Proclaimed on 11 October 2019, the Mauritius Workers’ Rights Act 2019, with the exception of provisions of the Act pertaining to the introduction of a Portable Retirement Gratuity Fund, became effective as from 24 October 2019. The Workers’ Rights Act 2019 introduces some major changes to the employment regulatory framework in Mauritius.
Extended applicability of employment legislation
The Employment Rights Act 2008 was generally applicable to all workers drawing a monthly salary not exceeding MUR 30,000, except for some sections applicable to all employees, and subject to any provision to the contrary in any other enactment. Under the Workers’ Rights Act 2019, that threshold has now been increased to MUR 50,000.
The applicability of several sections of the Workers’ Rights Act 2019 are also extended to employees drawing a monthly basic salary above the threshold of MUR 50,000, such as those provisions relating to discrimination in employment, end of year bonus, maternity and paternity leave, juror’s leave, leave to participate in international sports events, termination of agreement and reduction in workforce, workfare programme fund, violence at work, and portable retirement gratuity fund.
The Act is however not applicable in respect of specific issues already covered in Remuneration Orders applicable to specific business sectors.
Stricter conditions on fixed term agreements
For workers who are not expatriates, a fixed term agreement is now only possible in respect of activities which are of a temporary, seasonal or project-related nature.
Changes in the computation of overtime pay
The Act introduces some changes in the calculation of overtime pay. Subject to any other enactment, where the worker is required to work on 6 days in a week, the normal working week consists of 8 hours on any 5 days of the week and 5 hours on any other day of the week. Where the worker is required to work 5 days in a week, the working week consists of 9 hours on any 5 days of the week.
Whereas previously overtime was, in general, payable after 90 hours’ work in a fortnight, under the Act, overtime becomes payable after normal day’s work in a day.
Previously, for work performed on public holidays, overtime was payable at the rate of 2. Under the new Act, overtime is payable at the rate of 2 during normal working hours and at the rate of 3 after normal working hours on public holidays.
Maximum working hours per day
The Act now prohibits workers, apart from those employed as carers for the sick and disabled, from being required to work for more than 12 hours per day, except in special circumstances.
Night shift allowance
A worker on a night shift is entitled to an allowance of 15% of his basic wage in addition to his normal day’s wage for work performed during the night shift. The night shift allowance is however not applicable to workers only working night time.
Workers performing piece or task work will be deemed to have performed a normal day’s / week’s work if the task is completed in fewer hours/ days.
A worker may request to work flexitime to care for his child under the age of 4 and the request has to be granted in the absence of reasonable business grounds (inability to reorganise work or detrimental impacts on quality or performance).
The Act introduces new categories of leave entitlements:
Special leave: After 12 months of continuous employment with the same employer, a worker is now entitled to special leave on full pay of 6 working days on his first marriage, 3 working days on the first marriage of his son or daughter, and 3 working days on the death of his spouse, child, father, mother, brother or sister.
Court attendance: Irrespective of length of service, a worker is entitled to leave to attend Court regarding any matter in which he is a party or in which he is a witness. The leave shall be with pay where the worker is attending Court as representative of the employer or on its behalf.
Vacation leave: A non-expatriate worker, who has remained in continuous employment with the same employer for a period of at least 5 consecutive years, is entitled to a vacation leave of 30 days with pay, whether taken consecutively or otherwise, for every period of 5 consecutive years. The computation of the period of 5 consecutive years, however, does not take into account any period of employment prior to 24 October 2019.
Adoption leave: After 12 months’ continuous employment, any female employee, irrespective of basic salary, is entitled to a 14 weeks’ adoption leave on full pay for adopting a child under 1 year.
Paternity leave: Entitlement to a paternity leave of 5 working days has now been extended to male employees in continuous employment for a period of less than 12 months. Previously, the entitlement to paternity leave was restricted to male employees in continuous employment for a period of at least 12 months. Male employees who reckon less than 12 months’ continuous employment are entitled to the leave without pay.
Juror’s leave: All employees irrespective of basic salary and length of service are entitled to leave with pay in order to attend service as juror under the Courts Act.
Leave to participate in international sports events: All employees irrespective of basic salary and length of service are to be granted leave with pay if participating in an international sport event to represent Mauritius.
End of year bonus
The Act extends entitlement to the statutory end-of-year bonus and brings changes to the way in which the bonus is computed.
Entitlement to end-of year bonus: Entitlement to the end of year bonus has now been extended to an employee who, during the course of the year, resigns after having been in continuous employment for at least 8 months, or is terminated for any reason.
Calculation of end-of-year bonus: The end of year bonus is now based on one twelfth of ‘earnings’ accrued during the calendar year, or on the last monthly (pro-rated) basic salary, whichever is higher.
