Description
A leave of absence (LOA) is a period of time that one must be away from his/her primary job, while maintaining the status of employee. This contrasts with normal periods away from the workplace, such as vacations, holidays, hiatuses, sabbaticals, and "working from home" programs, in that they are considered exceptional circumstances, rather than benefits.
THE IMPACT OF PROLONGED ABSENCE OF LABOUR LEGISLATION IN PROMOTING DECENT WORK IN TONGA
Dr Fotu K. V. Fisi’iahi
Centre for Work and Labour Market Studies Faculty of Business Auckland University of Technology 42 Wakefield Street Auckland Central New Zealand Tel: +649 921 9999 Ext. 5038 Mobile: 021 0222 5833 Email: [email protected]
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
1
THE IMPACT OF PROLONGED ABSENCE OF LABOUR LEGISLATION IN PROMOTING DECENT WORK IN TONGA
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
2
Abstract
This paper argues that because there has been a lack of any robust labour legislation in Tonga that governs the employment relationship and the level of working conditions and wages, there has been a detrimental impact on socio-economic performance of Tonga. As most businesses in Tonga are labour intensive, this becomes not only problematic but also an important issue. The main focus of the paper, therefore, is to identify the three key forms such implications of the absence of appropriate labour legislations take. First, the absence of appropriate labour legislation contributes to worsening the poverty of low paid workers and vulnerable groups in the labour market, thus affecting their socio-economic wellbeing and livelihood. Second, the impact of the lack of labour legislation on working conditions may discourage employee commitment, especially in those labour intensive industries and in turn may affect productivity and performance. Third, following from point one and two, the absence of labour legislation not only affects decent working conditions for employees and their performance but it may also have a detrimental effect on the socio-economic development of the country.
Introduction A study by Chand (2004) on labour market and industrial relations revealed that Tonga is the only country in the South Pacific region that does not have labour legislation in place for the purpose of governing the interests of various parties in the labour market. This absence of any comprehensive employment legislation largely affected the private sector. The reason being is that until 1986 an establishment code (ESTACODE) defined the terms and conditions of the employment of public servants. The ESTACODE 1986 was repealed in 2002 and replaced with the Public Service Commission Act 2002. By 2006 a new draft employment framework had been proposed but it is yet to be enacted. Although the Trade Union Act Cap 138 of 1964 was enacted way back in 1964, it is yet to be implemented due to the reluctance of the government to draft regulations that would enable the effect of the Act as law, and to legalise the formation of employees’ associations. Despite this deficiency, a number of employees’ associations have been formed and registered under the Incorporate Societies Act. These organisations include the Friendly Islands Teachers’ Association (FITA), Tonga Nurses’ Association (TNA), Tonga Medical Doctors’ Association (TMDA), and recently the Tonga Public Servants’ Association (TPSA). Although they are legally registered, these organisations do not have any mandatory power to engage in compulsory dialogue with employers on behalf of their employees. Any opportunity to have an open dialogue is at the sole consent of the employer, which has continued to remain a problematic process. Hence, the Tongan labour market, particularly in the private sector, is still operating in a precarious environment, an issue of interest, which will be discussed in this paper. Given the prolonged absence of appropriate labour legislation to protect the interests of the employers and employees in the workplaces, it is necessary to explore the reasons why there has been such a protracted delay. The purpose of this paper is to present findings of doctoral study that sheds light on the factors that have hampered the enactment of orthodox labour legislation by successive governments and the detrimental outcomes this has had on the working conditions in Tonga. In addition, the outcome of this discussion may assist policy makers in Tonga in attempting to put in place some sort of legal framework that would provide employers and employees with mandatory obligations in the workplace.
Trade Union Act 1964 – A Hoax
The first industrial relations legislation in Tonga was the Trade Union Act Cap 138 of 1964 which dates back to the construction of the Queen Salote Wharf, the largest international wharf in the Kingdom of Tonga. According to the Tongan Ministry of Works, the construction of the wharf was funded by the British Government, under a British
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
3
Commonwealth Fund, to countries under its protection. One of the conditions of the aid program required that some sort of trade union legislation was put in place to protect workers during the construction. The legislation was drafted and compiled in the United Kingdom, at the time while Tonga was still a protectorate of the British Government and largely adhered to the Laws of the United Kingdom (Prasad and Hince, 2001; MLCI, 2000). It has been argued by the Human Rights and Pro-Democracy movement advocates that the Trade Union Act has never been activated since for reasons that the government had never revealed to the public. The issue was discussed in a television program by Mr Finau Tutone, President of Friendly Islands Teacher’s Association (FITA), MP ‘Akilisi Pohiva, Human Rights and Democracy Movement Advocate and people’s Number One representative to parliament, and the author of this paper. The panel was televised live through the Television Tonga on 14 December, 2000. The main argument proposed by this live televised panel, was that the Trade Union Act was only enacted for the purposes of obtaining the aid and fulfilling the terms and conditions set by the British Government. Other researchers into the Tongan labour market confirmed this argument including Prasad and Hince who quoted:
In the Tongan situation the government passed the legislation through parliament as the quid pro quo for a cash grant from the UK government to enable the construction of the Queen Salote Wharf (Prasad and Hince, 2001:45).
Investigation later revealed that no regulations had ever been put in place to implement the Trade Union Act 1964. Despite the call from various advocates to revive the Trade Union Act of 1964, which is very much needed as industrial disputes and exploitation of labour have become a norm in most workplaces, there has been very little success in these efforts. As a result, the Tongan labour market still remains without a legal framework that will give workers the right to collectively defend their rights and to enforce compulsory consultation and negotiation with employers. For these reasons, it is argued that employees will remain victims of the labour market until the Trade Union Act 1964 is made operative or a new legal employment relations framework is introduced, as has been attempted several times. Multi-Drafts of the Employment Relations Bill – A Controversial Piece of Legislation
First Draft - 1982
The initial draft of labour legislation in Tonga dates back to 1982. The Ministry of Labour, Commerce and Industries was given the mandate of drafting a Terms of Employment Bill as a priority of its key function. A draft of Terms of Employment Bill 1982 was prepared and submitted for the perusal of cabinet members but was never approved for tabling in parliament (MLCI, 1982 & 1983). The reports indicated that further direction from government to redraft the piece of legislation but there was no record of any attempt by government to table the draft in parliament or discuss it.
Second Draft - 1993
The attempt to revive the issue of drafting labour legislation came about in the early half of 1990s under the mandate of a new Minister of Labour. In response to a directive from the government, the Ministry of Labour, Commerce and Industries requested the assistance of the International Labour Organisation (ILO) for a legal framework to be put in place (MLCI, 1993). The ILO provided a consultant under a project known as the Employment Promotions and Labour Administration (EMPLA Project) to conduct the work 1993, and a new Bill called the Terms and Conditions of Employment Bill was put in place for public consultation. This
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
4
Bill was specifically applicable to the private sector, as the Establishment Code (ESTACODE) covered the public service and its employees at the time. After several consultations with the public, and in the private sector, the ILO Consultant and his Tongan counterpart recommended the tabling of the Bill to the legislative assembly during its 1995 session. The terms and conditions of Employment Bill 1995 were submitted to Cabinet and approval for tabling in parliament in its 1995 seating was granted. Preparation for tabling the Bill included bilingual translation as well as the binding, and distribution to Members of Parliament. Despite these efforts, the Minister for Labour, Commerce and Industries withdrew the Bill on the date that was set for deliberation in parliament (MLCI, 1995). The MLCI report does not record any reason for the last minute withdrawal of the Bill. However, as part of my doctoral studies, I investigated the matter further, and found that the reason for the last minute withdrawal of the Bill from parliament was provided by the Tongatapu longest surviving People’s Representative to parliament. He suggested that in informal consultation by Government representatives and some members of the Legislative Assembly before Parliament resumed, concerns were raised relating to the likely impact of the legislation on the economy. As he put it:
The Bill came at the wrong time, as most of the elected members as well as nobles and a number of ministers were engaged in business undertaking. They strongly opposed the Bill during informal discussion in the parliament common room. They were very concerned at the likely impact of the Bill in the economy, in terms of labour instability. Their positions were very weak and were of personal interest. However, the Minister was not strong enough to defend his Bill and as a result he called for the withdrawal of the Bill as soon as the House resumed that morning (MP-Tt01, pers. comm., 2002).
