MAURITIUS EMPLOYMENT LAWS & REGULATIONS, AN OVERVIEW

Every foreigner who wants to relocate or invest in Mauritius has the duty to understand the laws and rules in force in the country.  Even if many can afford the support of professionals in the fields, some basic knowledge still remains important. We are launching a series of short articles on our blog to help our readers understand the laws (and the spirit of law) which are related to the setting-up & operation of business in Mauritius. This series will include, amongst others: company law, accounting rules, tax rules and employment.

We start our series with the last topic: employment.

The authority

The Ministry of Labour, Industrial Relations & Employment is the supreme authority which regulates labour laws in Mauritius. The ministry operates several departments, each one specializing in a particular aspect of employment: operational health & safety, labour law, employment of foreign nationals, licensing of recruitment agencies, etc.

The head-office is found in Port Louis (where else?) – but several sub-offices are operational in various regions of the island.  These sub-offices offer a number of services to employers & employees and were created to avoid overloading the head-office. 

The Laws

The Employment Rights Act is the main law that governs employment in Mauritius.  The Law itself is not heavily loaded with legal and technical jargon. It is written in a rather accessible language and allows the nonprofessionals to at least understand the fundamentals.

It is to be noted that the Employment Rights Act is not the only reference that needs attention. Employers need to consult Remuneration Orders issued by the Ministry of Labour, Industrial Relations & Employment. Remuneration Orders set out the additional rules of employment in industries operating with specific needs. For example: hotels, tourist’s entreprises, shops, call centres, etc. These businesses operate specific working hours and therefore turn to Remuneration Orders of their particular industry to determine, for example, how overtime is calculated or paid, shift systems & mandatory rest periods, after-hour transport obligations, meals & other allowances – and other specific issues.

Employment, an overview of the main points

·         Intervals between two salary payments shall not exceed 1 month.  No agreement is valid if it mentions an interval exceeding 1 month. Employers and employees may enter into agreement for pay intervals of less than 1 month

·         Working hours: 8 hours of effective work per day – except for those working on a part-time basis and for watchmen.  For the latter, 12 hours of effective work per day is recommended by Law.

·         Overtime should be on mutual agreement (employer & employee). On expected future overtime, the employer has the duty to give a 24 hour notice to his employee (wherever possible) and the latter may refuse to attend such overtime work, with a 24 hour notice.

·         A worker performing on a public holiday earns twice his hourly rate for each hour worked on that day.

·         For each 4 hours of work, an employee has a right to 1 meal break of 1 hour AND to 1 tea-break of 20 minutes Or 2 tea-breaks of 10 minutes each.

·         No discrimination: employees of the same category, working on the same hours should be paid on an equal basis.

·         The right to payslips cannot be discussed – it is mandatory!

·         No deductions are allowed on salary, save and except those mentioned in the Law. In case of refund of advance salaries, the employee needs to give his consent in writing and the refunds shall not exceed one-fifth of the monthly salary.

·         Maximum deduction (in any case) shall be less than 50% of the salary payment

·         Employers cannot apply financial sanctions (fines) to employees for negligence or damage to equipment.  Employers cannot apply any interests or financial charges on advances made to employees.

·         The cost of transport shall be borne by the employer and refunded to the employee if the permanent place of residence of the latter is more than 3kms from the place of work. If called to work after normal working hours (where public transport is not available), the employee has the right to a free transport means from his employer, irrespective of the 3kms distance

·         The right to leaves (annual, sick, maternity and paternity) is opened to the employee after 12 months of consecutive employment

·         Annual leave: 20 days + 2 additional days. 

·         Sick leave: 15 days.

·         Maternity leave: 12 weeks (with an option of 6 weeks prior to confinement). Breast-feeding female workers have the right to two breaks of 30 minutes each or to one break of 1 hour per day, over a period of 5 months following confinement or over such periods as may be medical advised.

·         Paternity leave : 5 consecutive days.

·         Any employer, employing more than 10 persons should cater for medical facilities on-site.

·         The employer has the duty to provide transport facilities to any employees suffering from accident on his place of work.

National pensions funds & training levy

The maximum salary on which pensions funds & solidarity fund contributions are calculated : Rs12,640

-       The employee pays 3% (National Pensions Fund) + 1% (National Solidarity Fund)

-       The employer pays 6% (National Pensions Fund) + 2.5 (National Solidarity Fund)

-       Training levy is paid by employer at the rate of 1.5% on the actual salary (not the maximum of Rs12,640). This training levy gives right to a refund of costs of training spent on training schemes approved by the government.

