Chaudhry slams govt’s low wage policy

  • 29th November 2006
  • 2006
  • // Display comment count + link

Labour Leader Mahendra Chaudhry has urged government to introduce a minimum national wage as the first step to alleviating poverty which now stands at 34.4% of the population.

Speaking during parliamentary debate on the Employment Relations Bill, Chaudhry claiming that more than half the population either lived in dire poverty or at risk of it, said abysmally low, or below bread line, wage rates were one of the root causes of poverty in Fiji.

“National data shows that close to 50% of workers in full time employment earn wages below the bread line – of this the majority – almost 70% – are women.

The average worker in Fiji earns about $5000 a year or less which works out at a miserable $80 – $100 a week; The poverty line has been calculated at about $155 a week for urban areas – the bald truth here is that the majority of our workers are earning less than poverty level wages.

If we are to fight poverty and ensure social justice, we must first tackle wage rates and ensure that workers receive above poverty level or survival wages,” he said.

Along with the introduction of a minimum national wage, Chaudhry called for a review of the FNPF contributions from the current 16c to 30c with workers and employers contributing 15c each.

The full text of the Labour Leader’s intervention is as follows:

  • “The Employment Relations Bill has been a long time coming and my Party welcomes its introduction. However, I wish to take the opportunity to air a few issues of concern regarding the plight of our workers – focussing mainly on aspects of worker exploitation and the adverse social consequences of this.

Mr Speaker, Sir, the rights of workers and trade unions are enshrined in the Bill of Rights of our Constitution.

Section 33 of the Constitution relates to workers rights and fair labour practices. With your indulgence, Sir, let me read out the relevant clauses of Section 33:

(1) Workers have the right to form and join trade unions, and employers have the right to form and join employers’ organisations.

(2) Workers and employers have the right to organise and bargain collectively

(3) Every person has the right to fair labour practices, including humane treatment and proper working conditions

Under the Constitution, therefore:

  •  workers are entitled to a just and fair pay and other fair labour practices
  •  they are entitled to form trade unions and to engage in collective bargaining. This ensures them the right to strike

It is a constitutional obligation on the part of government to ensure that workers are paid a just wage and enjoy decent, humane working environment and conditions of work.

Despite the existence of this provision, it is obvious that many of our workers, particularly those in the private sector in lower paid jobs, are not enjoying the benefits of this constitutional provision: ie. they do not receive fair pay for a fair days’ work.

Mr Speaker, poverty today stands at 34.4% of our population; to put it in another way, one in every three persons in Fiji lives in poverty. This, Sir, is a shocking indictment of government’s failure to ensure social justice.

Another 30-40% of our people live in conditions verging on poverty. One of the root causes of poverty in Fiji is abysmally low, or below bread line, wage rates.

National data shows that close to 50% of workers in full time employment earn wages below the bread line – of this the majority – almost 70% – are women.

The average worker in Fiji earns about $5000 a year or less which works out at a miserable $80 – $100 a week; The poverty line has been calculated at about $155 a week for urban areas – the bald truth here is that the majority of our workers are earning less than poverty level wages.

If we are to fight poverty and ensure social justice, we must first tackle wage rates and ensure that workers receive above poverty level or survival wages.

Our workers are forced to accept low pays because it is a case of either that or nothing. This is a long-standing argument pushed by a few unscrupulous employers and politicians who justify their anti worker policies by arguing that it is better to be paid little then getting no pay at all. In other words, they claim that half a loaf is better than none while they themselves have three loaves!

While they exploit the worker ruthlessly, many themselves enjoy all the trappings of wealth.

Such unscrupulous practices have reduced Fiji to a third world nation with deep incomes inequalities – the stark truth of this is evident in statistics that show that while the top 10% of the population receive more than 50% of all income, the bottom 10% receive only 1.8% of the national income. What gross economic inequity!

It is undeniable that the very people who cry wolf every time the notion of a national minimum wage rate is raised, are people who drive around in BMWs, live in palatial mansions and enjoy lavish lifestyles.