It was revealed that two members of the Tongatapu electorate, two from the Vava’u electorate, one each from the Ha’apai and ‘Eua islands electorates were all business owners. In addition, five of the nobles’ representatives and two government ministers engaged in business partnerships (MLCI, 1993 & 1995). However, whatever the other reasons were for the last minute withdrawal of the Bill by the Minister of Labour, it is argued that the business interests of Members of Parliaments played a large part in the prolonged absence of a labour legislation in the Tongan labour market.
Third Draft - 2002
The Bill was re-drafted after wide-ranging consultation with the private sector and the general public between the years 2000 – 2002, under a new Minister but it has never been tabled for debate in Parliament. The Bill was renamed the Employment Bill 2002 and was rewritten to cover all employees in both public and private sectors. Despite the high government expenditure in public consultations and preparation of the Bill, the process of submitting to parliament stalled the implementation of this piece of legislation. It was further argued by politicians, members of the Friendly Island Teachers’ Association, and interested members of the public that the Bill is unlikely to be enacted in the near future for two reasons. First, the Bill is considered to be the most controversial legal framework ever proposed for Tonga. This was revealed during the private sector and public consultations led by the author. Many employers were reluctant to accept the enactment of the proposed Bill, despite comprehensive assurance that the Bill would offer benefits for both employers and employees. For example, the Bill directed that compulsory employment contracts that would spell out not only responsibilities of employers to employees, but also vice versa.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
5
Secondly, as revealed during consultation with members of Parliament, some members of the legislative assembly are involved in business and therefore have a conflict of interest between their responsibilities to the citizens of Tonga and their business concerns (Chand, 2004). Public and Government consultations on the proposed Employment Bill was conducted by a team from the Ministry of Labour, Commerce and Industries led by the author during 20002002. The results of the various consultations are confirmed by the findings of Chand (2004). In the preparation for the 2005 parliamentary elections, some members of the public called for the elimination of candidates with business interests, as these interests were likely to conflict with their parliamentary roles. Despite these efforts, the Bill is yet to be submitted to Parliament.
Fourth Draft - 2005
In the effort to put labour legislation in place and in quick response by government to the Civil Servants’ Strike of 2005, the Labour Division was directed by the new minister who is also the Prime Minister to revive working on the Employment Relations Bill 2005. In this effort, the Prime Minister, in his capacity as the Minister responsible for Labour, Commerce and Industries, travelled to the Fiji Islands to explore the possibilities of adopting their Employment Legislation to be used in Tonga (MLCI, 2005). In a public statement, the Minister elaborated:
The proposed Bill is important for the future development of the Tongan economy, as it will avoid any further industrial disputes in both public and private sectors. This Bill is aimed at harmonising employment relationships in Tongan workplaces, as it will allow compulsory dialogue of parties to the employment relationship (Sevele, 2005:1).
At the beginning of 2006, it was revealed that the Labour Division of the Ministry of Labour, Commerce and Industries was preparing for further public consultations. However, the recent restructure of the Tongan government, in which government ministries and departments are being streamlined and reduced from thirty two ministries to fourteen, put a hold in the process of public consultations. In a recent public document, the head of the labour division and officer-in-charge of the public consultations process noted that the consultation and implementation processes would resume in the last quarter of 2006. He also noted:
We are expecting to table the Bill into Cabinet by end of September 2006 before submission to parliament for deliberations and approval for enactment. We are hoping to get the Act operative as early as January 2007 if everything goes smoothly and according to our plan of action (GO-01, pers. comm, 2006:1).
However, the evidence provided to date indicates that the difficulties in the process of enacting the labour legislation in the Tongan labour market so far are still largely extant. In addition, the evidence suggested that the four different ministers who were responsible, and who have different views on the nature of the Bill also contributed to the prolonged absence of a legal framework in the labour market. The prolonged process of approving the Employment Bill and Tonga’s failure to warrant its enactment poses a serious threat to the employment relationship in Tonga. Lack of appropriate Labour Legislations: A Barrier to Decent Work? The absence of appropriate labour legislation in the Tongan labour market has had a detrimental effect on the welfare and livelihood of Tongan workers, and the economy as a whole. To support this assertion, the purpose of this section is to investigate how the absence
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
6
of appropriate labour legislation is a barrier to the development of decent work in the Tongan labour market. Given the importance of investigating the factors that may affect decent work in Tonga, this section is divided into two major parts. Part one presents and discusses the precarious status of workers in the labour market by demonstrating real workplace experiences revealed during the fieldwork. Part two will investigate and demonstrate how the absence of appropriate labour legislation is considered a barrier to promoting decent work in Tongan workplaces. It is central to this investigation to establish a link between the labour legislation and decent work, and how these can contribute to the socio-economic wellbeing and livelihood of Tongan workers.
Part 1: Precarious Status of Workers in Tongan Workplaces
There has been sufficient evidence to argue that the forces generated by globalisation are already felt by the working population in the Tongan labour market. This argument stems from a number of material issues that have occurred in the Tongan labour market. Firstly, employees are subject to structural unemployment; secondly, many employees are underemployed; thirdly, many workers in the Tongan labour market are ‘wage takers’- they are not involved in deciding their wage levels and do not represent themselves through collective bargaining; and fourthly, the Chinese-Tongan businesses are dominant and this has affected the status of employing Tongan workers, as ill-treatment of workers has been common in their workplaces, as demonstrated later in this section. The first proposition suggested that many workers in Tonga are vulnerable to structural unemployment. Increasing globalisation of trade and business activities, coupled with the involvement of Tonga in free trade agreements has allowed the mobility of foreign investments from Tonga to other countries where opportunities appear possible (Mosley and Uno, 2004). It is worth noting that most multinational enterprises (MNEs) came to Tonga and other small islands in order to maximise profits at least cost. Multinational enterprises (MNEs) have generally left Tonga when the investment incentives offered to them had expired (MLCI, 1990). Along with a number of other consequences, the withdrawal of MNEs from Tonga resulted in many workers being returned to the increasingly crowded unemployment pool (MLCI, 1989). These experiences are exemplified clearly in a brief examination of the history of the then largest garment manufacturing industry, known as the South Pacific Knitwear and Garment Manufacturing Limited. The company operated for fifteen consecutive years, established three different operations in the country and employed more than three hundred and fifty employees. The New Zealand owner and his son, as the managing director, left the country in 1990 without prior notice and are yet to fully pay employees with the salaries and entitlements owed to them (MLCI, 1990). It was later revealed from the record of the Industries Division of the Ministry of Labour, Commerce and Industries that the company’s development licence was due to expire in two weeks. They would then have been required to resume payment of duties and taxes to the government. That none of the employees were bound to any employment contract or agreement exemplifies how the lack of labour legislation contributed to the fate of these employees. In this context, it is suggested that the unemployment status of most workers is structural rather than voluntary, which is a manifestation of workers’ vulnerabilities to forces outside their control. The second issue to be examined in this section is the suggestion that many workers are underemployed in some workplaces in Tonga. It was found during the fieldwork that a large proportion of workers are employed on a casual or on-call basis. This is a new trend that is found in almost every large corporation and large family-run enterprise in Tonga. This means
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
7
