The  environmental  contexts  of  IR  in  the  private  sector

place they would have wanted to position themselves was on the wrong side of government.

In 1984, the PSA affiliated with the International Confederation of Free Trade Unions (ICFTU) as the representative of Samoa, and since it was the only significant player in 6DPRD¶V ,5 V\VWHP WKH XQLRQ¶V VFRSH RI UHVSRQVLELOLW\ HYROYHG WR DOVR cover private sector workers. The PSA has since to date being recognized as the representative of all workers in the public and private sectors. As this relationship with international agencies first developed in 1984, opportunities began to emerge for the union to take on other strategic focuses: such as education, training and other forms of professional GHYHORSPHQWIRUPHPEHUV7KLVKDGGLYHUWHGWKHXQLRQ¶VDWWHQWLRQIURPWKHVXEVWDQWLYH

issues of pay and allowed them to focus on long-term and sustainable development for individual members as well as member organisations. With the assistance of overseas agencies (e.g., ICTFU and the ILO), the union was enabled to carry out workshops and education campaigns, and due to most training exercises taking place overseas, members were expected to gain international exposure that would also be beneficial WRZDUGVGLYHUVLILFDWLRQRI6DPRD¶V,5V\VWHP

4.6   Employment  in  the  private  sector  

4.6.1 The environmental contexts of IR in the private sector

Samoa has a small, embryonic private sector made up largely (80 percent) of many small (family-owned) enterprises that have fewer than five employees (Asia Development Bank, 2007). The private sector business environment has improved over the past few years, with the government giving increasing priority to stimulating private sector development through job creation, education and skill development for both

employers and workers. In 2006, the private sector accounted for about 58% of GDP and two thirds of formal employment (Pacific Islands Forum Secretariat, October 2007).

Also, in recent years, the growing number of construction companies as well as an expanding service industry, mainly in tourism and hospitality, has noticeably contributed to the development of the private sector.

Growth in private sector employment has evidently brought about certain opportunities as well as constraints on industrial relations and on the IR system of Samoa, with regard to labour laws and other areas related to employment. Employment in other areas such as trading banks, small manufacturing, training and other service industries has catered for a limited number of employees. Samoa's private sector is dominated by Yazaki EDS Ltd, as it has since its establishment in 1992, been Samoa's largest private employer, with approximately 1,000 workers at present.

While in many ways progress has been slow and lacking in depth, recent and continuing government reforms are designed to facilitate a more open and accessible enabling environment for business. The government has acknowledged the importance of the private sector in alleviating poverty and is committed to improving the enabling business environment: a commitment which has impacted on the IR policy framework in Samoa.  The lack of jobs makes it very difficult for local government to enforce upon private sector employers by means of legislation the inclusion of such benefits and entitlements as maternity and paternity leave, long service leave and health insurances.

The current legislation, however, provides for minimum wage and conditions of employment as well as payment of mandatory entitlements such as superannuation through the National Provident Funds (NPF) and accident compensation funds via the

Chapter  Four:  Findings  and  Analysis      117    

Accident Compensation Board (ACB). Thus, establishment of agreed terms and conditions other than those specified under the legislation is left entirely to the employer¶s discretion. As such, remuneration for labour relies heavily upon the forces of the labour market and the value and availability of certain skills locally.

As typical of many PICs, issues of pay disparity, increase in business costs, employment creation, social dialogue and rights at work emerge as some of the FKDOOHQJHVIDFLQJPDQ\HPSOR\HUVLQWKHSULYDWHVHFWRU7KHHPSOR\HUV¶UHSUesentative interviewed emphasized that these issues were seen as equally valid for the participation of both employers and employees in determining national rules and policies during the ILO workshop.  

4.6.2 Legislation

The Labour and Employment Act of 1972 regulates employment and IR in the private sector. In practice, however, the number of employees covered under the act is far greater than the population of the private sector alone as it also applies to workers in statutory Government Corporations (e.g. Water Authority, Airport Authority, Electric Power Corporation and others).

The Minister of Labour is responsible for overall direction and control of the act but the MCIL, under general supervision of the Commissioner of Labour, is responsible for the day-to-day administration of the act. The department has the broad functions of advising workers and employers on all industrial relations matters, taking appropriate measures to ensure safe and healthy working conditions, encouraging good relationships between employers and workers and ensuring that employers, workers and other persons of

obligation fulfill any requirements being placed upon them by means of voluntary settlements and industrial agreements and by the act and any other regulations administered by department.

Among the areas covered under the Labour and Employment Act of 1972 are:

administration of regulations outlined in the Act; rules for wage protection and contract of service including termination of service and notice periods, holiday leave, hours of work and overtime; shift work; occupational health and safety regulations; and procedures for dealing with industrial disputes. All substantive provisions, for example leave, basic working conditions and safety provisions, are enforced by the Ministry of Commerce, Industry and Labour. An interview with one of the key participants noted that the establishment of terms and conditions of employment in the private sector relies largely on self-regulation and the intention of an employer to facilitate payments of other additional benefits for workers. In addition, the nature of most agreements between employers and employees are largely informal based on what one might WHUPHG DV D ³JHQWOHPHQ¶V DJUHHPHQW´ 7KLV WHUP UHIHUV WR ± an informal, oral understanding resting on the sense of personal honor of the involved parties. Generally, such agreements are not enforceable through courts (Business Dictionary, 2010).

A provision for the establishment of a minimum wage by the Head of State, on the advice of Cabinet, is contained in Section 19 of the act. The minimum wage is expected to provide workers with a basic standard of living when supplemented by other subsistence activities such as farming and fishing: activities in which most families engage. At present the minimum wage stands at $T2.00: the equivalent of NZD1.06 per

Chapter  Four:  Findings  and  Analysis      119    

hour.¹⁷ Under the act, members of the Advisory Committee are to consult the employers and employees at the time of determining a minimum wage before any changes are to take effect. In that regard, the act is considered to sufficiently support the participation of both employers and workers in the establishment of substantive rules such as wages and other terms of employment. Wage negotiations and policies formulations; however, in the private sector relies heavily on management prerogative and initiative. This avenue is not available in the public sector under the Public Service Commission Act of 2004 as the determining power for wage setting lies with the Commission, with the exception of a General Wage Increase (GWI) where approval from Cabinet is required.

The act also expands on the employment of women and children. Under the terms of the DFW DPHQGHGZRUNHUV PXVWEHDW OHDVW  \HDUVRIDJHH[FHSW LQ FDVHVRIµVDIHDQG

OLJKW¶ZRUNUHndered to the matai; and no worker should be required to work for more WKDQKRXUVSHUZHHN7KHDPHQGPHQWWRWKHµZRUNLQJDJHFODXVH¶FRLQFLGHVZLWKWKH

ILO core convention.