We have, in this article, highlighted the main points of labour law and regulations of Mauritius.  Readers will understand that it is impossible for us to cover all the laws in this short article.  We therefore make ourselves available to answer your queries by email (nadeem@gibsonandhills.com)

www.gibsonandhills.com

Walk on, walk on, with your head high...

Mauritius has been in the limelight following ‘many’ events that were reported in international press.  Bad publicity does not exist, they say but nonetheless paradise-island was somewhat hurt in what was relayed in the media.  A bullet fired to our open wings. It does not matter, we still remain one of the world’s best destinations and no one can counter that.  I think the island is worth some praise, despite our internal problems and pains – who does not have them?

 

Irish Boycott

The first scandal that hit us was the murder of Irish personality, Michaela Harte. She was 27, murdered in a five-star hotel in Mauritius on her honeymoon. International press did not miss it and soon whole Ireland was against our island. Mauritians living in Ireland were victims of racial hatred and discriminations. 

Mauritian police had to act fast and find the culprits. In haste, it got three persons in the nets. After weeks of trial, the jury found all three of them innocent and they were released.  All of the three persons arrested were employees of the five-star hotel where Michaela spent her fatal honeymoon.  These persons were at all times claiming their innocence and on several occasions declared they were victims of police brutality. They were forced to admit a crime they did not commit.  Police was tagged as incompetent and denied of the glory it was expecting.

Ireland felt that its child was denied justice and this was clearly demonstrated by Irish Prime Minister’s declaration: “Justice is not done”.  Then followed a systematic boycott against Mauritius, legitimate maybe but definitely understandable. Some travel agency displayed ‘No tickets to Mauritius’ on their windows. Mauritius was no longer in their hearts, clearly and bluntly.

 

The Board of Investment Scandal

One of the most reputed institutions of the country, the Board of Investment (BOI), was recently hit by a unprecedented scandal.  The BOI promotes Mauritius as a business and luxury-living destination.  It acts as a one-stop-shop to regulate, facilitate and encourage foreign investment in paradise-island.  One of its core services is to coordinate, supervise and recommend application for residency permits submitted by foreigners who wish to invest or retire in Mauritius.

Apparently some of the BOI officers grouped themselves into a gang and were racketing ‘poor’ foreigners.  The gang offered their own ‘services’ by delivering fake permits to their victims. Blasphemy!  Investors applying for occupation permit through the official channel would be approached by these corrupted officeials and were called to pay some additional fees for an expeditious treatment of their applications.  Victims would never doubt the seriousness of the proposal since this was being done on the premises of the BOI and by officers of the BOI. Enquiries led to the arrestation of a couple of BOI officers and the whole network was dismantled.  It appeared that this gang was a well-engineered one.

This scandal almost blew away all the efforts done by the Government to position Mauritius as a worldwide business and leisure destination.  We could sense the anger around; among professional consultants, Ministers and all those who are working hard to build the image of modern Mauritius.  We could not afford to bear with this one, surely not.  But the bullet was already out of the barrel and it had to cause harm.  Whom do we trust now if fake documents are being manufactured inside BOI’s walls?  Has the whole system shown its limitations and should it be pulled down?

I make it a point to mention that the Managing Director of BOI, Mr Ken Poonoosamy reacted with the calmness and intelligence, so essential in these types of situations. He did well; he reacted with a proper communication strategy which, in my opinion, reassured the international community of investors and professionals.

I’m not justifying the crime, but some brains & eyes cannot limit themselves to their job when they see too much foreign currencies moving near them.  Some officers at the BOI (and their gang members) thought it was legitimate for them to have a bite in the foreign investments cake…maybe they thought that they were playing a very important role in handling residency permit applications and they deserved a greater share than their actual salary.   The BOI, as an institution, did well do dissociate itself from these worms.

Since then, much has been done to restore the image of BOI and Mauritius as an investment hub.  It all seems to be back on track again.  Government announced recently that we are about to reach the Rs4bn figure in foreign direct investment (FDI).

 

Arms traficking

More recently, an American NGO, the Conflict Awareness Project (CAP), reported that Mauritius was about to be used as an international arms trafficking platform by Russian mafia. CAP has been very active in tracking down illegal arms traffic and supports the United Nations in implementing an international arms treaty to formalize and regulate arms trading.

CAP’s report was full of lies and baseless allegations.  It hurt Mauritius, going as far as treating our country as an ideal host to arms traffickers willing to pursue their business in the post-September, 11 era. CAP put international media to its service and the information was relayed, verbatim, in some of the world’s most reputed columns. Local media was hooked along.  Our local “do-everything to sell more papers” reporters had a scoop!  Because it came from the US, it had to be true.  CAP blamed a well-known Mauritian family of lawyers to be part of the ploy, accusing one of the members of this family (an actual Minister) to have played a game of influence and helped Russian mafia in reaching to their goals.  Come on!

