May 29, 2006

No consensus on redundancy pay

The Labour Consultative Commission (CCT), the tripartite negotiating forum between the Mozambican government, the trade unions, and the employers' associations, has again failed to reach consensus over key clauses in a future labour law. The sticking point is, as it has been right from the start, the question of redundancy pay. When the employers call for a "more flexible" labour law, what they mean is a law that will make it easier and less expensive to sack workers. The unions have resisted attempts to reduce dramatically the minimum redundancy pay to which workers are entitled.

Under the current labour law, redundancy pay for anyone who has worked in a company for over three years is three months wages for every two years or fraction of two years worked.
Coming out of the meeting, union spokesperson Samuel Matsinhe said the unions' current position was that, in straightforward cases of dismissal, workers should be entitled to redundancy pay equivalent to 60 days wages for each year of employment - but if the company laid them off for "structural or market reasons", this pay could be cut to 30 days a year.

The employers, however, want to cut redundancy pay to 15 days wages for the first year worked, and seven days for each subsequent year. The unions reject this, pointed out that a company which sacks workers because changing technology means it needs fewer people cannot be considered on the verge of bankruptcy. Agreement was reached on the issue of recruiting foreign workers. The new bill will stipulate that small companies (employing up to 10 workers) may hire 10 per cent of their workforce (i.e. one person) from abroad, without requesting Labour Ministry authorisation. The figure falls to eight per cent for medium firms (10 to 100 workers) and five per cent for large companies (over 100 workers). This replaces a proposal that all companies should be able to hire foreigners accounting for up to 12 per cent of their workforce automatically. Speaking at the end of the meeting, Labour Minister Helena Taipo said what was intended was to draft a flexible law that would promote employment, and she thought this goal had been achieved. She claimed to be satisfied "because the partners in the CCT have understood that national interests are above individual interests. This enabled us to achieve consensus on all other articles in the draft". The new law, she added, would force unions to organise themselves better, and the government to speed up reforms to correspond to the demands of the market. Employers should opt for "balanced management" and dialogue with the unions.

The bill now goes to the government, which will have to take a decision on he redundancy pay issue. The bill will then be sent on to the country's parliament, the Assembly of the Republic, which will have to pass it in the October-December sitting, if it is to take effect in 2007. The parliamentarians will not necessarily rubber-stamp whatever the government sends them, and it is very likely that the question of redundancy pay will be debated on the floor of the Assembly. (Agencia de Informacao de Mocambique, Maputo)

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