While I have no qualms about them enjoying their wealth, they must at least display some semblance of social conscience and treat their workers decently.

Besides, they are in violation of Article 23 of the Universal Declaration of Human Rights which states that every worker has the right to a

“just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity…”

Fiji is a signatory to the UN Declaration of Human Rights. We are duty-bound to ensure that wage rates are just and fair. I have maintained for a long time now that real wages in Fiji have fallen below 1970s rates. Indeed, official reports and statistics bear this out.

This has now been confirmed by the recently released publication by ECREA titled Just Wage for Fiji. This research is a highly damning indictment of our labour relations system that has failed to protect the interests of the worker. It shows that real wages in Fiji has declined below the 1970s Basic Needs Poverty Line.

The ECREA research found that the cost of bridging the poverty gap had risen markedly from 11% of the total wage bill in 1984, to 27% in 1989 and 32% in 1999. The largest proportion of these adjustments had to be made in the private sector, more particularly in the unorganised sector.

The worse offenders here are the manufacturing, wholesale, retail, hotels and the restaurants sectors, according to this research. Now, all of these sectors make substantial profits and can easily pay above poverty level wages.

Research also found that the hardest hit workers were those covered by the Wages Councils and I quote:

“…Wages Councils which have abjectly failed over the long term to protect the real incomes of the workers they cover. All the Wages Council rates have shown severe deteriorations in the real levels of wages rates to well below even the conservatively estimated Basic Needs Poverty Line by the end of the 1970s.”

This is the shocking state of things in Fiji today.

Mr. Speaker, Wages Councils were created to cover unorganised workers who were not represented by trade unions. It is clear that Wages Councils have failed to serve these unorganised workers who continue to be grossly exploited and under paid under the current system.

I must say that trade unions, those representing the private sector in particular, must take a fair share of the blame for the existing state of affairs. There is no room for complacency or apathy. Trade unions need to broaden their horizons and make every effort to embrace those unprotected workers who are receiving abysmal pays for long hours of tiring work.

Workers must be given the freedom to join the union of their choice and I welcome the provision in the Bill which now makes this possible, compared to the restriction which previously prevailed, barring workers from exercising their right to freedom of association.

I am told that the plight of shop assistants is quite appalling. They are generally subjected to gross exploitation, receive no overtime for working beyond their normal eight-hour shift, and are often required to work under rigid, inhumane conditions.

Sir, we are now approaching the festive season when our bigger retail shops will open longer hours but I am informed, there is no overtime payment for staff required to put in additional hours. Because jobs are so scarce to come by, workers are sent home if they dare to question exploitative work practices.

Mr Speaker, the Labour Ministry must become more vigilant in ensuring that fair Labour practices are followed at all times.

Furthermore, there is an urgent need for Fiji to set a national minimum wage rate that is above the poverty line. No one should be paid wages that is below survival rate.

Secondly, Wages Council rates should be raised gradually over a three-year time span to ensure that all rates are above the 1997 Basic Needs Poverty Line.

A low wage economy simply exacerbates social problems. While government has a constitutional obligation to ensure fair Labour practices are upheld, employers also have a social responsibility to treat their workers well and pay a fair wage.

The nation pays a social price for low paid workers in terms of increased poverty, escalating crime rate particularly burglary and robberies, mushrooming squatter settlements, high school drop out rates, child labour and child prostitution, to mention a few.

Our social statistics are a grim indicator of worker exploitation: more than half the population are either living in abject poverty or at risk of it! Some 90,000 of our poor are squatting in the Suva/Nausori corridor without basic amenities?

This situation is likely to get worse in the immediate future with the unilateral imposition by government of 15% VAT and increased Customs and Excise Duty on a wide range of essential household items. The increased taxes, coupled with astronomically high fuel prices will lead to escalating food prices, the cost of utilities and essential everyday items in the near future.

Those worse hit will be the poor and the vulnerable – their suffering and hardship will increase manifold through such insensitive government policies.

I must warn, Mr Speaker, that unless remedial action is taken soon to alleviate widespread social distress, Fiji will be heading for a social revolution. It behoves all of us to pause and ponder about the direction in which our nation is headed.