Gibson & Hills Ltd (yes, yes!), according to CAP is a company founded by Russian mafia to host their dark business in Mauritius.  I thought I founded Gibson & Hills Ltd, but somehow because CAP is American, local press gave more credit to her words! LOL!   Those local press reporters did not verify any of the information contained in the CAP report, and yet such information is readily available at the Registrar of Companies.  A simple check would have revealed that Gibson & Hills Ltd was created by Nadeem Mosafeer (Me) in January 2008, and the Russians set foot in Mauritius only in 2011. I had to show those reporters my blogs with their 25,000 readers and ask them ‘you think that’s part of the Russian’s gameplan?’ .  Many understood that it was all about a sensational lie from the director of CAP, Ms Kathi Lynn Austin… but many still had to be convinced.

We then issued a counter-report and blew away all those ugly, dirty and blatant lies that Ms Austin wrote in her report. We revealed the actual gameplan of Ms Lynn.  She claimed that the Russian investors (our clients) were lieutenants of Viktor Bout, the famous arms dealer.  In her report, she tries to defend a crook (a Mauritian) who was arrested for swindling the Russian investors of more than Rs10 million.  Ms Austin went so far as accusing local police of incompetence, and claiming she held a truth that Mauritian authorities did not care take into consideration: The crook was a gentle and innocent guy, the victims of the crook were the real big bad wolf!  Guts and foolishness. 

 

Ms Austin’s aim was clear, and we wrote it clearly in our counter report:

 

·         CAP had to show that even harmless countries like Mauritius could play an active role in arms trafficking.  Therefore it was essential to implement an Arms Treaty.

·         CAP was about to make itself known to the world with a brilliant work, a sensational report revealing hell business in paradise-island.

          

·         CAP shows that it is a very serious NGO and this can bring further blessings from investors.

As for the Mauritian crook, he would see all those legal entities held by the Russian collapse and he would no longer be held accountable for the massive frauds he committed. Obviously, we came to know that Ms Lynn and the Crook were actually friends on facebook and it was clear that :

The Crook gave biased information to CAP, and CAP would play in favour of the crook.

Now here is the real story.  The Russians wanted to invest in a charter airline business to serve the islands of the Indian Ocean.  The crook informed them that he was holder of an Air Operators Certificate (AOC) and could help them set their planes take-off faster than they planned.  The crook took over USD400,000 in the process, but never showed the original(AOC to the investors.  When the Russian enquired with competent authorities, it was discovered that the AOC was a fake one.  Russian complained to police, crook arrested.  Crook humiliated, crook seeks vengeance. Crook hooks CAP and CAP gets traps in a sensational but false story ! Full-stop, that’s what happened.

CAP and director Kathi Lynn are nowhere to be found.  They have been called to answer on different parts of their report by local authorities; no signs of life on Mars. 

All of the above events had a serious impact on the image of Mauritius.  Still, the hard-work and endurance of the Mauritian population in general outplayed those negative impacts.  Mauritius will continue its progress; its leaders have a vision and are determined to work towards our goals. We will succeed.  As one of the top performing economies of Africa, paradise-island will not abandon the playfield.  For those who are not aware, we successfully shifted our economic pillars from agriculture to textile, we had the same success when we implemented tourism & textiles… and now we are moving towards being a leader in worldwide finance and services industry.

What upsets me is that those who are doing everything to hinder progress will be the firsts to claim a share of success, when success will be.

 

 

 

 

 

 

 

 

POLITICAL TURMOIL AND ITS IMPACT ON BUSINESS...

Much has been said and written on the political turmoil that is apparently hitting Mauritius. It’s true that the moves were spectacular – the President of the Republic of Mauritius resigns and plunges back to active politics.  He proposes to be the next Prime Minister to rescue a country on the downfall!  As the architect of the modern Mauritius, Sir Aneerood Jugnauth (SAJ) was (and for many he is no longer) a much admired personality. Controversial many a time; but then this is expected from every determined leader that leads a nation with a vision and ambition.  Resigning from the most gratifying retirement post in the country (Presidency) to again face active politics and its bruises: you’ve got to have strong reasons. Many of us do not agree that the country’s progress is the main motive behind the move.

We’ll leave the political motivations and other strategies for some other time.  I’ve been thinking on the impact that a political turmoil might have, particularly during this actual worldwide economic crisis, on Mauritius.  Bear in mind that this is not a scientific analysis of the situation, but my personal opinion based on observations made by a common layman, which I am.  You may be deceived, I warn you.  You won’t find any economic theory or political analysis of our system, depicted in heavily colored illustrations and charts. Neither will you find a post-mortem report of local history.  I leave this to the more learned people around!

