SPEECH - WORKSHOP AT MEF

I am very pleased to be among you today on the occasion of the opening of this Workshop organised by the Mauritius Employers’ Federation.
I would like, at the very outset, to express my appreciation to Mauritius Employers’ Federation for taking the initiative of organising frequent workshops on diverse themes and issues of direct relevance to the world of work. Today’s workshop which focuses on Performance Linked Wage System will hopefully provide the opportunity to participants to better understand the pros and cons of Performance –related-pay in the context of the overall common objective of gaining and sustaining competitive advantage in period of economic uncertainty.
Ladies and gentlemen,
Competition and competitiveness of countries and enterprises have emerged as key issues as a result of not only globalisation, but also in the context of present economic challenges. And improving productivity and maximising the use of human resources, in most countries without exception, have become the reference point for the competitiveness of enterprises and long-term strategy for governments as well as managements of enterprises.
In their quests for achieving the goals with regards to competiveness and productivity, governments as well as enterprises have, over the years, initiated timely reforms in the pay system. Performance related pay has traditionally existed since long in the private sector with respect to specific jobs and tasks, particularly in the manufacturing sector, in the sugar industry and the construction sector.
Pay-for-performance in the corporate world, driven by companies in their search for competitive advantage, has contributed significantly to the pressure on government to reinvent people management practices. Likewise, many developed countries have introduced Performance Related Elements in their reward systems in one way or another. In Australia, flexibility in pay system is regarded as a catalyst for productivity improvement and work place reform. In Canada, Performance Related Pay Elements have been introduced for most levels of management. In Germany, government has committed itself to its introduction. In Netherlands, New Zealand and Sweden, just to name a few, provisions to include performance related pay elements in the Civil Service are already in place. U.K and Singapore are implementing Performance Related Schemes based on a system of Performance tranches and linked to individual performance. “Performance Tranches” refers to the classification of employees into say three groups – the best performers, the average performers and the least effective performers.
In Mauritius, as you may all know, Performance Related Reward is present mostly in private sector organisations, and a few state owned companies. In the public sector, however, the Pay Research Bureau has come up with some Performance Related Schemes and relevant recommendations as to their implementation through a Performance Management System. For a long time, Mauritius has had a traditional Civil Service pay structure and there was a strong apprehension about introducing performance pay too early in this sector. That’s why, in the context of public sector reforms, this is being carried out on a pilot basis, in phases with mechanisms for examining, approving, controlling, and monitoring its implementation integrated within a proper performance management and appraisal system.
What do we understand by performance related pay? Generally, performance related pay is used to reward employees on an individual and team basis. It is used in parts of both the public and private sectors where it is often perceived to be a way of giving an incentive to those at the top of their pay band or as a means of rewarding employees through the pay system. Pay increases are thus generally linked to individual or team performance measured against targets or objective criteria.
What is the rationale behind introducing a Performance Linked Pay System? Generally, many advantages are claimed for performance-related pay, though its primary purpose in any organisation is to recruit, retain and motivate the workforce. It is believed that high quality workers are attracted to an organisation where they believe their ability will be rewarded, while the current workforce is given the message that good performers are valued and that poor performers are not. The prospect of earning more money is assumed to motivate workers to work harder and more effectively.
There are additional aims, one of which is to make employees more aware of or more committed to certain organisational goals. When employees learn that certain skills or specific behaviour are rewarded in a performance-related pay system, they also learn what it is that their employer considers important.
Studies in various quarters have indentified other objectives of performance-related pay. These are, amongst others: making managers responsible for taking decisions, and giving them greater flexibility;giving better value for money;
encouraging greater accountability; strengthening the relationship between individual job goals and organisational goals; enhancing job satisfaction.
However, it is also important to know the other side of the story. For example, research conducted by the London School of Economics suggests that financial incentives derived from Performance Related Pay Systems may indeed reduce an employee’s natural inclination to complete tasks and derive pleasure from doing so. In fact, performance related pay provision could result in a net reduction of motivation across a team or organisation and therefore can impact negatively on overall performance.
There may be disputes about how performance is measured and whether an employee has done enough to be rewarded. Some might argue that rewarding employees individually does very little to encourage teamwork, and that performance related system may encourage unhealthy rivalry between managers.
It can therefore also be concluded that the ethos of paying for performance can be accepted in some organisations for specific job categories, whereas in others, it can simply be resented.
I would therefore suggest employers to be cautious with regards to the introduction of performance-linked-wage system, particularly if such a system does not exist in the enterprise concerned. The introduction of such a system should first imperatively be the subject of discussions and consultation with the workers as well as their representatives and trade union organisations. Employers who envisage to introduce Performance-Linked Pay System, must do so in full respect to the true spirit and principles of Collective-Bargaining.
While implementing a Performance-linked wage system, enterprises should also ensure that there are no departures from the principle of Equal Pay for Work of Equal Value. Allow me to add this is enshrined in our laws, in section 20 of the Employment Rights Act. Transparency is also a key feature, because employees need to understand why they are paid as they are. Workers with performance-related pay expect to have convincing reasons as to why some employees get more than others, and will want clear guidelines as to how they too can earn more money.
Employees are the driving force behind the success of every enterprise. In order to survive in today’s challenging business environment, it is important and crucial to reflect on how to prepare human resource responses to these challenges. Our future depends on technologies, changes, innovation, training and productivity improvement so that we may sharpen our competitive edge. Our future depends on skills, competence, and knowledge management since there is a need to upgrade the quality of our products and services to further increase our market share. And above all, we need to develop a productivity culture and also the need to change our work attitude and mindset.
We are conscious that increase in productivity and competitiveness can only be brought about and sustained through major reforms to the labour market and wage policy. In the past, inflexible labour market regulations have separated wage developments from productivity changes, and affected risk-taking and innovations in the productive sectors.
In line with government’s commitment to labour market reforms, and market flexibility, we have introduced with effect from 2nd February this year, the new labour legislation, namely the Employment Relations Act and the Employment Rights Act with a view to removing the existing rigidities as well as to better addressing the interests of both workers and investors as well.
The new labour legislation, particularly the Employment Relations Act provides for the necessary tools for the promotion and practice of Collective-Bargaining on general terms and conditions of Employment, including payment systems.
According to the Code of Practice, Section 53 to 56, of the Employment Relations Act, Payment Systems vary according to the nature and organisation of the work, local conditions and other related factors. Payment system shall be based, wherever applicable, on some form of work measurement under which payment systems must be jointly negotiated where trade unions have negotiating rights.
The Code of Practice of the Employment Relations Act further states that differences in remuneration shall be related to the requirements of the job, which shall, whenever possible, be assessed in a rational and systematic way in consultation with the trade unions concerned. It is also emphasised that Payment Systems shall be periodically reviewed to make sure that they suit current circumstances and to take account of any substantial changes in the organisation of work or the requirements of the job.
Before concluding, I’ll take this opportunity to add that I welcome the tripartite meeting as announced in the budget speech yesterday, as this will give us the possibility to solve the issue of the absence of the trade unionists on the National Pay Council. I deem this a very good thing.
I wish to congratulate again the MEF for holding this workshop on such an important subject as “Performance Linked Wage System”. To the workshop participants, I can say that you are all lucky to have two experts of very high calibre as resource persons; namely Mr M. Vivekanandan from Malaysian Employers Federation and Mr Hezron Njugana from the International Labour Organisation. I would, therefore, urge you to make the most of this opportunity with a view to further strengthen your knowledge on this subject.