A minimum national wage for Fiji has been long overdue, and has now become imperative.

I believe it is also high time government reviewed FNPF contributions.

The rate of contribution has remained static at 16c per member for a very long time. It should be revised in line with inflation and adjusted to at least 15c each to be contributed by the employer and the employee – that is a total of 30c per member.

It is necessary to ensure that pensions are adequate to sustain a retired person in dignity in his/her old age, particularly in the absence of other social net. It should be remembered that the poor low paid worker does not accumulate much in FNPF savings.

On the whole, the Employment Relations Bill is a fairly progressive legislation to govern labour relations. But having enlightened legislation in place is one thing. It is just as important to ensure that legislation once in place, is enforced. We have a chronic problem in Fiji of legislation not being enforced, particularly in relation to the terms and conditions of workers.

It is also of concern that there is no set date on which the Act will come into affect. Furthermore, different provisions will come into effect on different dates, yet to be set. The worry here is that government could well keep
the Act from coming into effect by not setting dates.

Here also, corruption is at work with unscrupulous employers being able to buy the concurrence of officials from the Labour Ministry. We must clamp down on such corrupt practices.

Civil servants caught compromising their responsibilities in return for graft should be dealt with according to law.

The Ministry of Labour needs to supervise pay days by carrying out effective and regular random checks at work places to ensure that the pay packets workers receive correspond with what is registered in the books.

There has been a long standing tendency by past governments to push the interests of the entrepreneur and the business community ahead of the welfare of workers in this country.

Those who advocate such policies forget that a dissatisfied and unhealthy work force will be low on productivity, and will show very little commitment to, and initiative at, work.

Our workers, and I am talking particularly of those in the lower income brackets, have been exploited and neglected for too long.

They still work long hours for paltry pay. While the working environment has improved for many workers in the past decade or so, a lot more needs to be done in terms of improving working hours and pay levels.

A case in point is of security officers. A conversation with two security officers elicited the following information:

They work 12 hours a day and six days a week. There is no overtime pay for working beyond 8 hours, nor is there extra time for working the 6th day. They receive payment at the rate of $1.70 which comes to $20.40a week – well below the poverty line!

I must also make a point on workers’ right to strike. It is the arbitrary actions of employers that lead to lightening strikes. A case in point is the current strike at the EGM.
Why is there no provision to hold the employer accountable for such actions?

The proposed Employment Relations Bill sets up an Employment Relations Advisory Board to advice the Minister on employment related matters and to assist in the formulation of policies, regulations and guidelines.

I believe the Advisory Board ought to be replaced with a Tripartite Forum. The Forum should be given legal status, have its own secretariat, and be adequately funded and resourced to carry out its work effectively. It should have full autonomy to deal with industrial issues. On important issues it should be empowered to seek technical expertise.

Maternity rates

One of the most progressive aspects of the current Bill is the provision for full pay for female workers while on maternity leave. I know that there is opposition to this from certain employers as concerns from some quarters have already been expressed.

I believe, Mr Speaker that it is about time women were given this right and the recognition they deserve. They have for too long suffered discrimination on this score.

If I remember correctly a paltry sum of $5 a day was set in the 1980s as maternity allowance. This figure was never revised.

Employers and the economy will simply have to adjust to this requirement – a human rights provision. It is morally wrong to deny women maternity leave on full pay.

Indeed, my plea to the Minister and to the government is to ensure that this legislation once enacted, does not simply serve to decorate the bookshelves.

I hope it is rigidly enforced to ensure social justice and equity for all our workers. And that an effective monitoring machinery is put into place to ensure that the provisions of the legislation are being met. The Ministry must place special focus on the workings of the Wages Councils and to ensuring that employers meet their social obligations towards the workers.

The legislation should not simply serve, as it has done in the past, to keep a restraint on trade unions and their activities. It must be used to improve the lot of our lower paid workers.

Once again, I reiterate we need to introduce a minimum national wage rate; we need to revise the rate of FNPF contribution.

With those words, I support the Bill before the House.”