Under the Act, ‘earnings’ is defined as including 1) basic salary 2) overtime payment 3) leaves payment 4) commission 5) any sum of money by whatever name called paid to an employee in respect of any work performed by him, and in addition to the basic wages agreed upon between him and the employer, and which is related to productivity 6) any allowance paid under any Remuneration Regulations or Wages Regulations.
Validity of compromise agreement
When a worker makes a compromise agreement with his employer in resolution of a dispute concerning his termination of employment or non-payment of wages, such an agreement will only be valid if the agreement has been vetted either by an independent law practitioner, or by a trade union official, or by an officer of the Ministry of Labour.
Notice of termination of employment
The length of notice to be given in order to terminate an employment agreement cannot be less than 30 days. An employment agreement cannot now provide for a notice period of less than 30 days.
Reduction of workforce
For employers with a minimum of 15 employees, or having an annual turnover of at least 25 million rupees, the Act imposes a duty on the employer to notify and negotiate with the recognised trade union or employees’ representatives prior to reducing the workforce.
In the absence of an agreement, prior authorisation of the Redundancy Board need to be sought. The Redundancy Board shall complete its proceedings within 30 days from the date of notification by the employer, with any extension to be agreed by the parties. It is not possible to terminate employment within 30 days from the date of notification to the Redundancy Board or such longer time as may be agreed. Where the employer acts in breach of those procedures, any reduction in the workforce shall be deemed unjustified.
Where the Redundancy Board finds that the reasons for the reduction of the workforce are unjustified, the employer shall pay to the employee severance allowance at the rate of 3 months’ remuneration per year of service or the Board may, with the consent of the worker, order the employer to reinstate the employee to his former employment.
Portable Retirement Gratuity Fund
The Portable Retirement Gratuity Fund (PRGF) is a fund which is established under the Workers’ Rights Act 2019 for the purpose of providing for the payment of a gratuity on the death or retirement of a worker, while recognizing the terms of service of the worker irrespective of the number of employers served. The provisions concerning the PRGF will become effective as from 1 January 2020. Payslips would need to indicate any contribution made by the employer to the Portable Retirement Gratuity Fund.
Remuneration, safety and welfare
An employer is jointly and severally liable with a job contractor for the payment and remuneration of the workers at his service but employed by the contractor. The employer is also jointly and severally liable in respect of the safety, health and welfare of those workers.
Where a claim of non-payment or short payment of wages is made to the Court, the Court may order an employer to pay interest at a rate not exceeding 12 per cent in a year on the amount of remuneration due from the date of non-payment or short payment to the date of payment.
On failure to pay remuneration due to a worker, a Protective Order may be issued against the employer and any bank or financial institution holding funds on behalf of the employer.
Wage Guarantee Fund
The Act establishes a Wage Guarantee Fund which will be used to pay remuneration due in insolvencies. A worker will be entitled up to a maximum of MUR 50,000 from the fund.
Violence at work
An employer is now vicariously liable for violence at work committed by a worker or any third party where the employer knew or should have known of the violence at work and failed to take any action to prevent or stop the violence. Employers are advised to permeate to all parties their responsibilities under the Act, as well as nurture and maintain a culture of respect within the workplace.
Possible exposure to public relations risk is a major consideration for many organisations offshoring their activities. The Act, by providing important advancement in the protection of workers’ rights, offers additional assurance against reputational risks and increases the attractiveness of Mauritius as a socially stable and low risk location for the offshoring of business processes.
The Act, by allowing employees to carry their pensions and retirement benefits to the next employer, would eliminate a major frictional impediment to the mobility of labour. Employers are advised to maintain competitive employment conditions and boost employees’ loyalty and engagement.
The Wage Guarantee Fund pays workers up to MUR 50,000 each in insolvencies. Those benefits, enjoyed by all workers, including migrant workers, would make a contribution towards peaceful industrial relations and make it easier to acquire human resources in specific sectors.
The Act institutes variations to the methods of calculating employees’ emoluments, as well as leave and statutory end of year bonus entitlements. Businesses are strongly advised to seek professional assistance in order to ensure that their payroll system is up-to-date, able to capture the required information, and is compliant with the law.
A portable retirement gratuity scheme will also come into operation as from 01 January 2020. Employers in Mauritius are urged to familiarise themselves with their responsibilities under the Act and seek appropriate professional guidance. Penalties apply in cases of incorrect or late contributions to the Portable Retirement Gratuity Fund, as well as failure to submit in time the appropriate statutory returns. More information about the Portable Retirement Gratuity Fund will be provided in a future article.
Businesses are also recommended to seek professional advice to ensure that their human capital policies are conducive to the achievement of medium and long term strategic objectives.
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Fred Yeung Sik Yuen CPA FCCA CGMA MBA
Published on 10 December 2019