do employers comply with and use employment contract law? A study from Port Vila, Vanuatu’ (Paper presented at Regional Conference on Institutions, Globalisation, and their Impacts on Labour Markets in Pacific Island Countries, 17 – 19 October 2006, University of the South Pacific School of Economics, Suva, Fiji). Jowitt, Anita, ‘The impact of employment contract laws on private sector employers in Port Vila, Vanuatu’ (Paper presented at Thinking and Doing Conference, Boulder Colorado, September 2006). Jowitt, Anita, ‘Vanuatu’ in Transparency International, Global Corruption Report 2005 (2005) 214.

271

Jowitt, Anita, ‘Vanuatu Political Review’ (2005) 17(2) The Contemporary Pacific A Journal of Island Affairs 456. Jowitt, Anita, ‘Vanuatu political review’ (2004) 16(2) The Contemporary Pacific A Journal of Island Affairs 401. Jowitt, Anita, ‘Indigenous land grievances, customary land disputes and restorative justice’ (2004) 8(2) Journal of South Pacific Law http://www.paclii.org/journals/fJSPL/vol08no2/8.shtm (Accesed 10 January 2011). Jowitt, Anita, ‘Review of labour laws in Vanuatu’ (PIAS – DG Employment and Labour Market Studies Papers, 2004) http://www.usp.ac.fj/fileadmin/files/Institutes/piasdg/elms_papers/Jowitt_Vanuat u_IR_legislation.pdf (Accessed 18 November 2010). Jowitt, Anita, ‘Reconceptualising Labour Markets in the South Pacific’ (2002) 6 Journal of South Pacific Law http://www.paclii.org/journals/fJSPL/vol06/4.shtml (Accessed 10 January 2011). Jowitt, Anita, ‘The Notion of Human Rights’ in Anita Jowitt and Tess Newton Cain

272 (eds) Passage of Change: Law, society and governance in the Pacific (2002) 185.

Jowitt, Anita, ‘Unemployment in Vanuatu’ (2001) October Development Bulletin 55. Jowitt, Anita, ‘Economic growth, urban crime and unemployment in developing economies: a case study from Vanuatu’ in MH Sierle and T Birringer, Economics of Transition: Theory, Experiences and EU Enlargement (2001) 157. Jowitt, Anita, ‘Vanuatu political review’ (2000) 12(2) The Contemporary Pacific A Journal of Island Affairs 519. Jowitt, Anita, ‘Island Courts in Vanuatu’ (1999) 3 Journal of South Pacific Law http://www.vanuatu.usp.ac.fj/journal_splaw/Working_Papers/Jowitt1.html (Accessed 18 April 2013). Jowitt, Anita, ‘Free and Fair Elections: Societal Challenges to Vanuatu’s Electoral System’ (1997) 13(2) Kasarinlan 79. Jowitt, Anita and Krista Lee-Jones, Vanuatu Update 2006 (2007). Jowitt, Anita, Yoli Tom’tavala and Joseph Foukona, ‘Customary law and public health’ (Technical paper prepared for Model Public Health Law for the Pacific Islands Project, La Trobe University, 2009). Kalsakau, Ephraim, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 31 January 2009, 5.

272

Kalsakau, Ephraim, Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 17 December 2008, 5. Kalsakau, Ephraim, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 10 December 2008, 5. Kalsakau, Ephraim, ‘Labour and Politics’ in Howard Van Trease (ed), Melanesian Politics: Stael Blong Vanuatu (1995) Melanesian Politics, 407. Kaluat, Lionel, Vanuatu Commissioner for Labour, ‘Powerpoint presentation’ (Powerpoint presented at Tripartite High-Level Meeting: Decent Work for Sustainable Development in the Pacific, Port Vila Vanuatu, 9 Feb 2010). Kaluat, Lionel, Letter from Lionel Kaluat, Commissioner of Labour to Anita Jowitt, 5 April 2006. Kavaliku, Langi, ‘Culture and sustainable development in the Pacific’ in Antony Hooper (ed), Culture and Sustainable Development in the Pacific (2000) 22. Kennedy, Duncan, ‘The Disenchantment of Logically Formal Legal Rationality’ (2004) 55 Hastings Law Journal 1031. Kim, Sung Ho, ‘Max Weber’ in Edward N Zalta (ed),The Stanford Encyclopedia of