that employees are only called in when there is demand for workers in a particular enterprise. When the work is done, workers are released until demand rises again. Pohiva (2003) argued that this is a trend has been introduced to Tonga by foreign companies with branches in the country, and then adopted by other employers in Tonga. For example, International Metrople Company, a Chinese Tobacco Manufacturing employs around seventy-five foreign and local workers (Chand, 2004; SIC, 2003; MLCI, 2003). International Metrople (Tonga) Company Limited main business is imported ready-made cigarette from China and pack into small packets for exporting and local sales. Some local workers only work three days a week, while the majority of workers are only called in when the packaging process is in need. Some of these workers were not happy with the way they were employed (MLCI, 2003). With appropriate labour legislation these employees would be rather less vulnerable. Strikingly, while indigenous workers were employed in precarious conditions, the company employed Chinese workers holding working permits to do the same jobs as those performed by locals. This is against the immigration law thus also highlighting poor governance and the lack of policy enforcement by the government. Moreover, this shows the tardiness of the Government in limiting the engagement of foreign workers in employment that could be performed by local workers. It should be noted that immigration regulations state clearly that foreign workers are only issued with working permits to perform work which requires skills that are not available locally. The third issue of interest is the suggestion that most Tongan workers are ‘wage takers’ and they have no involvement in deciding their wages. The majority of daily paid workers in the labour market either have little educational qualifications and skills, or are employed in jobs that do not match their skills and experiences. It should be noted that most of these workers are early drop outs from intermediate and high schools (Tatafu, 1997; MLCI, 2003). Given the size of the labour market, unskilled citizens are more likely to take up any type of job available in order to provide what they can for their personal needs and those of their families. Furthermore, since their labour is the only commodity they have to offer, many Tongan workers are more likely to fall into low quality types of employment. The finding of the Labour Market Survey 2003 suggest that the scarcity of employment opportunities available in the Tongan labour market forced workers with low human capital to engage in whatever job was available for them (MLCI, 2003). It is in this context that most low skilled workers took the employment opportunity without much consideration of the terms and conditions. The lack of proper representation has also contributed to the fate of these types of employees. In addition, the evidence indicated that these workers will continue to move from one job to the other until the right circumstances arises. Fourthly, the increasing dominance of Chinese-Tongan businesses and the type of employment they offer exemplifies the precarious status of workers in the Tongan labour market. The influx of Chinese-Tongans under the government’s Cash-for-Passports Scheme has brought new entrepreneurs to almost every business sector in the Tongan economy. In this respect they have been sources of wealth and employment creation. However, the dark side of the multi-influx of Chinese-Tongans have had some negatives effects on the potential for decent work in the labour market. The labour division of the Ministry of Labour, Commerce and Industries have recorded numerous complaints from Tongan employees, especially women for the unfair and ill treatment in Chinese-Tongan workplaces. A senior official from the labour division noted that they have received several complaints from both male and female employees for being mistreated in the workplaces of ChineseThe Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
8
Tongans. These mistreatment actions including overwork for the same pay, dirty workplaces and sexual harassment. They were forced to comply or they would be fired. The officer further elaborated that they cannot do much because there is no labour legislation that would allow us to take mediation action and to settle disputes and grievances between employers and employees at the workplace level. A close observation of most Chinese-Tongan workplaces provided evidences of new employees almost every week. The evidence had suggested that the lack of labour legislation in the country contributes to the precarious status of female workers in these workplaces. Although job seekers looked at the business establishment of Chinese-Tongans as creation of employment opportunities, the illtreatment of female workers by employers is well-known in the country. Such experiences have discouraged Tongan females from seeking employment in Chinese-Tongan businesses, and they preferred to remain unemployed. Employers on the other hand, have been aware of the desperate situation of low skilled workers and have used it as an avenue to strengthen their commitment. Tongan workers in the Janful International Hotel1, a Chinese owned hotel, revealed that they hesitated to ask for better employment conditions for female employees for fear of losing their jobs. These workers also said that some of their co-workers have had their jobs terminated, as a result of their request to discuss their employment status. They stated that these workers were all indigenous Tongans who were replaced by foreign workers, such as Chinese and Indians, in Tonga on working visas. Indeed, these workers have very little opportunity to improve their socio-economic situation with the remuneration they are given. It is in this way that the precarious situation of workers emphasised how the lack of decent work in the Tongan labour market, affected the overall socio-economic development in Tonga. A thorough investigation of how the lack of labour legislation is considered a barrier to decent work is presented in the next sub-section.
How the Lack of Labour Legislation is a Barrier to Decent Work
Much had been said in the above discussion that shows the precarious status of workers in the Tongan labour market. Given the small size of the labour market and the lack of available employment opportunities, the status of employment is largely based on whatever employment opportunities are available to them. A reasonable number of Tongan workers do not have appropriate skills and qualifications that would allow them to bargain for better employment conditions (MLCI, 2003). Instead, they have had to accept whatever is provided for them by their respective employers. However, this section will provide some key employment issues found in the Tongan labour market to demonstrate how the lack of labour legislation is considered a barrier to development of decent work.
Poor Wages for Vulnerable Working Groups
The most obvious impact of the absence of appropriate labour relations in the Tongan labour market is exemplified by poor wages and salaries of a majority of Tongan workers. This is particularly applicable to workers with very few skills, experiences and qualifications that would influence any appeal for improvements in wages, salaries, and conditions. These vulnerable groups are mostly indigenous Tongans. Their vulnerable status is demonstrated by often undertaking long hours of work for insufficient pay. The problem is worsened by the
1
Workers in the biggest hotel in Tonga, the Janful International Hotel were interviewed during fieldwork on 2324 March 2004.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
9
absence of a minimum wage policy, so that workers in the private sector are often paid very low wages (‘Uta’atu, 2000; MLCI, 2003; Tonga Statistics Department, 2003). For example, in the fieldwork research, it was revealed that some employees in the private sector are paid at a daily rate of TOP$7.00 or TOP$42.00 a week. Ten indigenous employees selected from shopkeepers, waitress and caretakers were interviewed in 2005 on their level of wages, and the extent to which they could influence the setting of their wage rates. Fifty per cent of the sample confirmed that they were paid at the daily rate of TOP$7.00, ten per cent noted that he was paid in a daily rate of TOP$8.50 and the other forty per cent noted that they were paid a daily rates ranging from TOP$9.00 to TOP$11.00. In addition, seventy per cent noted that they have had the same wage rates for the past two years, while the other thirty per cent had had a pay increase in the last three years. Out of this sample, ninety per cent had bank loans directly deducted from their wages, while ten per cent has no loan to pay. Moreover, eighty per cent have other family and social obligations that are dependent on their wages, while the other twenty per cent have no obligation to fulfil with the left over of their wages. All of these employees (100%) stated they had no influence in deciding their wages rate, as every decision was made by their employers without any consultation with them. They all suggested that performance is not a factor ever considered in terms of pay levels. Despite the small size of the sample, it is evident that the long delay in enactment of the Employment Bill 2005 has contributed to the inability of these employees to negotiate their wage rate or to engage in employment agreements. As such, it appears that many Tongan workers to fall within the category of the ‘working poor’. Moreover, the fulfilment of family and social obligations was an extra burden on these employees that further exacerbated their daily lives. Hence, the lack of appropriate labour legislation has severely limited the ability of employees to seek fairer wages from employers in search of an improvement of their socioeconomic wellbeing. Lack of improvement in their individual welfare appeared to be a serious threat to decent work, which in turn limits sustainable socio-economic development in Tonga.
Exposure to Occupational Health and Safety Hazards
The delay in enactment of labour legislation in the Tongan labour market has also aggravated serious concerns over the occupational health and safety standards and practices in many workplaces in Tonga. At present, in many construction companies in Tonga, employees work in bare feet, while others walk around danger areas without helmets, and are thus exposed to serious health risks. In the manufacturing sector, there are numbers of industries whose main businesses are manufacturing products using toxic chemicals. I visited two companies during the fieldwork and observed employees producing paints and related products in one factory, and other employees producing laundry powders in the other factory. One company is the Asian Paints Limited, a multinational enterprise which manufactures paints, while the other company manufactures laundry powder and detergent is owned by a Chinese-Tongan entrepreneur. The two companies are located facing each other within the Small Industries Centre. During both observations, employees did not wear facemasks, hand gloves or safety boots while in the production process. Employees were not interviewed during their working hours, as the respective managers were reluctant to allow the interviews to take place. Again prolonged delay in enactment of a labour legislation to enforce compulsory occupational health and safety issues poses serious health threats on the most vulnerable workers in the Tongan labour market. Given that the contents of the Bill are mainly concerned with the welfare of employees and occupational health and safety issues, workers will remain subject to precarious and dangerous working conditions until the enactment of appropriate legal frameworks. For example, the Bill provides for proper protective clothing in areas of work that may endanger employees’ health such as construction and related heavy-duty jobs
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
10
as evident in above example. It is in this way that greater exposure of workers to health hazards has denied them the right to achieve decent work.
