Know your Rights
A contract of employment may be made in any form, whether written or oral.
For contracts of employment for a fixed term exceeding 6 months, contracts shall be made written specifying:
- Names of the parties.
- Nature of employment.
- Amount and the mode of payment of remuneration.
- If appropriate, any other terms and conditions of employment including housing, rations, transport and repatriation.
Contracts of employment shall be exempt from stamp duty and any other taxes or levies.
- Remuneration shall be paid not later than 8 days after the end of the period to which it relates.
- Remuneration shall be paid at regular intervals not exceeding 15 days to every employee whose remuneration is calculated by the hour, the day of the week and monthly.
- In case of termination of contract, remuneration and allowances, including where appropriate, shall be paid as soon as the service has ceased.
Termination of Contract and Notices of Termination
- For contracts for a fixed period of time: the employment relationship terminates at the date specified in the contract (or on the completion of the piece of work specified therein).
Notice of termination is not required in this case.
- For contracts of employment for an unspecified period of time: the employment relationship shall terminate on the expiry of notice given by either party to the intention to terminate the contract. Notice of termination may be verbal or written. There is specific timing for giving notice of termination depending on the time of service.
- Less than 3 years of employment relationship: Notice of termination shall be given 3 months in advance.
- 3 years or more of employment relationship: Notice of termination shall be given 14 days in advance.
In case that the Notice of termination is not given in time, workers shall not be entitled to benefits as annual Leave, severance allowance.
Termination by Misconduct
- In the case of a serious misconduct by an employee, employer can dismiss the employee without notice and without compensation.
- The following acts do no constitute misconduct by an employee:
- Trade union membership or participation in trade union activities outside working hours, or with the employer's consent, during the working hours;
- Seeking office as an employees' representative;
- The making in good faith of a complaint or taking part in any proceedings against an employer.
- Dismissal for serious misconduct may take place only in cases where the employer cannot in good faith be expected to take any other course.
- No employer shall dismiss an employee on the ground of serious misconduct unless he has given the employee an adequate opportunity to answer any charges made against him and any dismissal in contravention of this subsection shall be deemed to be an unjustified dismissal.
- An employer shall be deemed to have waived his right to dismiss an employee for serious misconduct if such action has not been taken within a reasonable time after he has become aware of the serious misconduct.
Complaints and Dispute Settlement
Workers and employers can raise a complaint to the Department of Labour (Trade Disputes Act Chapter 162) in case of disputes within the workplace in search of a resolution.
The most common causes of employment complaints are: unpaid salaries, underpaid wages, unpaid maternity leave, termination of employment and severance allowance, serious misconducts, absences, sick leave, annual leave, notices, resignations, overtime, fix term contracts, and unspecified contracts, among others.
The Trade Disputes Act specifies the following process for employment dispute settlement:
- Employee or employer registers a complaint at the Department of Labour
- Commissioner of Labour appoints a conciliator to settle the dispute within 7 days. Notice of meeting is sent to the employer and employee to attend a round-table conciliation meeting.
- Department of Labour gives their opinion after the meeting.
- If the matter is closed both parties will be advised. If the matter cannot be resolved the matter is submitted to the Commissioner of Labour.
- The Commissioner of Labour then submits the matter to the Adjudicator at the Trade Disputes Tribunal.
- The Adjudicator must make an Award within 3 months of receiving the submission. (Amendment Order No. 49 of 2020 Section 12(1)).
- The Award of the Adjudicator is final. (Amendment Order No. 49 of 2020 Section 12(2)).
Liabilities for Offences
According to the Trade Disputes Act, the liabilities for employment offences can be:
- In the case of an individual – to a fine not exceeding VT 100,000 or imprisonment for a term not exceeding 3 years or to both.
- In the case of a corporate body - to a fine not exceeding VT 1,000,000.
Working Day and Overtime
- No employee shall be required to work more than 8 hours in any day (exclusive of the time allowed for meals and tea).
In a weekly basis, no employee shall be required to work more than 44 hours or 6 days in any week.
- Every employee who is at work for more than 6 consecutive hours on 1 day shall be granted a break of 1 hour for a meal and a tea break of 20 minutes or 2 tea breaks of 10 minutes each.
- Every employee shall be entitled to a weekly rest of 24 consecutive hours which shall normally fall on a Sunday except where another day has been fixed by agreement between employee and employer or in any trades where it is usual to take another day.