273 Philosophy (Fall 2008 Edition)

http://plato.stanford.edu/archives/fall2008/entries/weber (Accessed 10 September 2011). Kokona, Thomson Pakoa Matokai, ‘Letter to the editor’ Vanuatu Daily Post Online 1 December 2010, http://www.dailypost.vu/content/slo-slo-yumi-slo-ko-ko-slo-slo- yumi-stap-spit-ko-ko-naoia-yumi-spit-bitim-mak?page=10 (Accessed 20 January 2011). Kucera, David, ‘Introduction and Overview’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 1. La Canna, Xavier, ‘Federal Police Anger Vanuatu Chiefs’ The Age Online 6 June 2008 http://news.theage.com.au/world/federal-police-anger-vanuatu-chiefs- 20080606-2mmv.html (Accessed 20 January 2011). Lamont, Bob, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5. Langille, Brian, ‘Labour Law’s Back Pages’ in Guy Davidov and Brian Langille (eds) Boundaries and Frontiers of Labour Law (2006) 13.

273

Lee, Sangheon, and Deirdre McCann, ‘New Directions in Labour Regulation Research’ in Sangheon Lee and Deirdre McCann, Regulating for Decent Work (2011) 1. Leung, Valiant, President of the Santo Chinese Association, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 23 December 2008, 6. Ligo, Godwin, ‘3,000 employees call for wage increase’ Vanuatu Daily Post Online 9 July 2012 http://www.dailypost.vu/content/3000-employees-call-wage-increase (Accessed 10 September 2012)). Ligo, Godwin, ‘Australia increases Vanuatu seasonal workers’ Vanuatu Daily Post Online 30 September 2011 http://www.dailypost.vu/content/australia-increases- vanuatu-seasonal-workers (Accessed 10 May 2012). Ligo, Godwin, ‘Crime Rate in Port Vila Triples’ Vanuatu Daily Post Online 24 December 2010 http://www.dailypost.vu/content/crime-rate-port-vila-triples (Accessed 8 December 2012). Lindstrom, Lamont, ‘Vanuatu’ in Ember and Ember (eds) Countries and their Cultures (2001) 2391.

274 Lini, Lora, ‘Shipowners President warns Minister Crowby’ Vanuatu Daily Post (Port

Vila, Vanuatu) 29 December 2008, 3. Lini, Lora, ‘Leadership Crisis?’ Vanuatu Daily Post (Port Vila, Vanuatu) 2 December 2008, 4. Liu, Stephenson, ‘Unemployed, Go Back Home!’ Vanuatu Weekly Hebdomidaire (Port Vila, Vanuatu) 8 July 2000, 1. MacDonald, Barrie, ‘Decolonisation and beyond’ (1986) 21(3) Journal of Pacific History 115. MacNaughton, Gillian and Diane F Frey, ‘Decent Work for All: A Holistic Human Rights Approach’ (2011) 26(2) American University International Law Review 441. Makin, Bob, ‘Businesses terminating employees “Does the Government know what it is doing?”’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008 1. Mandel, Hadas, ‘Winners and Losers: The Consequences of Welfare State Policies for Gender Wage Inequality’ (2010) Advance access DOI:10.1093/esr/jcq061 European Sociological Review 1 http://esr.oxfordjournals.org/content/early/2010/11/19/esr.jcq061.full (Accessed 10February 2011).

274

Mandel, Hadas and Moshe Semyonov, ‘Family Policies, Wage Structures and Gender Gaps: Sources of Earnings Inequality in 20 Countries’ (2005) 70 American Sociological Review 949. Madrawiwi, Joni, ‘Labour Laws of the Republic of Vanuatu, Report for the ILO’ (Unpublished, 2005). Marae, Clarence, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5. Marae, Clarence, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 5. ‘Maternity law worries bosses’ Fiji Times online 5 April 2008 http://www.fijitimes.com/story.aspx?id=85587 (Accessed 15 January 2011). ‘Maternity leave pay change in Vanuatu stirs debate’ Vanuatu Independent (Port Vila, Vanuatu) 7 December 2008, 10. Matua, Makau Wa, ‘The ideology of human rights’ (1996) 36 Virginia Journal of International Law 589. McCracken, Martin and Michael Sanderson, ‘Trade union recruitment: strategic

275 options?’ (2004) 26(3) Employee Relations 274.