Poor Working Conditions Aggravated Poor Performances
An analysis of different firms in countries of the OECD has revealed the link between labour standards and performances of businesses in the long run (OECD, 1996). In this sub-section I also argue that poor working conditions will lead to poor performance of workers and that would negatively affect the productivity of the workplace as a whole. Martin and Maskus (2001) argued that exploited workers are likely to perform below their maximum performance capabilities. Not only that, I also argue that workers will, by all means, find ways to supplement their poor wages and compensate for poor working conditions. These two arguments are based on the experiences of unskilled indigenous workers who are employed in precarious working conditions, such as daily paid labourers, employed either part-time or on a casual basis. Firstly, poor working conditions will lead to poor performance of employees and which has a negative effect on the performance of the business. As evident in previous sections, most employees do not understand whether their performances were considered as a factor for deciding their wages. In the manufacturing sector, greater exposure to health hazards led to higher labour turnover, as a result. In these contexts, workers are unsure whether their performances will contribute to increased wages and because of that uncertainty, they will only work just enough to complete their working hours without much commitment. In addition, their uncertainty is fuelled by the fact that the employer can lay them off at any time and their future in the company is assured. As a consequence there is a clear logic that a lack of commitment of employees will lead to poor performance and so may affect the ability of the firm to fulfil its production volume. Secondly, I argue here that poor working conditions may cause workers to find other ways of supplementing their wages. This argument stems from the experiences of the evidence presented in previous sections. Because of their low wages and poor working conditions, it is possible that workers may commit offences such as stealing from the factory, breaking machinery and equipment, and not following the proper production procedures that may lead to waste of resources. It was revealed during the fieldwork that this is typical in many workplaces. As is evident from the comment of the manager/owner of the laundry powder factory, many indigenous employees steal from his factory, which is why he is reluctant to provide safety equipment for his employees. Ritterbush (1986) revealed that thieving by employees is a common problem encountered by almost every business sector in Tonga, and a barrier to successful businesses. It is in this context that a lack of labour legislation to enforce harmonious working relationships between employers and employees appeared to not only affect decent work but also hurt the productivity of employers.
Workers Dissatisfaction Causes Industrial Disputes
In this sub-section I will argue that the delay in enacting labour legislation that would enforce and harmonise the relationship between employers and employees could cause industrial disputes. This argument stems from the experiences of indigenous Tongans, especially unskilled workers, who have little time to discuss their grievances and can walk out of the job anytime. It was revealed during the fieldwork that this is particularly common in multinational enterprises, foreign-owned companies, and local companies managed by foreigners. One may argue that this argument has the element of discrimination against foreign businesses and foreign managers in Tonga. Rather, this is not to discriminate against
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
11
foreigners, but is an evident reality in the Tongan labour market. Many foreign-owned businesses have encountered production disruptions caused by indigenous employees, which have been recorded by the Ministry (MLCI, 2003). Organised industrial disputes have been very rare but the occurrence of ad hoc or ‘wildcat’ disputes in the workplace has a long history in the Tongan labour market. Consequently, the effect of industrial disputes has been severe on some companies which resulted in downsizing of operations and imposition of strict company policies. Some businesses closed down and had relocated elsewhere out of Tonga (MLCI, 2003). Yet with legislation and regulation, the affect of such disputes could have been avoided. The severity of industrial disputes exemplified how unlawful industrial action could harm the performance of labour intensive businesses in Tonga. This type of dispute could have been avoided by robust but peaceful dialogue specified in the labour legislation and spelled out in Part Four of the ILO decent work agenda (ILO, 1999). It is through social dialogue that employers and employees could find a way to solve the problem without disrupting the production of the company. It is also in this context that I argue that the lack of appropriate labour legislation has not only affected the welfare and livelihood of unskilled workers, but it also has detrimental effect on the performance of businesses. Hence, this experience established the link between decent work and business performances. It is not only in the private sector that the absence of labour legislation has weakened the opportunities for fairness in employment and advancement of development of decent work. A study of a major public sector dispute also shows this. Conclusion The discussion in this chapter established how the problem of prolonged absence of labour legislations has negative effect on the development of decent work in the Tongan labour market. The argument stems from the fact that the Tongan labour market has for long operated without labour legislation and the employers’ domination in the workplace has contributed to putting vulnerable workers into poverty. Some researchers (Busse, 2002; Harris, 2002) suggested that labour legislation will cause a distortion in the performances of small businesses in countries like Tonga. On the other hand if the emphasis is on development rather than growth based on exploitation of labour, then as researchers (Imbun, 2006; Martin and Maskus, 2001; Hess, 1998 & 1992; Hirsch, 1997), have argued that labour legislation could play a vital role in promoting decent work in the Tongan labour market. Hence decent work would contribute to successful performances of workplaces, as well as the socioeconomic development of the nation. The experience of the Tongan labour market performance provides the benchmark for further exploring the feasibility of labour legislation in Tonga.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
12
References
Busse, M. (2002). Do Labour Standard Affect Comparative Advantage in Developing Countries? World Development, 30(11):1921-1932. Chand, A. (2004). Employment, The Labour Market and Industrial Relations in Tonga, Pacific Institute of Advanced Studies in Development and Governance, Employment and Labour Market Studies Working Paper No.1/2004, University of the South Pacific, Suva. Hess, M., (1998). Development: Work, Management and Culture, National Centre for Development Study, ANU, Canberra. Hirsch, B.T., (1997). Unionisation and Economic Performance: Evidence on Productivity, Profits, Investment, and Growth. In Mihlar, F.,(ed), Unions and Right-to-Work Laws, The Fraser Institute, Vancouver. Imbun, Y.B., (2006). Labour Markets, Economic Development and Regional Economic Integration: A Benchmark Study and Way Forward, School of Management Working Paper, University of Western Sydney, Australia. International Labour Organisation. (2006). Decent Work in the South Pacific, ILO Publication, Suva. Ministry of Labour. Commerce and Industries, (2004). Annual Report, Government of Tonga, Nuku’alofa. _____, (2004). Labour Division Annual Report, Government Printing, Nuku’alofa. _____, (2003). Annual Report, Government Printing, Nuku’alofa. _____, (2003). Labour Market Information Survey, Labour and Employment Service Division, Government of Tonga, Nuku’alofa. _____, (2002). Annual Report, Government Printing, Nuku’alofa. _____, (2000). Report on Public Consultation on Proposed Employment Bill, Labour Division, Government Printing, Nuku’alofa. _____, (1997). Annual Report, Government Printing, Nuku’alofa. _____, (1996). Annual Report, Government Printing, Nuku’alofa. _____, (1995). Annual Report, Government Printing, Nukuálofa. _____, (1990). Annual Report, Government Printing, Nuku’alofa. _____, (1986).‘Progress Report on Labour Scheme’, Labour Administration Division, Government Printing, Nuku’alofa. _____, (1981). Annual Report, Government Printing, Nuku’alofa. _____, (1980). Annual Report, Government Printing, Nuku’alofa. Mosley, L. and Uno, S., (2004). Racing to the Bottom or Climbing to the Top?: Foreign Direct Investment and Labour Rights Violations, Department of Political Science, University of Notre Dame. Pohiva, A. (2004). Personal Presentation to Roundtable Meeting with Senior Australian Foreign Affairs Official, Canberra. Prasad, S. and Hince, K., (2001). Industrial Relations in the South Pacific, School of Social and Economic Development, University of the South Pacific, Suva. Ritterbush, D.S., (1986). Entrepreneurship and Business Venture Development in the Kingdom of Tonga, Pacific Island Development Program, East-West Centre, Honolulu. Sevele, F., (2003). The Future of the Economy is Unclear, Taimi ‘o Tonga, Vol.11, March, p.8, Nuku’alofa. Small Industries Centre, (2003). Quarterly Report – June Quarter, Government of Tonga, Nuku’alofa. Tatafu, M., (1997). Early School Leaving: A Crisis in Secondary Schooling in Tonga, Unpublished PhD Thesis, University of Wollongong, Australia. Tonga Statistics Department,(2003). Labour Force Survey Report, Government of Tonga, Nuku’alofa. ‘Uta’atu, C., (2000). Report on Salary and Wages Survey in the Tongan Labour Market, ‘Uta’atu and Associates, Nuku’alofa.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
13
doc_662523253.pdf
A leave of absence (LOA) is a period of time that one must be away from his/her primary job, while maintaining the status of employee. This contrasts with normal periods away from the workplace, such as vacations, holidays, hiatuses, sabbaticals, and "working from home" programs, in that they are considered exceptional circumstances, rather than benefits.