In respect of work carried out in excess of the normal weekly hours of work, an employee shall be paid overtime at the following rates:
- For the first 4 hours: at a minimum rate equal to one-and-a-quarter times the normal hourly rate; (125%)
- In excess of 4 hours: at a minimum rate equal to one-and-a-half times the normal hourly rate; (150%)
If total weekly hours are less than 44 normal weekly hours then it will not be included in the calculation for overtime.
- Example 1: Overtime calculation for 52 hours worked in a week (44 hours plus 8 extra time hours) at a salary of the minimum wage rate.
Hourly salary: VT 220
Weekly salary (44 normal hours): 44 x VT 220 = VT 9,680
Extra time salary (8 extra time hours)
Four hours at a 125% rate: 4 x VT 220 x 125% = VT 1,100
Four hours at a 150% rate: 4 x VT 220 x 150% = VT 1,320
Total weekly salary (44 hours plus 8 extra time hours) = VT 12,100
- Example 2: A worker receiving his salary in a fortnight basis (VT 30,000) worked 9 extra hours in each of the weeks.
Weekly salary (44 normal hours): VT 30,000 / 2 = VT 15,000
Hourly salary: VT 340.91
Extra time salary per week (9 extra time hours per week)
Four hours at a 125% rate: 4 x VT 340.91 x 125% = VT 1,704.54
Four hours at a 150% rate: 5 x VT 340.91 x 150% = VT 2,556.82
Total weekly salary (44 hours plus 9 extra time hours) = VT 19,261.36
Total fortnight salary = 38,522.71 ≈ VT 38,525
The Employment Act Cap 160 specifies that no employee shall be required to work on a Sunday or public holiday. In case that work is necessary, an overtime rate must be paid to the employee.
The overtime rate is equal to one-and-a-half times the normal hourly rate. Example:
VT 220 x 4 hours x 1.5 = VT 1,320
These provisions shall not apply to employees employed in Essential Services:
- Transport of passengers, goods by road, sea or air
- Businesses handling passengers or goods at docks, quays, wharves, warehouses or airports
- Public Utility - Water Supply, Gas stations, Electricity, Telecommunication etc.
- Hotel, guest houses, bars, restaurant, clubs etc.
- Theatres and Place of Public amusement
- Hospitals, clinics and business operating for the sale of any drugs or medicines
- Radio broadcasting, Newspaper, & Television broadcasting
- Animal husbandry – Livestock
- Businesses selling bread, butter, fresh milk, fresh meat, fresh fish and ice not later than noon.
An employee working on a Sunday or public holiday shall be granted an equivalent period of time off work on another day.
Calculations of Employment Entitlements (Annual Leave, Sick Leave, Maternity Leave, Severance Allowance)
Employment Act Cap 160 specifies that the number of days per year that an employee entitles by years of service:
- For workers on employment during 6 years or less, employee is entitled to 15 days of leave, pay in full.
- For workers on employment for 7 years to 19 years, the employee is entitled to 21 working days of leave, pay in full.
- After 20 years on employment workers are entitled to 23 days of leave. After 25 years on employment workers are entitled to 25 days of leave. After 30 years on employment workers are entitled to 27 days of leave. All of them, pay in full.
The annual leave shall be taken in one period or if the employer and the employee so agree, in not more than 2 separate periods.
If a contract of employment terminates before the employee has acquired entitlement to annual leave, an allowance calculated on the basis of the normal salary paid shall be paid in the place of leave.
Employment Act Cap 160 specifies that every employee who has been in continuous employment with the same employer for more than 3 months shall be entitled to 21 working days leave per annum on full pay on grounds of illness.
This means that, in case of illness, up to 21 days of absence per year shall not be discounted from the salary as long as workers present a medical certificate.
If you become pregnant while you are in employment, you have the right to take 12 weeks maternity leave at a rate of 66% of the normal salary rate.
Out of these 12 weeks, six weeks leave is post-natal leave.