McGavin, Paul, Labour resource utilisation in Melanesia (1997). McGregor, Andrew, Mark Sturton and Sitiveni Halapua, Private Sector development: Policies and programs for the Pacific Islands (1992). Miles, William FS, Bridging Mental Boundaries in a Postcolonial Microcosm (1998). Minutes of Joint Employer – Government Consultation Meeting held at Le Meridien Hotel, 9.00am 20th January 2009 (Unpublished, undated). Minutes of the Second Ordinary Session of Parliament 2008, Wednesday 19 November 2008 (Vanuatu). Mitchell, Jean, Young People Speak… A report on the Vanuatu Young People’s Project, Vanuatu Cultural Centre, April 1997-June 1998 (1998). Morgan, Michael G, ‘The Origins and Effects of Party Fragmentation in Vanuatu’ in Roland Rich, Luke Hambly and Michael Morgan (eds) Political Parties in the Pacific (2006) 117. Morgan, Michael G, ‘Political fragmentation and the policy environment in Vanuatu, 1980–2004’ (2004) 19(3) Pacific Economic Bulletin 40.

275

Morgan, Michael G, ‘Integrating Reform: Legislative Needs Assessment, Republic of Vanuatu’ (Technical Report for UNDP, March – April 2001). Mumby, Dennis K, ‘The Political Function of Narrative in Organizations’ (1987) 54 Communication Monographs 112. Munro, Doug, ‘The Labour Trade in Melanesians to Queensland’ (1995) 28(3) Journal of Social History 609. Munro, Doug, ‘The Origin of Labourers in the South Pacific: Commentary and statistics’ in Clive Moore, Jacqueline Leckie and Doug Munro (eds), Labour in the South Pacific (1990) xxxix. Nari, Russell, Comprehensive Reform Programme in the Republic of Vanuatu: A major challenge, through the eyes of a ni-Vanuatu’ (ANU Asia Pacific School of Economics and Government, Update Papers, June 2000). Nari, Russell, ‘Land Tenure and Resource Management: A major challenge in Vanuatu’ (2000) 15(2) Pacific Economic Bulletin 1. Naupa, Anna, ‘Anna Naupa on Vanuatan History’ (2005) http://dl.screenaustralia.gov.au/module/228/ (Accessed 9 April 2010).

276 Neemia, Uentabo, ‘Decolonization and Democracy in the South Pacific’ in Ron

Crocombe, Uentabo Neemia, Asesela Ravuvu and Werner Vom Busch (eds), Culture and Democracy in the South Pacific (1992) 1. Neil-Jones, Marc, ‘Editorial: Rising anger of employers over Crowby stance’ Vanuatu Daily Post (Port Vila, Vanuatu) 10 December 2008, 4. Neil-Jones, Marc, ‘Govt says amendment “rushed”’ Vanuatu Daily Post (Port Vila, Vanuatu) 26 November 2008, 1. Neil-Jones, Marc, ‘Natapei suspends Employment Bill for amendment’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 1. Neil-Jones, Marc, ‘This Bill will cause unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 4. Neil-Jones, Marc, ‘This Bill will cause large scale unemployment if gazetted’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 1. Newton Cain, Tess and Anita Jowitt, Vanuatu National Integrity Systems Country Study (2004). Nicoteau, Jacque, Letter from Jacque Nicoteau, President of the Vanuatu Chamber of Commerce, to the Ministers for Trade, Finance and Internal Affairs, 24 December 2008.

276

Office of the United Nations Commissioner for Human Rights (Undated) http://www2.ohchr.org/english/law/ (Accessed 20 January 2011) . Olson, MD, ‘The Politics and poetics of social transformation in Samoa’ (2000) 45 Journal of Legal Pluralism and Unofficial Law 19. ‘Our London Letter’ Brisbane Courier (Brisbane, Australia) 23 March 1907, 6 http://newspapers.nla.gov.au/ndp/del/article/19481277?searchTerm=deakin+blue +book+new+hebrides+labour (Accessed 10 January 2011). Pacific Institute of Public Policy, ‘Coalition government formed’ (21 November 2012) http://www.pacificpolicy.org/blog/category/vanuatu-election-2012/ (Accessed 25 November 2012). Pacific Institute of Public Policy, ‘The Waiting game’ (15 November 2012) http://www.pacificpolicy.org/blog/category/vanuatu-election-2012/ (Accessed 25 November 2012). Pacific Institute of Public Policy, ‘Election 2012 – Official Results’ (8 November 2012) http://www.pacificpolicy.org/blog/category/vanuatu-election-2012/ (Accessed 25 November 2012).

