Thursday, 5 June 2008

60,000 employees short-changed?

A rude shock of halved paid annual and casual leaves, reduced maternity leave and availability of provident fund and gratuity payment after only five years may hit around 60,000 employees in the private and corporate sectors (government owned too).

This is one of the main features of the draft section of the labour act being compiled by the ministry of labour and human resources, which may be completed towards the end of this year. Though the act was passed some details are being filled in.

Sources say that these employer-friendly regulations were included after hectic lobbying by a few powerful private sector companies in idea exchange sessions.

Ironically, many companies and government corporations, who had not asked for these tough regulations, may also have to go by the draft if the government agrees to it.

The draft rule states that 30 days of paid annual leave will become only 12 days, ten days of paid casual leave will become five and 10 days of sick leave will become five.

Pregnant mothers will now get around 1.5 months maternity leave, in place of the earlier three months leave, and she would get this leave for three births only.

Also, on the private sector complaint that employees were leaving companies for better offers, the draft law allows for companies to pay PF and gratuity only after five years of accumulation, as against the current one year. Even if an employee dies while in service, the minimal compensation of Nu 108, 000 will be subject to many checks like if the employee was following safety standards, for example.

On the employer-friendly regulations, the Director General of the labour ministry Pema Wangda said, “Since many private companies will be enforcing benefits like provident fund and paid leave for the first time, we need to protect them as well, otherwise it may become financially unviable.”

However, observers say that the measure intended to save costs for some private companies will backfire on employees of private companies and government corporations already receiving the benefits. A senior official in Bhutan Telecom said, “These measures, encouraged by some private companies, totally favour the employers and, though we may also save some money, the costs in terms of employee unrest, unattractive job package, attrition and massive loss in morale may greatly damage our company.” A Druk Air official said, “Just when we thought we solved the brain drain crisis after delicate negotiations, these laws will make matters worse, not only for pilots and engineers but the entire staff here.”

Pema Wangda clarified that companies and corporations were welcome to take the current rules as minimum standards and could be more generous if they chose.

However, a royal insurance corporation of Bhutan limited (RICB) official said, “Even if we wish to be more generous, our shareholders, who include private companies, may demand cuts in costs as per regulations if they’re unhappy with their returns.”

The Bhutan chamber of commerce and industry (BCCI) secretary, Phup Tshering, however, maintained, “Of what use are good labour laws if they can’t be implemented, so for enforcement to be effective the employers rights must be protected.”

Although the Labour Act was passed in February 2007, labour inspectors found that all corporations, both government and private, were still not following many of the Act’s defined regulations. These violations include no contracts between employer and employee, non submission of internal service rules to the ministry, probation of one year instead of six months and confusion on overtime payment. The corporations are Kuensel, Bhutan power corporation, Bhutan national bank, Tala hydroelectric project authority, BCCL, BFAL, STCBL, RICBL, Bhutan postal corporation, BDFCL and natural resources development corporation.

“We haven’t fined the corporations this time around but asked them to comply and, as soon as we get adequate resources, we’ll also check the private sector,” said Pema Wangda. The checks will start with bigger companies like Tashi, Singye and Lhaki.

The draft rules also allow for child labour between the ages of 12 to 17 limited to 29 professions in the hospitality and food sector, domestic help, baby sitting and light work like sewing, paper making and minor car repair. They will, however, not be allowed in 11 categories of hard labour in areas like construction, mining, cement, forestry, transport and etc.

One of the positive outcomes is the sexual harassment clause, which now has an additional fine of up to Nu 300,000 to be paid to the victim. This is in addition to a maximum sentence of one year and minimum of one month and a fine of Nu 300,000 to the court. An official said, “Any unwanted attention of a sexual nature through speech, writing, gesture and touch will fall under this category.”

The Act also allows the formation of workers associations but only in the company and no strikes and unions will be allowed, that would disturb the peace and security of the nation. With many people in Bhutan earning as low as Nu 900 a month, the minimum wage will be framed by a committee, that will look into affordability of the company, employee productivity, types of work and cost of living.

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