To me, political stability has been one of the key factors of our progress so far.  My definition of political stability lies not in having the same governing party over a long period of time. I’d rather define stability as the coherence in vision among successive leaders and the smoothness of the transition processes.  So far we have seen that most leaders share almost the same vision. There a visible consensus on the resources we have (and don’t have), the industries we need to develop and the way forward. We all agreed that the country’s ambitions should not be limited to the size of its surface area, we all agreed that we have the potential to play leading roles in the region and on the world scene – we all agreed on these and have been working towards these. We still agree, and so do the leaders.

It is the duty of the opposition party to shout and cry out on every opportunity it has.  The actual leader of opposition, Mr Berenger, is famous for his hysteric statements, so much that he makes me laugh (I give him a big LOL!) whenever he says anything. I'm sorry, but even if he's right, my brain can't focus on him anymore. Maybe if one day, he gets the Prime Minister's chair, I will think differently; but then, that's a different story in today's context.  Decades back, we would rely on the information opposition parties would relay to consider whether a particular transaction or event could be qualified as scandal.  Today, we have different  means to obtain information; internet, blogs, forums and private radios.  Thank God!  When the opposition party shouts high and loud that the country is in a catastrophic state, I tend to smile and say "there he goes again!". I only say to myself that the guy is doing his job - honestly and to the best of his abilities.  He has the habit to utter strong words like 'etat d'urgence economique' (when he himself was holding the reigns of the country and was panicking during the financial crisis) or to treat others with discriminative nicknames 'Lake lerat' (rat tail), or to qualify people as 'intellectually limited'.  Sorry for this long paragraph but I had to write this to make my point: I simply can't take on his words, unless he shows some concrete things - which he hasn't done so far, in my opinion.

Now he has convinced SAJ to join him and save the country. To save from what?  The only thing I can see the ex-President saving is his son, Pravind, completely drowned in the political ocean and about to be completely erased from the local political scene.  Now you can refer to the last sentence of my first paragraph and read again.

Having said all this, I do not foresee any major upsets in the business environment. In fact, I do not even foresee any upsets at all! I may be wrong; I'm not a political expert. But I can't help myself thinking that this is another tune from the same trumpet. In fact, the leader of the opposition shouted on every roof that we will soon see major developments, through the resignation of SAJ, yet again the so-called major developments are yet to come.  The resignation of SAJ was the talk of the town for two days and all the excitation has faded and reduced to petty gossips. 

I don't expect any impact on business environment.  Our economy allows for freedom-of-business, if I may define the principle in these words. As long as you observe the rules and regulations in force, you are pretty free to run your enterprise.  We don't have a sensible stock exchange which fluctuates with the tides, human emotions, or whatever other non-economic & non-financial reasons traders usually put forward.  Politics has very little effect on business in Mauritius, unless it leads to major regulation changes (tax system, regulatory conditions, etc.). Obviously, when the government changes, there is an observation round. Investors are less reactive, they stand on the watch-out mode but stay ready to shoot when the signal turns green. It turns green when people get back to work again and the general excitation is over. 

In Mauritius, you shout, cry and shout again...for some hours or days, and then you realise that you need to feed your family so you get back to normal life again. Back to work or to your business.  There is a minority who has nothing to lose and who looks for every opportunity to get back to popular movements on the streets.  It has never lasted long, never gathered any big momentum, save on Facebook. 

As someone running his own business, I always keep an eye on the external factors that may affect my company; and politics is one of them.  It never had any major impact on my business.  Yet this business of mine is deeply connected to the political-social-economic equation.  If the government stops encouraging foreign investment, or removes business incentives (low tax rate, user-friendly procedures, etc) – my business would definitely hit a low and I would need to restructure my service grid.  It hasn’t so far as successive governments have understood the importance of foreign investment and the need for a simplified business framework.  Entrepreneurship is encouraged and local people given ‘almost’ every kind of nursing to help realise their business projects. I can’t see this stopped by any future leader, well I really don’t.  If it happens, it will be a Kamikaze at the head of the country.

All brings me to the final remark that politics is more related to soap operas.  You know that the actor will fall in love, will marry the actual actress, will fight with her, ask and get divorce and then fall in love with another one.  The scenario will keep on revolving with some new twists and turns… that’s exactly the case in Mauritius.  When the show is over, switch off the TV - get back to work, until the next episode starts.

Warning: Soap operas can be addictive and are injurious to family life