277 Pacific Network on Globalisation, ‘Making Waves: Opportunities for Reclaiming

Development in the Pacific’ (Report for the Annual Pacific Civil Society Organisation (CSO) Forum, Auckland New Zealand, August 12-14 2008). Parliament of Fiji, ‘Report of the Sector Standing Committee on Social Service the Employment Relations Bill’ (Parliamentary Paper 49 of 2006) http://www.parliament.gov.fj/legislative/bills.aspx?billID=308&viewtype=report s&billnav=bill (Accessed 12 January 2011). Parliament of the Republic of Vanuatu, Ninth Legislature Second Ordinary Session 2008 17 November – 9 December 2008 Summarised Proceedings (undated). Paterson, Don, Anita Jowitt and Yoli Tom’tavala, ‘Legal Traditions and Systems in the Pacific: An overview of challenges and opportunities for legislative reform’ (Paper prepared for the Legislative Reform and the Convention on the Rights of the Child (CRC) in the Pacific: Sub-Regional Meeting, Port Vila Vanuatu, 25–28 August, 2008). Persky, Joseph, ‘Retrospectives: The Ethology of Homo Economicus’ (1995) 9(2) The Journal of Economic Perspectives 221.

277

Pollert, Anna and Paul Smith, ‘The Limits of Individual Employment Rights: The reality of neoliberalism’ in Roger Blanplain (ed), The Modernisation of Labour Law and Industrial Relations in a comparative Perspective (2009)113. Posner, Richard, Economic Analysis of Law (5th ed, 1998). Port Vila citizen, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 5 December 2008, 5. Randall, Shirley (ed), Republic of Vanuatu National Elections 2 May 2002: Report of the Elections Observer Group (2002). Ratuva, Steven, ‘Primordial Politics? Political Parties and Tradition in Melanesia’ in Roland Rich, Luke Hambly and Michael Morgan (eds) Political Parties in the Pacific Islands (2006) 27. Rawls, John, ‘The Idea of Public Reason Revisited’ (1997) 64(3) University of Chicago Law Review 765, Raynauld, Andre and Jean-Pierre Vidal, Labour Standards and International Competitiveness (1998). Regenvanu, Ralph, ‘Issues with Land Reform in Vanuatu’ (2008) 12(1) Journal of

278 South Pacific Law 63.

Regenvanu, Ralph, ‘The Year of the Traditional Economy, What is it all About’ (2007) http://www.vanuatuculture.org/documents/CustomEconomyBlurb.doc (Accessed 10 September 2011). Reserve Bank of Vanuatu, ‘Quarterly Economic Report December 2008’ (2009). Reserve Bank of Vanuatu, Reserve Bank Quarterly Report 1 2011 (2011). Rousseau, Benedicta, ‘“This is a Court of Law, Not a Court of Morality”: Kastom and custom in Vanuatu state courts’ (2008) 12(2) Journal of South Pacific Law 15. S. ‘Letter to the editor’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008, 13. Sahlins, Marshall, ‘Poor Man, Rich Man, Big Man, Chief: Political types in Polynesia and Melanesia’ (1963) 5(3) Comparative Studies in Society and History 285. Salais, Robert, ‘On the correct (and incorrect) us of indicators in public action’ (2005 – 2006) 27 Comparative Labour Law and Policy Journal 237. Salong, John, ‘ A matter of national importance’ Vanuatu Independent (Port Vila, Vanuatu) 23 November 2008, 13.

278

Sari, Dora and David Kucera, ‘Measuring progress towards the application of freedom of association and collective bargaining rights: A tabular presentation of the findings of the ILO supervisory system’ Working Paper No. 99, Policy Integration Department, International Labour Office, January 2011). Scarr, Deryck, Fragments of Empire (1967). Schmidt, Gunther, Jacqueline O’Reilly and Klaus Schomann, ‘Theory and Methodology of Labour Market Policy and Evaluation: An Introduction’ in Gunther Schmid et al (eds), International Handbook of Labour Market Policy and Evaluation (1997) 1. Schnabel, Claus and Joachim Wagner, ‘Determinants of Trade Union Membership in Western Germany: Evidence from Micro Data, 1980-2000’ (IZA Discussion Paper 708, January 2003.) ‘Secretary to Vanuatu Law Commission appointed’ Vanuatu Daily Post Online 5 August 2011 http://www.dailypost.vu/content/secretary-vanuatu-law- commission-appointed (Accessed 11 November 2012). Seidman A and R Seidman, State and Law in the Development Process (1994).

