Mauritius: Shakeel Mohamed - "This government has backhandedly given a beautiful present to the employers"


As the workers' rights bill was being debated in parliament last week, some unionists accused the previous minister of labour of having made life difficult for employees with the laws he had introduced. Weekly speaks to Labour Party MP and former Minister of Labour Shakeel Mohamed to explain and also seeks his opinion on the new law.

When Weekly interviewed Reaz Chuttoo and Jane Ragoo, unionists, last week, they claimed that while you were minister of labour, you introduced laws that were not in favour of the workers.

Ever since 2013, Chuttoo specifically, has been going around saying I brought in laws in 2013 that reduced the compensation payable to workers. In fact, it was in 2008 that the Employment Rights Act and the Employment Relations Act came into place.

Was it then-Labour Minister Jean-François Chaumière who brought the bill to parliament?

No, it was Vasant Bunwaree who introduced the law in parliament but Chaumière prepared the bill and organised the consultations. And thereby lies Chuttoo's intellectual treachery. It's easy to tell workers, 'this is what the minister did' and if they repeat that same lie often enough, people will end up believing it. I have asked Chuttoo whenever I have met him to indicate to me which section of the law I amended in 2013 that reduced compensation to workers. He has not been able to do so.

OK. Let me play the devil's advocate. According to the 2013 amendment, the employer can just declare hardship, close down his company and make employees redundant with no further ado. Isn't that true?

That is absolutely not true. That was in 2008. As from 2013, for redundancy, there was a new division of the Employment Relations Tribunal (ERT) called the Employment Promotion and Protection Division. So an employer was no longer allowed to reduce the number of workers in his/her employment either temporarily or permanently or close down his business unless he had consultations with the trade union concerned, explored the possibility of avoiding the reduction of workforce or closing down by such means as restrictions on recruitment, retirement of workers who are beyond the retirement age, reduction in overtime, shorter working hours to cover temporary fluctuations in manpower needs or retraining or transfer to other work. When the Ministry of Labour refers the matter to the tribunal and that institution finds that the employer's reduction of the number of workers in his employment or the closing down of his business is unjustified, it may, with the consent of the worker, order that the worker be reinstated in his previous employment with continuity of service and payment of remuneration as from the date of termination of employment to the date of reinstatement; or be paid severance allowance at the rate of three months' remuneration per year of service.

Don't you agree that the 2008 amendment that put aside the 1975 Labour Act was a bad law?

Let me tell you what it was. At the time, the reason this law was brought about was the global financial crisis, commodity shocks and the expected aftershocks in Mauritius. Naturally, the government's priority was to ensure that jobs were protected. So in 2008, if an employer wanted to make a worker redundant, he had to write to the minister of labour. If ever the employee thought he was being treated wrongly, this had to be taken to the

Industrial Court. That changed the game.

It changed the game in favour of the employer at the expense of the employee, you mean?

It changed the game in favour of the employer, in the sense that it made it more flexible but unfortunately, easier for those employers ready to abuse the system to terminate people on redundancy. It was an unintended consequence.

How did your government justify that?

What we were told was that we had to ensure that existing jobs were protected. We were made to understand that we had to ensure that Mauritius was made more resilient in the face of the global financial crisis. It normally took an average of five years for the Termination of Contract Services Board to make a decision, and because of this delay, the whole enterprise was threatened and if the whole enterprise went down, we would not be able to save ALL jobs.

Were you convinced?

It was a logical explanation, but I wanted to wait and see how it turned out in practice and in reality. As Navin Ramgoolam always says, the proof of the pudding is in the eating. So when I became minister in 2010, I got letters from people complaining that the law was being abused by employers who were firing people using the argument that it was for economic reasons. That for me was turning to be a sham and had to be stopped. This is why I changed the law in 2013 so that employers no longer simply sent a letter to the minister as if he was a glorified letterbox. They had to serve a formal notice to the permanent secretary who, along with the Employment Promotion and Protection Board within the ERT, analysed whether or not the enterprise had good reasons to close down or whether the economic reasons were pure invention. The burden was on companies to prove they were in financial difficulty.

Were there cases where employers were forced to take back or compensate their employees?

Absolutely. Many people have won their cases against their employers at the ERT. One of the cases is where the Mauritius Shipping Corporation lost its case against many employees. There is also the case of Wellkin Hospital. In both those cases, the employers have appealed against the finding of the ERT. In both cases, people were terminated for economic reasons, their employers had to go before the permanent secretary and convince him that there were good economic reasons, and plead before the ERT. The ERT listened and gave judgements against the two employers. In the case of the Mauritius Shipping Corporation, it is interesting to highlight that the government was represented by Hon. Sanjeev Teeluckdharry and Hon. Maneesh Gobin. They were using the law they are so fond of criticising today to get people fired for no good reason. The point is that in 2013, I put in place that safeguard.

Chuttoo's point is that you cannot punish people twice for the same crime. If somebody is caught stealing, you can fire him but cannot simply wipe out all the years of service he has devoted to that company. Don't you agree with that?

Years of service have nothing to do with the amendments I brought in 2013. The law as far as gratuity is concerned under the Labour Act is the same as it was under the Employment Rights Act in 2008 and the Employment Rights (amendment) Act 2013. No changes were brought. Gratuity upon retirement was and is still 15 days' pay per year of service. Where there was an anomaly is that if a worker was fired or voluntarily decided to stop working, the company did not pay him/her for their years of service. With the new law, the employer will have to make a contribution consistently and even if the worker decides to change jobs, he does not lose his years of service.