MINISTER CHAUMIERE WELCOMES THE FORTHCOMING TRIPARTITE MEETING, AS ANNOUNCED IN THE BUDGET SPEECH.

The Minister of Labour, Industrial Relations and Employment, Hon. Jean-Francois Chaumière launched a workshop on Performance Linked Wage System at the MEF-MCCI Building in Ebène this morning.

In his address, Minister Chaumière spoke of the various countries who have adopted this kind of system, and of the challenges and drawbacks associated therewith. With regards to the situation in Mauritius, the minister said: “the ethos of paying for performance can be accepted in some organisations for specific job categories, whereas in others, it can simply be resented.I would therefore suggest employers to be cautious with regards to the introduction of performance-linked-wage system, particularly if such a system does not exist in the enterprise concerned. The introduction of such a system should first imperatively be the subject of discussions and consultation with the workers as well as their representatives and trade union organisations. Employers who envisage to introduce Performance-Linked Pay System, must do so in full respect to the true spirit and principles of Collective-Bargaining. While implementing a Performance-linked wage system, enterprises should also ensure that there are no departures from the principle of Equal Pay for Work of Equal Value. Allow me to add this is enshrined in our laws, in section 20 of the Employment Rights Act.”

The Minister also expressed his satisfaction at the forthcoming tripartite meeting, as announced by the Vice Prime Minister and Minister of Finance Dr. Rama Sithanen in the budget speech yesterday. “This should help resolve the issue of the absence of trade unions on the National Pay Council, as is presently the case”, he commented.

The MEF workshop spans over two days. The main resource persons are: Mr. Hezron Njuguna, Senior Specialist in Employers’ Activities from ILO Addis Abeba and Mr. Maroly Vivekanandan, General Manager of the Malaysian Employers’ Federation.