279 Shing, Glenda, ‘Freshwota Independence celebration focuses on combating crime

and violence’ Vanuatu Daily Post Online 27 July 2012 http://www.dailypost.vu/content/freshwota-independence-celebration-focuses- combating-crime-and-violence (Accessed 8 December 2012). Simon, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 22 November 2008, 6. Simon Sez, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6. Skane, BJ, ‘Severance pay test case’ Vanuatu Daily Post Online 5 December 2012 http://www.dailypost.vu/content/severance-pay-%E2%80%98test%E2%80%99- case (Accessed 6 December 2012). Smith, Anthony D, Nationalism: theory ideology, history (2001). Sokomanu, Ati George, ‘Government in Vanuatu: The Place of Culture and Tradition’ in Ron Crocombe et al (eds), Culture and Democracy in the Pacific (1992) 49. Stiglitz, Joseph, Globalization and its Discontents (2002).

279

Summers, Clyde, ‘The Battle in Seattle: Free Trade, Labor Rights and Societal Values’ (2001) 22(1) University of Pennsylvania Journal of International Economic Law 61. Tepahae, Chief Philip, ‘Chiefly power in southern Vanuatu’ (Discussion Paper 9, State, Society and Governance in Melanesia Project, 1997).Teubner, Gunther, ‘Substantive and reflexive elements in modern law’ (1983) 17(2) Law and Society Review 239. Teubner, Gunther, ‘Substantive and reflexive elements in modern law’ (1983) 17(2) Law and Society Review 239. Tevi, Dickinson, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 4 December 2008, 5. The Islander, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 27 November 2008, 5. ‘The Strategy to Recognise and Promote the Traditional Economy as the Basis for Achieving National Self Reliance’ produced from the workshop to recognise and promote the traditional economy as the basis for achieving national self reliance

280 14 – 18 March 2005, Uripiv Island, Vanuatu’(Unpublished).

‘Thursday, January 10, 1907’ The Argus (Melbourne, Australia) 10 January 1907, 4 http://newspapers.nla.gov.au/ndp/del/article/10608697?searchTerm=deakin+blue +book+new+hebrides+labour (Accessed 10 January 2011). Tommy, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 12 December 2008, 5. ‘Trade unions to challenge employment relations bill’ Fiji Times online 13 December 2007 http://www.fijitimes.com/story.aspx?ref=archive&id=76450 (Accessed 15 January 2011). Trade Union Member, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29 November 2008, 6. Turner, Aidan, Just Capital (2001). Ulen, Thomas, ‘Rational Choice Theory in Law and Economics’ in Boudewijn Bouckaert and Gerrit De Geest (eds) Encyclopedia of Law and Economics (2000) 790. UNECOSOC, ‘General Comment No. 18: The Right to Work: Article 6 of the International Convenant on Economic, Social and Cultural Rights’ (UN Doc E/C.12/GC/18 (Feb 6, 2006)).

280

UNELCO, ‘Profile’ (Undated) http://www.unelco.com.vu/en/ (Accessed 10 June 2015). UNICEF, ‘Legislative Reform and the Convention on the Rights of the Child (CRC) in the Pacific: A Sub-Regional Meeting, 25-28 August, 2008, Port Vila, Vanuatu’ (2008) http://www.unicef.org/pacificislands/Final_Report_Pacific_Legislative_Reform_ and_CRC.pdf (Accessed 10 Feburary 2011). United Kingdom, Parliamentary Debates, House of Commons, 12 February 1907. United Nations, ‘Millennium Development Goals’ (Undated) http://www.un.org/millenniumgoals/poverty.shtml (Accessed 10 May 2012). United Nations, ‘Millennium Development Goals: Background’ (Undated) http://www.un.org/millenniumgoals/bkgd.shtml (Accessed 19 October 2012). United Nations, ‘Millennium Development Goals: Beyond 2015’ (Undated) http://www.un.org/millenniumgoals/beyond2015.shtml (Accessed 19 October 2015). United Nations Conference on Trade and Development, The Least Developed

281 Countries Report 2011 (2011).

United Nations Development Programme, ‘Vanuatu HDI values and rank changes in the 2011 Human Development Report’ (2011) http://hdrstats.undp.org/images/explanations/VUT.pdf (Accessed 11 November 2012). United Nations Development Programme, Indigenous Peoples and the Human Rights-Based Approach to Development: Engaging in Dialogue (2007). United Nations Development Programme, Pacific Human Development Report 1999 (1999). United Nations Development Programme Fiji Multi-Country Office, ‘Democratic Governance Projects’ (Last updated 6 December 2012) http://www.undp.org.fj/index.php?option=com_content&task=view&id=124&Ite mid=180 (Accessed 8 December 2012). United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, ‘Criteria for Identification and Graduation of LDCs’(Undated) http://www.unohrlls.org/en/ldc/164/ (Accessed 12 May 2012).