THE IMPACT OF PROLONGED ABSENCE OF LABOUR LEGISLATION IN PROMOTING DECENT WORK IN TONGA
Dr Fotu K. V. Fisi’iahi
Centre for Work and Labour Market Studies Faculty of Business Auckland University of Technology 42 Wakefield Street Auckland Central New Zealand Tel: +649 921 9999 Ext. 5038 Mobile: 021 0222 5833 Email: [email protected]
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
1
THE IMPACT OF PROLONGED ABSENCE OF LABOUR LEGISLATION IN PROMOTING DECENT WORK IN TONGA
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
2
Abstract
This paper argues that because there has been a lack of any robust labour legislation in Tonga that governs the employment relationship and the level of working conditions and wages, there has been a detrimental impact on socio-economic performance of Tonga. As most businesses in Tonga are labour intensive, this becomes not only problematic but also an important issue. The main focus of the paper, therefore, is to identify the three key forms such implications of the absence of appropriate labour legislations take. First, the absence of appropriate labour legislation contributes to worsening the poverty of low paid workers and vulnerable groups in the labour market, thus affecting their socio-economic wellbeing and livelihood. Second, the impact of the lack of labour legislation on working conditions may discourage employee commitment, especially in those labour intensive industries and in turn may affect productivity and performance. Third, following from point one and two, the absence of labour legislation not only affects decent working conditions for employees and their performance but it may also have a detrimental effect on the socio-economic development of the country.
Introduction A study by Chand (2004) on labour market and industrial relations revealed that Tonga is the only country in the South Pacific region that does not have labour legislation in place for the purpose of governing the interests of various parties in the labour market. This absence of any comprehensive employment legislation largely affected the private sector. The reason being is that until 1986 an establishment code (ESTACODE) defined the terms and conditions of the employment of public servants. The ESTACODE 1986 was repealed in 2002 and replaced with the Public Service Commission Act 2002. By 2006 a new draft employment framework had been proposed but it is yet to be enacted. Although the Trade Union Act Cap 138 of 1964 was enacted way back in 1964, it is yet to be implemented due to the reluctance of the government to draft regulations that would enable the effect of the Act as law, and to legalise the formation of employees’ associations. Despite this deficiency, a number of employees’ associations have been formed and registered under the Incorporate Societies Act. These organisations include the Friendly Islands Teachers’ Association (FITA), Tonga Nurses’ Association (TNA), Tonga Medical Doctors’ Association (TMDA), and recently the Tonga Public Servants’ Association (TPSA). Although they are legally registered, these organisations do not have any mandatory power to engage in compulsory dialogue with employers on behalf of their employees. Any opportunity to have an open dialogue is at the sole consent of the employer, which has continued to remain a problematic process. Hence, the Tongan labour market, particularly in the private sector, is still operating in a precarious environment, an issue of interest, which will be discussed in this paper. Given the prolonged absence of appropriate labour legislation to protect the interests of the employers and employees in the workplaces, it is necessary to explore the reasons why there has been such a protracted delay. The purpose of this paper is to present findings of doctoral study that sheds light on the factors that have hampered the enactment of orthodox labour legislation by successive governments and the detrimental outcomes this has had on the working conditions in Tonga. In addition, the outcome of this discussion may assist policy makers in Tonga in attempting to put in place some sort of legal framework that would provide employers and employees with mandatory obligations in the workplace.
Trade Union Act 1964 – A Hoax
The first industrial relations legislation in Tonga was the Trade Union Act Cap 138 of 1964 which dates back to the construction of the Queen Salote Wharf, the largest international wharf in the Kingdom of Tonga. According to the Tongan Ministry of Works, the construction of the wharf was funded by the British Government, under a British
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
3
Commonwealth Fund, to countries under its protection. One of the conditions of the aid program required that some sort of trade union legislation was put in place to protect workers during the construction. The legislation was drafted and compiled in the United Kingdom, at the time while Tonga was still a protectorate of the British Government and largely adhered to the Laws of the United Kingdom (Prasad and Hince, 2001; MLCI, 2000). It has been argued by the Human Rights and Pro-Democracy movement advocates that the Trade Union Act has never been activated since for reasons that the government had never revealed to the public. The issue was discussed in a television program by Mr Finau Tutone, President of Friendly Islands Teacher’s Association (FITA), MP ‘Akilisi Pohiva, Human Rights and Democracy Movement Advocate and people’s Number One representative to parliament, and the author of this paper. The panel was televised live through the Television Tonga on 14 December, 2000. The main argument proposed by this live televised panel, was that the Trade Union Act was only enacted for the purposes of obtaining the aid and fulfilling the terms and conditions set by the British Government. Other researchers into the Tongan labour market confirmed this argument including Prasad and Hince who quoted:
In the Tongan situation the government passed the legislation through parliament as the quid pro quo for a cash grant from the UK government to enable the construction of the Queen Salote Wharf (Prasad and Hince, 2001:45).
Investigation later revealed that no regulations had ever been put in place to implement the Trade Union Act 1964. Despite the call from various advocates to revive the Trade Union Act of 1964, which is very much needed as industrial disputes and exploitation of labour have become a norm in most workplaces, there has been very little success in these efforts. As a result, the Tongan labour market still remains without a legal framework that will give workers the right to collectively defend their rights and to enforce compulsory consultation and negotiation with employers. For these reasons, it is argued that employees will remain victims of the labour market until the Trade Union Act 1964 is made operative or a new legal employment relations framework is introduced, as has been attempted several times. Multi-Drafts of the Employment Relations Bill – A Controversial Piece of Legislation
First Draft - 1982
The initial draft of labour legislation in Tonga dates back to 1982. The Ministry of Labour, Commerce and Industries was given the mandate of drafting a Terms of Employment Bill as a priority of its key function. A draft of Terms of Employment Bill 1982 was prepared and submitted for the perusal of cabinet members but was never approved for tabling in parliament (MLCI, 1982 & 1983). The reports indicated that further direction from government to redraft the piece of legislation but there was no record of any attempt by government to table the draft in parliament or discuss it.
Second Draft - 1993
The attempt to revive the issue of drafting labour legislation came about in the early half of 1990s under the mandate of a new Minister of Labour. In response to a directive from the government, the Ministry of Labour, Commerce and Industries requested the assistance of the International Labour Organisation (ILO) for a legal framework to be put in place (MLCI, 1993). The ILO provided a consultant under a project known as the Employment Promotions and Labour Administration (EMPLA Project) to conduct the work 1993, and a new Bill called the Terms and Conditions of Employment Bill was put in place for public consultation. This
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
4
Bill was specifically applicable to the private sector, as the Establishment Code (ESTACODE) covered the public service and its employees at the time. After several consultations with the public, and in the private sector, the ILO Consultant and his Tongan counterpart recommended the tabling of the Bill to the legislative assembly during its 1995 session. The terms and conditions of Employment Bill 1995 were submitted to Cabinet and approval for tabling in parliament in its 1995 seating was granted. Preparation for tabling the Bill included bilingual translation as well as the binding, and distribution to Members of Parliament. Despite these efforts, the Minister for Labour, Commerce and Industries withdrew the Bill on the date that was set for deliberation in parliament (MLCI, 1995). The MLCI report does not record any reason for the last minute withdrawal of the Bill. However, as part of my doctoral studies, I investigated the matter further, and found that the reason for the last minute withdrawal of the Bill from parliament was provided by the Tongatapu longest surviving People’s Representative to parliament. He suggested that in informal consultation by Government representatives and some members of the Legislative Assembly before Parliament resumed, concerns were raised relating to the likely impact of the legislation on the economy. As he put it:
The Bill came at the wrong time, as most of the elected members as well as nobles and a number of ministers were engaged in business undertaking. They strongly opposed the Bill during informal discussion in the parliament common room. They were very concerned at the likely impact of the Bill in the economy, in terms of labour instability. Their positions were very weak and were of personal interest. However, the Minister was not strong enough to defend his Bill and as a result he called for the withdrawal of the Bill as soon as the House resumed that morning (MP-Tt01, pers. comm., 2002).