RENCONTRE ENTRE LE MINISTRE CHAUMIÈRE ET LES REPRESENTANTS DU BUREAU INTERNATIONAL DU TRAVAIL (BIT)

Le ministre Jean-François Chaumière a rencontré ce matin lundi 16 novembre 2009 deux représentants de la Branche Régionale pour Madagascar du Bureau International du Travail. Ils sont Christian Ntsay (Director) et Nombana Razafinisoa (Programme Officer). Une rencontre qui s’est déroulée en présence du chef de cabinet du Ministère du Travail, de l’Emploi et des Relations Industrielles, Madame V.L. Ramsamy.

Au menu des discussions : la tenue prochaine d’un atelier tripartite se rapportant au lancement du National Tripartite Forum. Ce forum sera appelé à être l’instance regroupant les partenaires du monde du travail. Il doit être lancé au début du mois de décembre. Un lancement qui se fera conjointement avec le BIT. Il est à noter que Me. Charles Dan, directeur général du BIT pour la région Afrique fera le déplacement à Maurice pour cette occasion.

Il a aussi été question, lors de cette rencontre, de l’ébauche du Decent Work Country Programme, qui soulignons-le, a été confié à une consultante, Mme. Esther Hanoomanjee. Ce document fait encore l’objet de consultations entre les parties concernées : le patronnat, le syndicat et des officiels du gouvernement. Le Decent Work Country Programme est appelé à être un document de référence dans les années à venir dans le domaine du droit du travail à Maurice et sera plébiscité au plus haut niveau par le Bureau International du Travail.

Le BIT s’associera d’autre part à l’Université de Maurice et QUATRAIN AFRICA pour le lancement d’un Executive Masters Programme in Social Security Financing.

Outre l’Honorable Jean-François Chaumière, les représentants du BIT se sont entretenus avec d’autres membres du gouvernement, des représentants du secteur privé, des syndicats et de l’Université de Maurice entre autres.

MINISTER CHAUMIERE TO RENEW TUTF BOARD

The Minister of Labour, Industrial Relations and Employment, Honourable Jean-Francois Chaumière holds a meeting today, Thursday 12 November 2009 at 11 a.m. with the Board of Trustees of the Trade Union Trust Fund. The Minister will announce in the coming weeks the composition of the new board of the TUTF.

The TUTF Board of Trustees has not been reconstituted in 2007 and 2008 as a result of extraneous use of funds allocated to the Fund. Government had then set up a committee to look into the proposals to review the TUTF Act and to better manage the Fund. The committee, chaired by Mr. Neerujun, Director of the Labour and Industrial Relations Division of the Ministry, has completed its exercise and submitted a report in October 2008. The committee has made some proposals for the amendment of the TUTF Act. Another committee has been instituted to study these proposed amendments and is yet to make recommendations.

The TUTF is a corporate body established under the Trade Union Trust Fund Act of 1997. Its objects are, inter alia, to receive and to manage funds and other property obtained from the Government and other sources and to provide assistance to workers’ organizations.

The Fund is managed and administered by a Board of Trustees appointed by the Minister of Labour, Industrial Relations and Employment, consisting of: 8 representatives of workers’ organizations and six representatives from the ministries of Labour and Industrial Relations, Finance, Education, Civil Service Affairs, Reform Institutions, Women, Family and Child Development, as well as an independent person appointed by the Minister.

The office bearers as from 01 September 2008 are:

(a) President: Mr. Deepak Benydin – Fédération des Syndicats des Corps Constitués
(b) Secretary : Mr. Giandeo Peeharry – Federation of Progressive Unions
(c) Treasurer: Mr. Pradeo Buldee – Mauritius Trade Union Congress
(d) Member: Mr. Serge Jauffret – General Workers Federation
(e) Member: Mr. Radhakrishna Sadien – State Employees Federation
(f) Member: Mr. Yusuf Sooklall – Free Democratic Union Federation
(g) Member: Mr. Cassam Kurreeman – Mauritius Labour Congress
(h) Member: Mr. G.T. Jadunundun – Federation of Civil Service & Other Unions

MINISTER CHAUMIERE ANNOUNCES JOB CONTRACTORS HAVE TO BE COMPLIANT TO OCCUPATIONAL SAFETY AND HEALTH ACT 2005.