281

United Nations Office of the United Nations High Commissioner for Human Rights, ‘Frequently Asked Questions on Economic, Social and Cultural Rights’ (Factsheet 33) (Undated) http://www.ohchr.org/Documents/Publications/FactSheet33en.pdf (Accessed 3 March 2015). United States Department of State, ‘Vanuatu Country report on human rights practices 1999’ (2000) http://www.state.gov/g/drl/rls/hrrpt/1999/310.htm (Accessed 8 December 2012). Untitled document presented by Acting Director General of Internal Affairs, George Pakoasongi, to employers at meeting regarding the Employment (Amendment) Bill 2008, Chantilly’s Hotel, Port Vila, 4 December 2008 (Unpublished, Undated). Validire, Jean-Louis, ‘The Social Clause: an inconclusive debate’ (2001) 122 Labour Education 51. Valticos, Nicolas, ‘The ILO: A retrospective and future view’ (1996) 135 (3-4) International Labour Review 474.

282 Van Than, Dinh, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 29

January 2009, 5. Van Than, Dinh, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 15 December 2008, 5. Van Trease, Howard, ‘Vanuatu Political Review 2008 – 2009’ (2010) 22(2) The Contemporary Pacific 467. Van Trease, Howard, ‘The Single Non-Transferable Vote System in Vanuatu’ (2005) 43(3) Commonwealth and Comparative Politics 296. Van Trease, Howard, ‘Colonial Origins of Vanuatu Politics’ In Howard Van Trease (ed) Melanesian Politics: Stael Blong Vanuatu (1995) 3. ‘Vanuatu could lose status as least developed country’ Radio Australia 15 April 2009 http://www.radioaustralia.net.au/asiapac/stories/200904/s2543948.htm (Accessed 10 January 2011). Vanuatu Cultural Centre, ‘Traditional Money Banks Project’ (Undated) http://www.vanuatuculture.org/site- bm2/projects/050628_traditionalmoneybankproject.shtml (Accessed 10 February 2011).

282

Vanuatu Electoral Commission, ‘Declaration by Electoral Commission of Candidates Elected’ 10 September 2008. Vanuatu Investment Promotion Authority, ‘Vanuatu Investment Promotion Authority FDI Annual Report 2010’ (2011). Vanuatu Investment Promotion Authority, ‘About Us’ (Undated) http://www.investvanuatu.org/vipa/vipa.html (Accessed 10 March 2010). Vanuatu Ministry of Trade, Commerce, Industry, Tourism, Investment and Business Development, ‘Doing Business Reform Task Force Terms of Reference, 21 August 2008 (Unpublished). Vanuatu National Planning and Statistics Office, Third National Development Plan 1992 – 1996 (1992). Vanuatu National Planning and Statistics Office, Second National Development Plan 1987 – 1991 (1987). Vanuatu National Planning and Statistics Office, Mid-term review of first national development plan (1984). ‘Vanuatu National Self Reliance Strategy 2020’ (Undated)

283 http://www.vanuatuculture.org/documents/Vanuatu%20National%20Self%20Rel

iance%20Strategy%202020.doc (Accessed 10 February 2011). Vanuatu National Statistics Office and UNDP Pacific Centre, Vanuatu Hardship & Poverty Report 2012: Analysis of the 2010 Household Income and Expenditure Survey (2013). Vanuatu National Statistics Office, Vanuatu Household Income and Expenditure Survey 2010 (December 2012)) Vanuatu National Statistics Office, ‘Statistics Release, HIES 2010’ (2012) https://vnso.gov.vu/index.php/component/advlisting/?view=download&fileId=20 08 (Access 14 June 2015). Vanuatu National Statistics Office, ‘Statistics Update: Overseas Trade February 2012 Highlights’(2012) http://www.vnso.gov.vu/images/stories/Releases/Highlights.pdf (Access 14 May 2012). Vanuatu National Statistics Office, 2009 National Population and Housing Census Basic Tables Report, Volume 1 (2011). Vanuatu National Statistics Office, 2009 National Census of Population and Housing Summary Release (2010).