Example 1: Maternity leave calculation for salaries paid in a monthly basis
Monthly salary: VT 38,720
Maternity Leave Rate: VT 38,720 x 66% = 25,555VT
Example 2: Maternity leave calculation for salaries paid in a fortnightly basis
Fortnightly salary: VT 19,360 (10 days salary)
Maternity Leave Rate: VT 19,360 x 66% = VT 12,777 ≈ VT 12,780
Example 3: Maternity leave calculation for salaries paid in a weekly basis
Weekly salary: VT 9,680
Maternity Leave Rate: VT 9,680x 66% = VT 6,388 ≈ VT 6,390
Employment Act Cap 160 specifies that every employee who has been in continuous employment during 12 consecutive months shall receive a severance payment equivalent to 1 month wage per year of service on the termination of the Employment.
Example 1: Severance allowance calculation for a worker with a salary of VT 720,000 per year after 4 years and a half of service
Monthly salary: VT 60,000
Number of completed years of service: 4
Severance allowance: VT 60,000 x 4 = VT 240,000
Example 2: Severance allowance calculation for a worker with a contract for 3 months at a total wage rate of VT 150,000.
As the worker did not complete a full year of service, there is no entitlement to severance allowance.
Example 3: Severance allowance calculation for a worker with three consecutive contracts for 6 months at a total wage rate of VT 300,000.
Monthly salary: VT 50,000
Number of completed years of service (under fixed contracts of 6 months): 1.5
Severance allowance: VT 50,000 x 1.5 = VT 75,000
Safety and Health in the Workplace
The Occupational Safety and Health Act specifies that it is the responsibility of the employer to always keep the workplace safe and healthy. Also, employees have a duty to look after themselves in the workplace.
Some specific regulations can be consulted in the links below:
- There is no fresh air
- The lights are not bright enough
- It is either too cold or too hot
- There is unclean unhealthy air, poisonous gas, dirty water and other materials or liquids that are dangerous to the human body.
- There is no First-Aid Kit and no Fire Extinguisher
In regards to employees/workers in restaurant areas working with food. Employees must wear head caps to cover their heads and wear plastic hand gloves when handling foods. Toilets must be kept clean always.
- Safety shoes (to protect their feet)
- Overall (protect their bodies)
- Hand gloves (to protect their fingers)
- Helmet (to protect their heads)
- Eye Muffs (to protect the ears)
- Eye goggles (to protect the eyes)
- Workers must make a report to the Health & Safety Unit at the Department of Labour in case of any problem of Health and Safety in the workplace.
- The Labour Department of Labour investigate your complaint/report.
- If the Labour inspector agrees that there is a big problem the Labour Department will issue an IMPROVEMENT NOTICE to the Employer. This Notice is requesting your employer to sort out the issue.
- If the Labour inspector views that there can be an accident by the worker the Labour Department will issue a PROHIBITION NOTICE to the employer. This Notice orders the employer to stop work until the problem is solved.
- Any employer refusing to follow the Occupational Health and Safety (OHS) regulations will be fined at the sum of 100,000Vt under Section 19 of the OHS Act.
- Employees must report the matter to the Department of Labour.
- Employees have the right to request the employer to refund or pay back all the money that employee has used to pay for his/her injuries.
- The employer shall pay compensation to the employee/worker because the injury stopped the employee from being able to continue work and it has affected the employee and his/her family.
- Employees shall make a claim for compensation against employer through the Office of the Public Solicitor or a private Lawyer and Department of Labour.
All employees in Vanuatu between the ages of 14 and 55 must join the Vanuatu National Provident Fund. Membership is compulsory (VNPF Act [CAP 189.]). However, those whose monthly earnings are less than VT 3,000 as well as those who are specifically exempt need not contribute to the Fund.
Employers must assist employees to register with the Fund within 14 days of employment. Employers must assist their employees to collect the forms at VNPF Office or write to VNPF and ask for the employee registration form for membership.
The purpose of the VNPF membership is to provide workers with the opportunity to ensure future financial security for themselves and for their families. In case of retirement, death, permanent disability your savings will be there for you and your family.
All Members must pay a minimum of 4% of their gross earnings per month. Employers also contribute on behalf of the contributing Member the same percentage of the gross earnings. Therefore, the total savings will be 8% of member's earnings.
Severance pay, gratuity payments (due under terms of employment), and Housing Allowance, reimbursement of monies spent on behalf of the Employer does not form part of the gross remuneration.
This constitutes a breach of the VNPF Act, regulations & orders. If this happens, contact VNPF immediately to notify about this situation.
If the employer has ceased operations, the employer must inform the Fund of this so that the employer will be removed from the records of the Fund and contribution schedule will not be sent.