It was revealed that two members of the Tongatapu electorate, two from the Vava’u electorate, one each from the Ha’apai and ‘Eua islands electorates were all business owners. In addition, five of the nobles’ representatives and two government ministers engaged in business partnerships (MLCI, 1993 & 1995). However, whatever the other reasons were for the last minute withdrawal of the Bill by the Minister of Labour, it is argued that the business interests of Members of Parliaments played a large part in the prolonged absence of a labour legislation in the Tongan labour market.
Third Draft - 2002
The Bill was re-drafted after wide-ranging consultation with the private sector and the general public between the years 2000 – 2002, under a new Minister but it has never been tabled for debate in Parliament. The Bill was renamed the Employment Bill 2002 and was rewritten to cover all employees in both public and private sectors. Despite the high government expenditure in public consultations and preparation of the Bill, the process of submitting to parliament stalled the implementation of this piece of legislation. It was further argued by politicians, members of the Friendly Island Teachers’ Association, and interested members of the public that the Bill is unlikely to be enacted in the near future for two reasons. First, the Bill is considered to be the most controversial legal framework ever proposed for Tonga. This was revealed during the private sector and public consultations led by the author. Many employers were reluctant to accept the enactment of the proposed Bill, despite comprehensive assurance that the Bill would offer benefits for both employers and employees. For example, the Bill directed that compulsory employment contracts that would spell out not only responsibilities of employers to employees, but also vice versa.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
5
Secondly, as revealed during consultation with members of Parliament, some members of the legislative assembly are involved in business and therefore have a conflict of interest between their responsibilities to the citizens of Tonga and their business concerns (Chand, 2004). Public and Government consultations on the proposed Employment Bill was conducted by a team from the Ministry of Labour, Commerce and Industries led by the author during 20002002. The results of the various consultations are confirmed by the findings of Chand (2004). In the preparation for the 2005 parliamentary elections, some members of the public called for the elimination of candidates with business interests, as these interests were likely to conflict with their parliamentary roles. Despite these efforts, the Bill is yet to be submitted to Parliament.
Fourth Draft - 2005
In the effort to put labour legislation in place and in quick response by government to the Civil Servants’ Strike of 2005, the Labour Division was directed by the new minister who is also the Prime Minister to revive working on the Employment Relations Bill 2005. In this effort, the Prime Minister, in his capacity as the Minister responsible for Labour, Commerce and Industries, travelled to the Fiji Islands to explore the possibilities of adopting their Employment Legislation to be used in Tonga (MLCI, 2005). In a public statement, the Minister elaborated:
The proposed Bill is important for the future development of the Tongan economy, as it will avoid any further industrial disputes in both public and private sectors. This Bill is aimed at harmonising employment relationships in Tongan workplaces, as it will allow compulsory dialogue of parties to the employment relationship (Sevele, 2005:1).
At the beginning of 2006, it was revealed that the Labour Division of the Ministry of Labour, Commerce and Industries was preparing for further public consultations. However, the recent restructure of the Tongan government, in which government ministries and departments are being streamlined and reduced from thirty two ministries to fourteen, put a hold in the process of public consultations. In a recent public document, the head of the labour division and officer-in-charge of the public consultations process noted that the consultation and implementation processes would resume in the last quarter of 2006. He also noted:
We are expecting to table the Bill into Cabinet by end of September 2006 before submission to parliament for deliberations and approval for enactment. We are hoping to get the Act operative as early as January 2007 if everything goes smoothly and according to our plan of action (GO-01, pers. comm, 2006:1).
However, the evidence provided to date indicates that the difficulties in the process of enacting the labour legislation in the Tongan labour market so far are still largely extant. In addition, the evidence suggested that the four different ministers who were responsible, and who have different views on the nature of the Bill also contributed to the prolonged absence of a legal framework in the labour market. The prolonged process of approving the Employment Bill and Tonga’s failure to warrant its enactment poses a serious threat to the employment relationship in Tonga. Lack of appropriate Labour Legislations: A Barrier to Decent Work? The absence of appropriate labour legislation in the Tongan labour market has had a detrimental effect on the welfare and livelihood of Tongan workers, and the economy as a whole. To support this assertion, the purpose of this section is to investigate how the absence
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
6
of appropriate labour legislation is a barrier to the development of decent work in the Tongan labour market. Given the importance of investigating the factors that may affect decent work in Tonga, this section is divided into two major parts. Part one presents and discusses the precarious status of workers in the labour market by demonstrating real workplace experiences revealed during the fieldwork. Part two will investigate and demonstrate how the absence of appropriate labour legislation is considered a barrier to promoting decent work in Tongan workplaces. It is central to this investigation to establish a link between the labour legislation and decent work, and how these can contribute to the socio-economic wellbeing and livelihood of Tongan workers.
Part 1: Precarious Status of Workers in Tongan Workplaces
There has been sufficient evidence to argue that the forces generated by globalisation are already felt by the working population in the Tongan labour market. This argument stems from a number of material issues that have occurred in the Tongan labour market. Firstly, employees are subject to structural unemployment; secondly, many employees are underemployed; thirdly, many workers in the Tongan labour market are ‘wage takers’- they are not involved in deciding their wage levels and do not represent themselves through collective bargaining; and fourthly, the Chinese-Tongan businesses are dominant and this has affected the status of employing Tongan workers, as ill-treatment of workers has been common in their workplaces, as demonstrated later in this section. The first proposition suggested that many workers in Tonga are vulnerable to structural unemployment. Increasing globalisation of trade and business activities, coupled with the involvement of Tonga in free trade agreements has allowed the mobility of foreign investments from Tonga to other countries where opportunities appear possible (Mosley and Uno, 2004). It is worth noting that most multinational enterprises (MNEs) came to Tonga and other small islands in order to maximise profits at least cost. Multinational enterprises (MNEs) have generally left Tonga when the investment incentives offered to them had expired (MLCI, 1990). Along with a number of other consequences, the withdrawal of MNEs from Tonga resulted in many workers being returned to the increasingly crowded unemployment pool (MLCI, 1989). These experiences are exemplified clearly in a brief examination of the history of the then largest garment manufacturing industry, known as the South Pacific Knitwear and Garment Manufacturing Limited. The company operated for fifteen consecutive years, established three different operations in the country and employed more than three hundred and fifty employees. The New Zealand owner and his son, as the managing director, left the country in 1990 without prior notice and are yet to fully pay employees with the salaries and entitlements owed to them (MLCI, 1990). It was later revealed from the record of the Industries Division of the Ministry of Labour, Commerce and Industries that the company’s development licence was due to expire in two weeks. They would then have been required to resume payment of duties and taxes to the government. That none of the employees were bound to any employment contract or agreement exemplifies how the lack of labour legislation contributed to the fate of these employees. In this context, it is suggested that the unemployment status of most workers is structural rather than voluntary, which is a manifestation of workers’ vulnerabilities to forces outside their control. The second issue to be examined in this section is the suggestion that many workers are underemployed in some workplaces in Tonga. It was found during the fieldwork that a large proportion of workers are employed on a casual or on-call basis. This is a new trend that is found in almost every large corporation and large family-run enterprise in Tonga. This means
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
7