283

Vanuatu National Statistics Office, Vanuatu 2000 Labour Market Survey Report (2000). Vanuatu National Statistics Office, Informal Sector Survey 2000 (2000). Vanuatu National Statistics Office, The 1999 Vanuatu national population and housing census: Main report (2000). Vanuatu National Statistics Office, Vanuatu Analysis of the 2006 Household Income and Expenditure Survey Report on the Estimation of Basic Needs Poverty Lines, and the Incidence and Characteristics of Poverty in Vanuatu (undated). Vanuatu National Statistics Office, Vanuatu Main Report on the Household Income and Expenditure Survey 2006 (undated). Vanuatu Office of the Prime Minister, Comprehensive Reform Programme (1997). Vanuatu Office of the Prime Minister, Millennium Development Goals 2010 Report for Vanuatu (September 2010). Vanuatu Tripartite Labour Advisory Council, ‘Report: Minimum Wage Proposal August 2012’ (Unpublished, 2012). ‘Vanuatu’s Supreme Court begins hearing election petitions’ Radio New Zealand

284 International 4 December 2012

http://www.rnzi.com/pages/news.php?op=read&id=72669 (Accessed 5 December 2012). Vessey, Iris, ‘Cognitive Fit: A theory-based analysis of the graphs versus tables literature’ (1991) 22 Decision Sciences 219. Viederman, Dan and Erin Klett, ‘Country-level Assessments of Labour Conditions in Emerging Markets: An Approach for Institutional Investors’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 57. Watchy Watchy, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 9 December 2008, 5. Wheelwright, Karen, Labour Law (1999). Willie, Royson, ‘Trade unions prefer tripartite solution to Employment Act’ Vanuatu Daily Post (Port Vila, Vanuatu) 31 December 2008, 1. Willie, Royson, ‘Employment Act changes gets opposition support’ Vanuatu Daily Post (Port Vila, Vanuatu) 20 November 2008, 1. Wirrick, Parkinson, ‘Restricting the Freedom of Movement in Vanuatu: Custom in conflict with human rights’ (2008) 12(1) Journal of South Pacific Law 76.

284

World Bank, Doing Business 2012: Doing business in a more transparent world (2012). World Bank, ‘Enterprise Surveys, Vanuatu’ (2009) http://enterprisesurveys.org/Data/ExploreEconomies/2009/vanuatu (Accessed 10 May 2012). World Bank, Doing Business 2010: Reforming through difficult times (2009). World Bank, Doing Business 2009 (2008). World Bank, Enhancing the Role of Government in the Pacific Island Economies (1998). World Bank, ‘Net ODA received (% of GNI)’ (Undated) http://data.worldbank.org/indicator/DT.ODA.ODAT.GN.ZS (Accessed 12 May 2012). Worried employee, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 9 December 2008, 5. ‘Yia Blong Kastom Ekonomi 2007 Aktiviti Metriks’ (Undated) www.vanuatuculture.org/documents/Matrix.pdf (Accessed 10 November 2011).

285 Zarka-Matres, Monique and Monique Guichard-Kelly, ‘Decent Work, Standards and

Indicators’ in David Kucera (ed), Qualitative Indicators of Labour Standards: Comparative methods and applications (2007) 83. Zorba, ‘Letter to the editor’ Vanuatu Daily Post (Port Vila, Vanuatu) 25 November 2008, 5.

Oral communications

Personal communication with Keli Ihrig, Accountant, Pacific Islands Trust Company Ltd (PITCO) (Telephone interview, Port Vila, 7 January 2011). Personal communication with with Ernest Killion, Statistician, Economic Section, Vanuatu National Statistics Office (Port Vila, 2 July 2015). Personal communication with Mr Reynold, Human Resources Manager, Air Vanuatu Ltd (Telephone interview, Port Vila, 19 November 2010). Personal communication with Susanne Vira, Accountant, Vanuatu Abbatoirs Ltd (Telephone interview, Port Vila, 19 November 2010). Personal communication with Evelyn Wokon, Vanuatu Parliament General Secretariat (Port Vila, 22 December 2010).

285