Cushioning the Impact of Employment Law

When the Employment Act came into force on 10 July this year – 45 days after ratification – it created havoc in workplaces across the country. Government budgets ran out of money and supervisors were overwhelmed with sick leave notices. This lead some people to believe the Act is unsuited for the Maldives, especially when applied to tourist resorts, industrial sites and shift duty stations. Others however pointed out that the 48-hour work week stipulated in the Act is the norm in the European Union, and if that norm can be implemented in hotels and factories in EU, there should be no reason it cannot be applied in the Maldives.

At first tourist resorts were not included in the Act, but were later included following agitation by resort employees spearheaded by TEAM. Now resort managements are coming under increasing pressure to implement the provisions of the Act fully. But many people –not just resort owners –believe there are serious controversies in the Act, particularly when implemented overnight without sufficient preparation in resorts and industrial sites.

Some people believe the employment law was basically drafted with the working conditions of civil servants (government office staff) in mind. Apart from the budget shortage (which could have been avoided if implementation was delayed till January) the law can be applied to civil servants with no major problems, they believe. The question is, were the working arrangements in tourist resorts and shift duty stations studied sufficiently before the law was implemented?

Are you shocked to learn that you will need to employ 7 people to keep just one person on duty in a 3 shift duty system, if each employee avails all the rights stipulated in the Law –maximum working hours, rest days, sick leave and holidays? If one is shocked by this statistic one needs to study the law carefully. Employees of course deserve all these rights and more. However, one must also realize that tourist resorts have been operating under various systems of employment for decades. Thus, there is an existing baseline. Shifting from this baseline to the level required by the law would need careful planning.

Tourism, together with fish processing plants, forms the back bone of the economy. We need to make sure sufficient and efficient labor is available for these growing sectors of our economy. A competitive labor market is absolutely essential to ensure that we attract foreign investment for the tourist industry. While the human rights record of China is far from ideal, there may be a few things we can learn from their experience in managing their labor force and succeeding in producing committed workers.

[This article is based on ideas submitted by Mohamed Shiham, an employee of a 5 star resort in the Maldives.]

Tourism employees strike: Why their voice must be heard

Are the authorities taking the planned tourism employees strike seriously? After all, if the strike goes ahead on October 5^th, it could cripple the industry and result in losses running into millions of dollars.

According to Tourism Employees Association of Maldives (TEAM) they are demanding the rights of employees guaranteed in the recently passed Employment Law. Currently Article 34 of the Law excludes them.
TEAM says they have already given 100 days notice to the government and are still willing to call off the strike if measures are taken to amend the law. Failing that TEAM says 70% of resort employees will stop work come October 5^th.

The percentage of foreign employees joining the strike may be lower than that figure, TEAM says. This is because they have no job security and can be deported by employers at will. This revelation speaks volumes about the working conditions in what resort owners would like to call a world class industry.

Maldives has a total of 110,231 employees (Statistical Yearbook 2007). Out of them the largest category in formal employment comprises the roughly 40,000 government employees. The second largest category is that of tourism employees (totaling 12,090). A large percent of those in other categories are either self employed or have informal arrangements with their bosses. Realistically speaking therefore, the Law cannot be applied to them. So the very purpose of the law comes into question if tourism workers are excluded from its purview.

What do the 12,000 odd tourism employees get from the industry? Assuming an average monthly salary of Rf 4000, the total annual wage bill would be Rf 580 million. Compared to this the GDP from tourism at market prices is Rf 3.7 billion (calculated from the figure of Rf 2.789 billion given as tourism GDP at basic price –Yearbook 2007). So the employees' share of the GDP from tourism is 16%.

Exclusion from the Employment Law deprives resort workers of their basic rights guaranteed under the law: minimum wage, overtime, maximum working hours, job security, leave, etc. So why were they excluded? This may have something to do with the presence of a large number of Members in the Majlis who have direct interests in the tourist industry. The original bill presented to the Majlis did not exclude tourism workers, but at some stage in the Majlis debate the relevant clause appeared in the draft and was passed.

Maldives Association of Tourism Industry (MATI) is quite effective in protecting resort owners. Who will protect the resort employees?