The Minister of Labour, Industrial Relations and Employment, Honourable Jean Francois Chaumière announced today that Job Contractors of the construction industry will soon be required to comply to provisions under the Occupational Safety and Health Act (2005), namely:

• Risk assessment
• A record of risk assessment if there are more than five employees
• A safety policy for those having more than 50 employees
• A Safety and Health Officer if there are more than 100 employees
• The examination of machinery & equipment (lift, crane etc)

It is to be noted that the Job Contractors will also be given a list of notifiable accidents.

The number of Job Contractors registered at the Ministry of Labour, Industrial Relations and Employment was of 2 382 as of October 2009, that is 517 more than at the same period last year (October 2008). This boom in the number of companies requesting a Job Contractors Permit has been the primary motive for this decision, as Minister Chaumiere stated today that a worker’s life is a human life. No risk as to the health and safety of workers will be tolerated by the authorities, the minister said. He was speaking today, Monday 09 November, 2009 at the launch of a 3-day workshop at the IVTB entitled “Design, Erection, Use and Dismantling of Scaffolding” at the Sir Kher Jagatsing Training Centre of the IVTB in Beau Bassin.

UN HUMAN DEVELOPMENT REPORT LAUNCHED BY JF CHAUMIERE

The Minister of Labour, Industrial Relations and Employment, the Honourable Jean Francois Chaumière launched the Human Development Report of the UNDP on Thursday 05 November, 2009, at Le Labourdonnais Hotel in Port Louis. The UNDP Human Development report was launched in presence of the UNDP resident representative Mrs. Asha Kannan.


In his address, Minister Chaumière re-iterated the government’s endeavour in the field of circular migration, particularly in countries like France, China and Canada. “Mauritius,” the minister said, “became a member of the International Organisation for Migration (IOM) in 2006. In collaboration with the IOM, the government is presently implementing a Circular Migration Project which aims at identifying employment opportunities abroad, and training Mauritians in the skills required to facilitate their placement in these jobs.”

Furthermore, the minister announced that the Ministry was finalizing the Occupational Safety and Health regulations respective of the accommodation of migrant workers in Mauritius, stating that “Mauritius has not only reformed its labour and employment laws and other related legislation, but has also taken an array of measures with a view to better protect migrant workers in our territory. In this context, we are also finalising the Occupational Safety & Health (Employees Lodging Accommodation) Regulations – to provide better accommodation for migrant workers.”

JEAN-FRANCOIS CHAUMIERE RENCONTRE LES PARTENAIRES DE L'INDUSTRIE SUCRIER

Le Ministre Chaumière œuvre pour un rapprochement de la MSPA et du Joint Negotiating Panel de l’Industrie Sucrière, mais reste contre la démarche de grève.

Le Ministre du Travail, des Relations Industrielles et de l’Emploi, l’Honorable Jean-François Chaumière a rencontré les dirigeants de la Mauritius Sugar Producers Association (MSPA) ce mercredi, et ce à leur demande. Il a également rencontré les représentants du Joint Negotiating Panel (JNP) de l’Industrie Sucrière qui regroupe cinq fédérations syndicales en vue de négociations salariales avec la MSPA.

Dans sa rencontre avec la MSPA, Jean-Francois Chaumière a fait état des mécanismes disponibles au niveau du ministère du travail pour aider les deux parties dans leur processus de dialogue.

Pour ce qu’il est de la rencontre avec la JNP, le ministre a été informé des trois points sur lesquels le JNP insiste pour être en mesure de poursuivre les négociations, notamment l’accès à l’information, les ‘awards’ acquis et le respect des protocoles d’accords (procedural agreements).

Dans un point de presse à l’issue de ces deux rencontres, le ministre Chaumière a réitéré son appel pour la poursuite du dialogue entre les deux parties et a affirmé que la grève ne serait pas la solution. Il a appelé à ce que les deux parties aient recours à toutes les institutions et les dispositions légales en vue de trouver un terrain d’entente dans ce litige.