Aren't you kicking yourself for not having introduced a similar law when you were minister of labour?

No, because no minister introduces all the laws in one go. You always pick up from where your predecessor left off. We introduced other laws relevant to the economic context at the time and which helped the workers tremendously.

Such as?

Such as the Workfare Programme. More than 75,000 people lost their jobs between 2003 and 2005 when textile factories closed down. We came up with the Workfare Programme in 2008, and it was improved in 2013 so that if the financial crisis hit Mauritius, it would help workers, albeit temporarily. Before 2008, this did not exist. Workers who lost their jobs were no longer left to fend for themselves. They were paid for a whole year, giving them a breather until they found another job. We were even working on the Portable Severance Allowance. I announced it at the International Labour Organisation (ILO) in 2012. A technical committee under Ali Mansoor [former financial secretary - ed] had started working on it and the current government picked it up from there.

It's also a good thing that they maintained the Workfare Programme, isn't it?

Oh, let's talk about that: the question now is who contributes to the Workfare Programme? In 2008, we ensured that it was both the employer and the employee who contributed. Things are radically different under the new law.

What has changed?

With this new law, the government has removed the contribution of the employer entirely. So the employer does not contribute anymore; only the employee contributes to his compensation when he is unemployed. That means that this government has backhandedly given a beautiful present to the employers by giving them a blank cheque as far as their contribution is concerned.

Their argument is that employers have to contribute to the Portable Retirement Gratuity Fund. Does that not convince you?

This is where a little knowledge is a dangerous thing. You cannot mix issues; you cannot say that I have contributed for your retirement but for your temporary unemployment, I will not give you anything! These are two different things. A government cannot expect an employee to contribute to his own unemployment benefit! This is the only country in the world where that happens. One should not mix "severance" and "gratuity on retirement". They are different.

As long as the unemployed are getting paid, where is the problem?

Who contributes is important. Suppose a labourer loses his job tomorrow. He cannot be expected to pay for his own unemployment benefit, can he?

No, because he paid while he was working.

So? The fund is no longer being contributed to by the employer. It's the wrong principle. The unemployed cannot be the only ones paying for their own unemployment benefits!

Aren't you satisfied that at least the Workfare Programme has been kept?

Only parts of it have been kept. The employer no longer contributes and the government has also removed the training element. The recycling fee no longer exists...

What is the recycling fee?

When someone has his job terminated, the employer has to pay the government a fee to enable the person who lost his job to find a new job through training and some unemployment benefit. This is what the Labour government imposed on the employers. Today, this recycling fee has been eliminated.


I don't know that.

But you said that the Workers' Rights Act was perfect, didn't you?

I never said it was perfect. I said it's an improvement. This is where the journalists who said that I did my mea culpa got it wrong.

You did say to the current minister of labour, 'Don't make the same mistake I made, didn't you?

Yes as far as discrimination against migrant workers is concerned. I did not change the discrimination there was in the law in 2013. The foreign worker is discriminated against; he is not entitled to the Workfare Programme although he and his employer contribute to it. Why does he not get his years of service and gratuity? He has worked. So his years of service cannot be lost. A Mauritian who has worked and retires gets a gratuity, but the foreigner who worked and contributed for all those years gets nothing. Those are little issues that should be taken care of. The ILO makes it unlawful to discriminate against a foreign worker.

Did the minister listen to you?

He did but did not do anything. The recycling fee is gone and there is nothing about training and the discrimination remains.

But all in all, are you happy with the Workers' Rights Act?

Apart from the issues above, the problem right now is protecting jobs. There will be consequences to the changes. I have heard that many employers are already contemplating redundancies and moving away from Mauritius. Government should engage with employers to protect jobs as well as create new jobs.

Were jobs safer with you? Give us some figures...

Between 2008 and 2015, 12,000 people lost their jobs for economic reasons. Between 2000 and 2005, that figure was 75,000 just for textiles.

What are the figures between 2015 and 2019?

For that period, the government refuses to give figures.

Statistics Mauritius does, doesn't it?

Statistics Mauritius says 4,000 people lose their jobs every year for economic reasons. That is 20,000 since the beginning of the current government's mandate. I think it is much higher. The minister of labour himself [Soodesh Callichurn -ed] himself said that more and more people are losing their jobs for economic reasons and blamed the law for it. Yes, some people take advantage of the law, that's true. But that's mainly because economically our country is doing badly. That's why we have an eroding base, we are not competitive enough, the government is doing nothing for our small and medium enterprises (SMEs), and we are taking a beating on the international market so clearly we are going to have people who will delocalise to other places like Madagascar.

Going back to the Workers' Employment Rights, are the workers going to be better off?

Good question. As far as their years of service and contributing to that, I am of the view that the government will have to ask employers to contribute more to ensure that every employee gets the minimum 15 days for each year of service. That is a good thing. Now, will it be sustainable for the SMEs? That is for them to answer. The echo I am getting is that some of them will have to let go of some employees to stay competitive.

Will big capital play the game?

I don't know. There is one issue where Ashok Subron is right: Going on strike is complicated now. First you have to declare a dispute and go through the dispute together with the employer so the hands of the unions are tied to those of the employer. Also, by reducing the threshold for union recognition to 20 per cent, the government will kill trade unionism because what we will see is a multiplication of unions and, as the ILO said, the more unions you have, the weaker they will be because they are divided.

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