that employees are only called in when there is demand for workers in a particular enterprise. When the work is done, workers are released until demand rises again. Pohiva (2003) argued that this is a trend has been introduced to Tonga by foreign companies with branches in the country, and then adopted by other employers in Tonga. For example, International Metrople Company, a Chinese Tobacco Manufacturing employs around seventy-five foreign and local workers (Chand, 2004; SIC, 2003; MLCI, 2003). International Metrople (Tonga) Company Limited main business is imported ready-made cigarette from China and pack into small packets for exporting and local sales. Some local workers only work three days a week, while the majority of workers are only called in when the packaging process is in need. Some of these workers were not happy with the way they were employed (MLCI, 2003). With appropriate labour legislation these employees would be rather less vulnerable. Strikingly, while indigenous workers were employed in precarious conditions, the company employed Chinese workers holding working permits to do the same jobs as those performed by locals. This is against the immigration law thus also highlighting poor governance and the lack of policy enforcement by the government. Moreover, this shows the tardiness of the Government in limiting the engagement of foreign workers in employment that could be performed by local workers. It should be noted that immigration regulations state clearly that foreign workers are only issued with working permits to perform work which requires skills that are not available locally. The third issue of interest is the suggestion that most Tongan workers are ‘wage takers’ and they have no involvement in deciding their wages. The majority of daily paid workers in the labour market either have little educational qualifications and skills, or are employed in jobs that do not match their skills and experiences. It should be noted that most of these workers are early drop outs from intermediate and high schools (Tatafu, 1997; MLCI, 2003). Given the size of the labour market, unskilled citizens are more likely to take up any type of job available in order to provide what they can for their personal needs and those of their families. Furthermore, since their labour is the only commodity they have to offer, many Tongan workers are more likely to fall into low quality types of employment. The finding of the Labour Market Survey 2003 suggest that the scarcity of employment opportunities available in the Tongan labour market forced workers with low human capital to engage in whatever job was available for them (MLCI, 2003). It is in this context that most low skilled workers took the employment opportunity without much consideration of the terms and conditions. The lack of proper representation has also contributed to the fate of these types of employees. In addition, the evidence indicated that these workers will continue to move from one job to the other until the right circumstances arises. Fourthly, the increasing dominance of Chinese-Tongan businesses and the type of employment they offer exemplifies the precarious status of workers in the Tongan labour market. The influx of Chinese-Tongans under the government’s Cash-for-Passports Scheme has brought new entrepreneurs to almost every business sector in the Tongan economy. In this respect they have been sources of wealth and employment creation. However, the dark side of the multi-influx of Chinese-Tongans have had some negatives effects on the potential for decent work in the labour market. The labour division of the Ministry of Labour, Commerce and Industries have recorded numerous complaints from Tongan employees, especially women for the unfair and ill treatment in Chinese-Tongan workplaces. A senior official from the labour division noted that they have received several complaints from both male and female employees for being mistreated in the workplaces of ChineseThe Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
8
Tongans. These mistreatment actions including overwork for the same pay, dirty workplaces and sexual harassment. They were forced to comply or they would be fired. The officer further elaborated that they cannot do much because there is no labour legislation that would allow us to take mediation action and to settle disputes and grievances between employers and employees at the workplace level. A close observation of most Chinese-Tongan workplaces provided evidences of new employees almost every week. The evidence had suggested that the lack of labour legislation in the country contributes to the precarious status of female workers in these workplaces. Although job seekers looked at the business establishment of Chinese-Tongans as creation of employment opportunities, the illtreatment of female workers by employers is well-known in the country. Such experiences have discouraged Tongan females from seeking employment in Chinese-Tongan businesses, and they preferred to remain unemployed. Employers on the other hand, have been aware of the desperate situation of low skilled workers and have used it as an avenue to strengthen their commitment. Tongan workers in the Janful International Hotel1, a Chinese owned hotel, revealed that they hesitated to ask for better employment conditions for female employees for fear of losing their jobs. These workers also said that some of their co-workers have had their jobs terminated, as a result of their request to discuss their employment status. They stated that these workers were all indigenous Tongans who were replaced by foreign workers, such as Chinese and Indians, in Tonga on working visas. Indeed, these workers have very little opportunity to improve their socio-economic situation with the remuneration they are given. It is in this way that the precarious situation of workers emphasised how the lack of decent work in the Tongan labour market, affected the overall socio-economic development in Tonga. A thorough investigation of how the lack of labour legislation is considered a barrier to decent work is presented in the next sub-section.
How the Lack of Labour Legislation is a Barrier to Decent Work
Much had been said in the above discussion that shows the precarious status of workers in the Tongan labour market. Given the small size of the labour market and the lack of available employment opportunities, the status of employment is largely based on whatever employment opportunities are available to them. A reasonable number of Tongan workers do not have appropriate skills and qualifications that would allow them to bargain for better employment conditions (MLCI, 2003). Instead, they have had to accept whatever is provided for them by their respective employers. However, this section will provide some key employment issues found in the Tongan labour market to demonstrate how the lack of labour legislation is considered a barrier to development of decent work.
Poor Wages for Vulnerable Working Groups
The most obvious impact of the absence of appropriate labour relations in the Tongan labour market is exemplified by poor wages and salaries of a majority of Tongan workers. This is particularly applicable to workers with very few skills, experiences and qualifications that would influence any appeal for improvements in wages, salaries, and conditions. These vulnerable groups are mostly indigenous Tongans. Their vulnerable status is demonstrated by often undertaking long hours of work for insufficient pay. The problem is worsened by the
1
Workers in the biggest hotel in Tonga, the Janful International Hotel were interviewed during fieldwork on 2324 March 2004.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
9
absence of a minimum wage policy, so that workers in the private sector are often paid very low wages (‘Uta’atu, 2000; MLCI, 2003; Tonga Statistics Department, 2003). For example, in the fieldwork research, it was revealed that some employees in the private sector are paid at a daily rate of TOP$7.00 or TOP$42.00 a week. Ten indigenous employees selected from shopkeepers, waitress and caretakers were interviewed in 2005 on their level of wages, and the extent to which they could influence the setting of their wage rates. Fifty per cent of the sample confirmed that they were paid at the daily rate of TOP$7.00, ten per cent noted that he was paid in a daily rate of TOP$8.50 and the other forty per cent noted that they were paid a daily rates ranging from TOP$9.00 to TOP$11.00. In addition, seventy per cent noted that they have had the same wage rates for the past two years, while the other thirty per cent had had a pay increase in the last three years. Out of this sample, ninety per cent had bank loans directly deducted from their wages, while ten per cent has no loan to pay. Moreover, eighty per cent have other family and social obligations that are dependent on their wages, while the other twenty per cent have no obligation to fulfil with the left over of their wages. All of these employees (100%) stated they had no influence in deciding their wages rate, as every decision was made by their employers without any consultation with them. They all suggested that performance is not a factor ever considered in terms of pay levels. Despite the small size of the sample, it is evident that the long delay in enactment of the Employment Bill 2005 has contributed to the inability of these employees to negotiate their wage rate or to engage in employment agreements. As such, it appears that many Tongan workers to fall within the category of the ‘working poor’. Moreover, the fulfilment of family and social obligations was an extra burden on these employees that further exacerbated their daily lives. Hence, the lack of appropriate labour legislation has severely limited the ability of employees to seek fairer wages from employers in search of an improvement of their socioeconomic wellbeing. Lack of improvement in their individual welfare appeared to be a serious threat to decent work, which in turn limits sustainable socio-economic development in Tonga.
Exposure to Occupational Health and Safety Hazards
The delay in enactment of labour legislation in the Tongan labour market has also aggravated serious concerns over the occupational health and safety standards and practices in many workplaces in Tonga. At present, in many construction companies in Tonga, employees work in bare feet, while others walk around danger areas without helmets, and are thus exposed to serious health risks. In the manufacturing sector, there are numbers of industries whose main businesses are manufacturing products using toxic chemicals. I visited two companies during the fieldwork and observed employees producing paints and related products in one factory, and other employees producing laundry powders in the other factory. One company is the Asian Paints Limited, a multinational enterprise which manufactures paints, while the other company manufactures laundry powder and detergent is owned by a Chinese-Tongan entrepreneur. The two companies are located facing each other within the Small Industries Centre. During both observations, employees did not wear facemasks, hand gloves or safety boots while in the production process. Employees were not interviewed during their working hours, as the respective managers were reluctant to allow the interviews to take place. Again prolonged delay in enactment of a labour legislation to enforce compulsory occupational health and safety issues poses serious health threats on the most vulnerable workers in the Tongan labour market. Given that the contents of the Bill are mainly concerned with the welfare of employees and occupational health and safety issues, workers will remain subject to precarious and dangerous working conditions until the enactment of appropriate legal frameworks. For example, the Bill provides for proper protective clothing in areas of work that may endanger employees’ health such as construction and related heavy-duty jobs
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
10
as evident in above example. It is in this way that greater exposure of workers to health hazards has denied them the right to achieve decent work.
