January 28, 2020

The Workers’ Rights Act 2019

Proclaimed on 11th October 2019 and effective as from 24 October 2019[1], the Workers’ Rights Act 2019 (“WRA”) repeals the previous Employment Rights Act 2008 (“ERA”).

 

The key changes in this legislation are summarized as follows:

 

Definition of a worker

  • The WRA raises the salary threshold based on which a worker is identified from MUR 360,000 (equivalent USD 9,400) to MUR 600,000 (equivalent USD 15,700) per annum. Hence, a worker is an employee whose basic wage is MUR 50,000 (equivalent USD 1300) or less in a month.
  • The provisions of the Act hence do not apply to an employee earning above that threshold except as otherwise provided in the Act.
  • Provisions that are applicable to all employees irrespective of basic salary include[2] discrimination, end of year bonus, maternity and paternity leaves, juror’s leave, termination of agreement and reduction of workforce, workfare programme fund and portable gratuity retirement fund.

 

Contract of Fixed Duration (CFD)

The WRA prohibits the use of a CFD, if the Worker employed, other than a migrant worker, is in a position which is of permanent nature, unless it falls within the exceptions stated in the Act, which are as follows:

  • for the performance and completion of a specific piece of work which is temporary and non-recurring;
  • in respect of any work or activity which is of a temporary, seasonal or short-term nature or short-term work arrangements that are normally project related and aligned to changes in the product market;
  • in replacement of another worker who is on approved leave or suspended from work;
  • for the purpose of providing training to the workforce;
  • for a specific training contract; or
  • in accordance with a specific work or training scheme set up by the Government or a statutory body for a determinate duration.

 

End of Year Bonus (EYB)

  • Previously Workers (as per the ERA) were entitled to EYB based on earnings while for employees EYB was based on basic wage.
  • As per the WRA, all employees are now entitled to the EYB based on 1/12 of the Employee’s earnings. Employees are also entitled to the EYB if:
  • their employment is terminated in the course of the year
  • an Employee resigns in the course of the year on or after having been in continuous employment for at least 8 months.

 

Settlement Agreement

Before executing a settlement agreement in respect of a dispute relating to the termination of a Worker’s employment agreement, it is now mandatory for the Worker to consult an independent advisor.

Failure to provide an opportunity to Worker to consult an independent advisor shall result in the settlement agreement to be null and void.

 

Wage Guarantee Fund

This section introduces the concept of a “Wage Guarantee Fund” which will be used to pay a Worker, who does not receive remuneration due to the insolvency of his/her employer, up to a maximum amount of MUR50,000 (equivalent USD 1,300).

 

Leaves

The WRA introduced the concept of Vacation Leave, Special Leave, Juror’s Leave and Leave to participate in international sports events. 

 

Promotion

  • The Act imposes a mandatory obligation upon the Employer, where a vacancy arises in a higher grade, to give consideration, as far as feasible, to qualifications, merit and seniority.
  • In addition, notice of any vacancy shall be posted in a conspicuous place which may be seen by every Worker at least five days before the promotion or selection exercise.

 

Disciplinary Hearings

It is now mandatory for an employer to provide an Employee, at his request, with all information or documents as may be relevant to a charge prior to the holding of a disciplinary hearing including a copy of the minutes of proceedings of the disciplinary hearing. There is no requirement to mandatorily have an independent chairperson to chair a disciplinary hearing. However, to avoid any jeopardy to the employee’s rights, the latter is still entitled to a fair hearing which implies an independent fair-minded chairperson.

 

Reduction of Workforce

  • The process in relation to reduction of workforce has gone through a reform. It applies to an Employer who has employed not less than 15 Employees or having a turnover of at least MUR 25 million (equivalent USD 650,000)
  • The WRA imposes upon the Employer a duty of notification including a duty of negotiation with trade union representatives prior to a redundancy situation in a view to finding a solution or an agreement. Failure to reach a solution entitles both parties to reach out to the “Redundancy Board.”

 

Portable Gratuity Retirement Fund

  • The objective of this concept is to authorize recognition of the terms of service of an employee irrespective of the number of employers for whom an employee has worked for.
  • It will not be applicable to an employer who has a private pension scheme in respect of which a pension is paid, to an employee earning a basic salary exceeding MUR 200 000 per month (approximately USD 5,200), and to an employee who is more than 50 years of age.

The WRA also entails immediate application of the following steps: 

  • Employers must ensure that Workers earning in excess of MUR 30 000 per month (equivalent USD 790) and up to MUR 50 000 per month (equivalent USD 1,300) are now given the protections afforded by the Act, including refund of annual leaves that have not been taken; and
  • the statutory end of year bonus for all Employees must be paid in December.

 

[1] except for section 126(7)(b)​. Part VIII of the said Act came into operation on 01.01.20. 

 

[2] but are not limited to

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