CIEL CHAIRMAN MANUFACTURING EXCELLENCE AWARD

Le ministre Jean François Chaumière – invité au Chairman’s Award for Manufacturing Excellence du groupe CIEL Textiles
Le ministre du travail, des relations industrielles et de l’emploi, l’Honorable Jean François Chaumière était l’invité d’honneur au Chairman’s Award for Manufacturing Excellence du groupe CIEL Textiles samedi 10 Octobre, au Cyber Tower 1 d’Ebène. Evènement annuel organisé par le groupe CIEL pour récompenser les employés les plus performants de son secteur manufacturier.
Cérémonie en présence du président du groupe CIEL Arnaud Dalais, de son CEO Harold Mayer, de son excellence l’Ambassadeur de Madagascar Bruno Ranarivelo et de plusieurs centaines d’employés des différentes unités de production de CIEL Textiles de Maurice, Madagascar et de l’Inde.
Le ministre Jean-François Chaumière devait saluer cette initiative du groupe CIEL qui vise à encourager les différentes unités à maintenir un niveau d’excellence dans la production, mais elle est aussi l’occasion de motiver d’avantage les employés qui opérant au sein de ces diverses unités.
Il devait ajouter que ce genre d’action vient complémenter celles entamées par le gouvernement pour la sauvegarde des emplois et la consolidation des entreprises, à travers, notamment, les mesures du Additional Stimulus Package et les réformes légales, spécifiquement celles, qui à travers son ministère, ont voulu mettre les lois régissant le monde du travail en phase avec les exigences de l’économie moderne tout en améliorant la protection des travailleurs. Il devait aussi parler de l’accident sur un site de construction le mois dernier qui rappelle combien les mesures de sécurité au travail sont primordiales.
Le ministre Jean-François Chaumière devait aussi faire le parallèle entre cet évènement et l’exercice de branding ‘Mauritius – c’est un plaisir’ récemment effectué pour faire ressortir l’internationalisation de ce groupe et de Maurice.
Arnaud Dalais, président du groupe CIEL devait lui faire valoir les stratégies mises en place par son groupe pour le maintient des emplois, et saluera en même temps les mesures « très promptes et dynamiques » mises en place par le gouvernement pour que « le pays et la région soient sauvés ».
Idem pour Harold Mayer, CEO de ce groupe qui soulignera que les mesures du Additional Stimulus Package a en effet aidé l’industrie manufacturière.

VISITE AU GROUPE ESQUEL

Le ministre Jean Francois Chaumière en visite au groupe Esquel à Beau Bassin : « c’est à grâce à la vision du Premier Ministre le Dr. Navin Ramgoolam que des entreprises comme Esquel ont pu bénéficier de l’AGOA ».

Le Ministre du Travail, des Relations Industrielles et de l’Emploi, l’Honorable Jean Francois Chaumière s’est rendu ce matin, jeudi 15 Octobre, au siège de Esquel Group (Mauritius Limited) à Mare Gravier, Beau Bassin. Cette entreprise, pour le ministre Chaumière, est l’un des fleurons du secteur manufacturier mauricien qui s’est implanté chez nous il y a maintenant plus de 15 ans. Sa visite s’est insérée dans le cadre d’un exercice de recrutement que doit bientôt entamer la compagnie, et pour un constat général de la situation dans cette entreprise.

Le groupe Esquel a injecté Rs 104 millions dans l’industrie de 2005 à ce jour. Ses prévisions pour 2008-2009 sont de Rs 86 millions additionnelles, avec un recrutement de 400 personnes pour son unité de Grand Bois le mois prochain. 80% des exportations du groupe sont destinés au marché américain, et l’autre 20% au marché européen, entre autres. Esquel bénéficie des provisions de l’AGOA et prendra avantage du nouvel Accord de Partenariat Economique conclu avec l’Union Européene.

Le mInistre Jean Francois Chaumière a d’ailleurs rappelé que c’est grâce à la vision du premier ministre le Dr. Navin Ramgoolam que les entreprises telles Esquel ont pu bénéficier de l’AGOA. « C’est un plaisir de voir qu’Esquel a su prendre avantage de l’AGOA… surtout quand on connaît l’exigence de la clientèle américaine » dira le ministre Jean Francois Chaumière. Il ajoutera que « les relations industrielles … sont un plaisir à voir » dans cette compagnie et que le ministère du travail s’engagera à aider cette entreprise à motiver davantage ses employés. Le ministre Jean Francois Chaumière s’est entretenu avec le management de la compagnie, dont le General Manager Me. Hemraj Ramnial.

Esquel, qui compte une unité de fabrication à Mare Gravier et une autre à Grand Bois, emploie 3500 personnes : 1600 mauriciens, 850 chinois, 550 malgaches et 250 bangladeshis. Le ministre Jean Francois Chaumière a rencontré plusieurs de ses employés, à leurs différents postes de travail, et s’est également informé des divers chartes auxquelles adhère l’entreprise (exemple : celui de la marque Tommy Hilfiger, qui par exemple exige qu’aucun employé ne soit forcé au travail). Le ministre a aussi pris connaissance des principes W.R.A.P de l’entreprise : soit l’adhésion au lois et aux règlements du travail, l’interdiction du travail forcé, l’interdiction du travail des mineurs, l’interdiction du harcèlement, la compensation et les bénéfices, les horaires de travail, l’interdiction de la discrimination, la santé et la sécurité, la liberté d’association et l’environnement entre autres.