Poor Working Conditions Aggravated Poor Performances
An analysis of different firms in countries of the OECD has revealed the link between labour standards and performances of businesses in the long run (OECD, 1996). In this sub-section I also argue that poor working conditions will lead to poor performance of workers and that would negatively affect the productivity of the workplace as a whole. Martin and Maskus (2001) argued that exploited workers are likely to perform below their maximum performance capabilities. Not only that, I also argue that workers will, by all means, find ways to supplement their poor wages and compensate for poor working conditions. These two arguments are based on the experiences of unskilled indigenous workers who are employed in precarious working conditions, such as daily paid labourers, employed either part-time or on a casual basis. Firstly, poor working conditions will lead to poor performance of employees and which has a negative effect on the performance of the business. As evident in previous sections, most employees do not understand whether their performances were considered as a factor for deciding their wages. In the manufacturing sector, greater exposure to health hazards led to higher labour turnover, as a result. In these contexts, workers are unsure whether their performances will contribute to increased wages and because of that uncertainty, they will only work just enough to complete their working hours without much commitment. In addition, their uncertainty is fuelled by the fact that the employer can lay them off at any time and their future in the company is assured. As a consequence there is a clear logic that a lack of commitment of employees will lead to poor performance and so may affect the ability of the firm to fulfil its production volume. Secondly, I argue here that poor working conditions may cause workers to find other ways of supplementing their wages. This argument stems from the experiences of the evidence presented in previous sections. Because of their low wages and poor working conditions, it is possible that workers may commit offences such as stealing from the factory, breaking machinery and equipment, and not following the proper production procedures that may lead to waste of resources. It was revealed during the fieldwork that this is typical in many workplaces. As is evident from the comment of the manager/owner of the laundry powder factory, many indigenous employees steal from his factory, which is why he is reluctant to provide safety equipment for his employees. Ritterbush (1986) revealed that thieving by employees is a common problem encountered by almost every business sector in Tonga, and a barrier to successful businesses. It is in this context that a lack of labour legislation to enforce harmonious working relationships between employers and employees appeared to not only affect decent work but also hurt the productivity of employers.
Workers Dissatisfaction Causes Industrial Disputes
In this sub-section I will argue that the delay in enacting labour legislation that would enforce and harmonise the relationship between employers and employees could cause industrial disputes. This argument stems from the experiences of indigenous Tongans, especially unskilled workers, who have little time to discuss their grievances and can walk out of the job anytime. It was revealed during the fieldwork that this is particularly common in multinational enterprises, foreign-owned companies, and local companies managed by foreigners. One may argue that this argument has the element of discrimination against foreign businesses and foreign managers in Tonga. Rather, this is not to discriminate against
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
11
foreigners, but is an evident reality in the Tongan labour market. Many foreign-owned businesses have encountered production disruptions caused by indigenous employees, which have been recorded by the Ministry (MLCI, 2003). Organised industrial disputes have been very rare but the occurrence of ad hoc or ‘wildcat’ disputes in the workplace has a long history in the Tongan labour market. Consequently, the effect of industrial disputes has been severe on some companies which resulted in downsizing of operations and imposition of strict company policies. Some businesses closed down and had relocated elsewhere out of Tonga (MLCI, 2003). Yet with legislation and regulation, the affect of such disputes could have been avoided. The severity of industrial disputes exemplified how unlawful industrial action could harm the performance of labour intensive businesses in Tonga. This type of dispute could have been avoided by robust but peaceful dialogue specified in the labour legislation and spelled out in Part Four of the ILO decent work agenda (ILO, 1999). It is through social dialogue that employers and employees could find a way to solve the problem without disrupting the production of the company. It is also in this context that I argue that the lack of appropriate labour legislation has not only affected the welfare and livelihood of unskilled workers, but it also has detrimental effect on the performance of businesses. Hence, this experience established the link between decent work and business performances. It is not only in the private sector that the absence of labour legislation has weakened the opportunities for fairness in employment and advancement of development of decent work. A study of a major public sector dispute also shows this. Conclusion The discussion in this chapter established how the problem of prolonged absence of labour legislations has negative effect on the development of decent work in the Tongan labour market. The argument stems from the fact that the Tongan labour market has for long operated without labour legislation and the employers’ domination in the workplace has contributed to putting vulnerable workers into poverty. Some researchers (Busse, 2002; Harris, 2002) suggested that labour legislation will cause a distortion in the performances of small businesses in countries like Tonga. On the other hand if the emphasis is on development rather than growth based on exploitation of labour, then as researchers (Imbun, 2006; Martin and Maskus, 2001; Hess, 1998 & 1992; Hirsch, 1997), have argued that labour legislation could play a vital role in promoting decent work in the Tongan labour market. Hence decent work would contribute to successful performances of workplaces, as well as the socioeconomic development of the nation. The experience of the Tongan labour market performance provides the benchmark for further exploring the feasibility of labour legislation in Tonga.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
12
References
Busse, M. (2002). Do Labour Standard Affect Comparative Advantage in Developing Countries? World Development, 30(11):1921-1932. Chand, A. (2004). Employment, The Labour Market and Industrial Relations in Tonga, Pacific Institute of Advanced Studies in Development and Governance, Employment and Labour Market Studies Working Paper No.1/2004, University of the South Pacific, Suva. Hess, M., (1998). Development: Work, Management and Culture, National Centre for Development Study, ANU, Canberra. Hirsch, B.T., (1997). Unionisation and Economic Performance: Evidence on Productivity, Profits, Investment, and Growth. In Mihlar, F.,(ed), Unions and Right-to-Work Laws, The Fraser Institute, Vancouver. Imbun, Y.B., (2006). Labour Markets, Economic Development and Regional Economic Integration: A Benchmark Study and Way Forward, School of Management Working Paper, University of Western Sydney, Australia. International Labour Organisation. (2006). Decent Work in the South Pacific, ILO Publication, Suva. Ministry of Labour. Commerce and Industries, (2004). Annual Report, Government of Tonga, Nuku’alofa. _____, (2004). Labour Division Annual Report, Government Printing, Nuku’alofa. _____, (2003). Annual Report, Government Printing, Nuku’alofa. _____, (2003). Labour Market Information Survey, Labour and Employment Service Division, Government of Tonga, Nuku’alofa. _____, (2002). Annual Report, Government Printing, Nuku’alofa. _____, (2000). Report on Public Consultation on Proposed Employment Bill, Labour Division, Government Printing, Nuku’alofa. _____, (1997). Annual Report, Government Printing, Nuku’alofa. _____, (1996). Annual Report, Government Printing, Nuku’alofa. _____, (1995). Annual Report, Government Printing, Nukuálofa. _____, (1990). Annual Report, Government Printing, Nuku’alofa. _____, (1986).‘Progress Report on Labour Scheme’, Labour Administration Division, Government Printing, Nuku’alofa. _____, (1981). Annual Report, Government Printing, Nuku’alofa. _____, (1980). Annual Report, Government Printing, Nuku’alofa. Mosley, L. and Uno, S., (2004). Racing to the Bottom or Climbing to the Top?: Foreign Direct Investment and Labour Rights Violations, Department of Political Science, University of Notre Dame. Pohiva, A. (2004). Personal Presentation to Roundtable Meeting with Senior Australian Foreign Affairs Official, Canberra. Prasad, S. and Hince, K., (2001). Industrial Relations in the South Pacific, School of Social and Economic Development, University of the South Pacific, Suva. Ritterbush, D.S., (1986). Entrepreneurship and Business Venture Development in the Kingdom of Tonga, Pacific Island Development Program, East-West Centre, Honolulu. Sevele, F., (2003). The Future of the Economy is Unclear, Taimi ‘o Tonga, Vol.11, March, p.8, Nuku’alofa. Small Industries Centre, (2003). Quarterly Report – June Quarter, Government of Tonga, Nuku’alofa. Tatafu, M., (1997). Early School Leaving: A Crisis in Secondary Schooling in Tonga, Unpublished PhD Thesis, University of Wollongong, Australia. Tonga Statistics Department,(2003). Labour Force Survey Report, Government of Tonga, Nuku’alofa. ‘Uta’atu, C., (2000). Report on Salary and Wages Survey in the Tongan Labour Market, ‘Uta’atu and Associates, Nuku’alofa.
The Impact of Prolonged Absence of Labour Legislation in Promoting Decent Work in Tonga
13
doc_662523253.pdf