EMPLOYMENT ACT: Foreseeable changes in the near future

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By: Fathmath Hana Yoosuf
22 October 2018

Prior to the Employment Act 2/2008, there has been absolutely no legislation or regulation enacted on employment in the Maldives except the regulation established and administered by the President’s Office in June 1994. This regulation was historically the first document that enforced a contract of service to be signed between the employer and the employee and defined the rights and obligations between the parties. However, the regulation was the key reference for government or public service appointments only.  A legal framework for the private sector governing the employment relationship was also drafted and enacted later during the same year. These regulations were amended from time to time and remained in force until adoption of the Employment Act 2/2008 in 2008.

Over the past ten years, there hasn’t been any significant or a major revision to the Employment Act although minor amendments were made few times. The question to ask is should this ten year old law be given a major overhaul or should it be kept as it is? In fact, a major overhaul of employment law is overdue. The constitution is no longer fit for purpose in Modern day Maldives. There are many categories of employment from permanent contract, temporary contract and contract for flexible work arrangements to employees working in factories, and in different industries. The current law provides full protection only to employees in the first category.

The dynamics of the Maldives workforce has changed in the past decade and this has transformed the way people work. What was once genuinely welcomed by employers and employees has changed due to the impact of demographic, socio-economic, technical and political influence and particularly due to changes in the labour market. Issues of work/life balance have become more important in Maldives in recent years, with employees paying more attention to “quality of life” such as parental leave, flexible working hours, high quality child care facility, minimum wage, occupational health and safety, health insurance, equal employment opportunity and the like. The provision of medical leave and other leave entitlements now looks much more like exploitation, made all too easy by.

The Presidential Election of 2018 took place recently in the country. The newly elected President Mr. Ibrahim Mohamed Solih has promised during the campaign to revise the legislations on parental leave and introduction of a minimum wage as a way of regulating and improving the life of the labor force. Let’s look on the impact of introduction of a minimum wage and revision of parental leave.

One final thought about minimum wage. What could be the Maldives first minimum wage rate; a rate between MVR18/hour to 25/hour or above? Can small business survive with a rate above MVR25/hour? When the state own retirement pension scheme was established and enacted, lot of companies including state owned companies  reduced the amount of base pay by splitting it into two and allocating one half of the base pay as an allowance, all to cut cost on the amount the employer has to pay for retirement pension. This reduced the base pay to as low as MVR2000.00 for some employees. Will the introduction of a minimum wage force these employers to revise salary again? Another change foreseeable to the law in the near future is the provision on parental leave. Paid maternity leave from 60 days to 6 months, each time a female employee gives birth and one month paternity leave to male employees when the wife gives birth.

Under the section 43 and 46 of Employment Act 2/2008 of Maldives, all female employees are entitled to 60 consecutive days of paid maternity leave every time they give birth. In addition, female employees are also entitled to 28 days of additional maternity leave and 1 year no pay maternity leave upon expiration of the 60 days of paid maternity leave, should a circumstance aris

The proposal as suggested by the President Elect is more favorable to the female employees than the current national statutory protection. This will be a very constructive amendment since it will allow female employees more time to recover from child birth as well as time for nurturing.  According to Maldives housing and population census 2014-Statistical Release: iv Employment, women comprised 47.6 percent of the total Maldives labour force. This was a 6.2 percent growth when compared to 2006. Women are projected to account for 53 percent of the increase in total labor force growth by 2020. Since women form a considerable proportion of labour force at present, the benefits of a continuous career should not be denied from them upon child birth.

We find maternity protection and parental leave entitlements in almost every country. The common and central feature is that it allows employees to leave their workplace for a limited time around childbirth and to return to their job afterwards. However, the provisions vary from country to country.  The Table below shows comparison of maternity leave among different countries in Asia.

If the paid maternity leave is amended from 60 days to 6 months (180+ days) Maldives will become among the few countries with the most generous maternity leave provision. Many other countries around the world also provide paternity leave. However, fewer countries in the region have statutory paternity leave provision. Instead of dedicated paternity leave, these countries offer general emergency leave or family leave, which can be used by fathers at the time of childbirth.

Parental leave protection and other work–family measures are essential to promoting the health and well-being of mothers to ensure a core future generation, and to achieve gender equality and advancement at work for both women and men.  Of course, to achieve greater female labour force participation rates, it will require more than mere reforms to maternity benefits. Other measures could include high quality child care facilities along with flexible work time.

Extended maternity and paternity leave is an adjustment not just for employees, but for employers as well. It requires extra planning and would have to make staffing adjustments which result in added workload on other team members, may have to deal with productivity issues and cover the cost of temporary replacements.

The labour market has undergone a fundamental shift from traditional employment to a dynamic work force. This new era is fuelled by the shifting demographics, rapid technological change, greater individual choices and the global economy among others. The Internet, smart phones, tablet, and mobile cloud computing allows people to link as independent nodes across boundaries which make it possible for work to take place anywhere in the world.  Flexible work arrangement in a manner that benefits both employee and employer are more in demand by today’s generation specially by working mothers and could benefit the aging work force too.

Outdated arrangements for work and an outdated employment law will hurt economic growth. It is high time we confront the reality. Innovative and flexible solutions are key to meeting the challenges of the changing work force. Failing to change could even result in a talent shortage.

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HRM philosophy in Maldives resorts is in need of a paradigm shift

Human Resource Management (HRM) is one of the key support functions for any hospitality operation and organizations will find themselves adding and sometimes subtracting value to/from the organization by how the HRM function is driven. Trust me, I was in HR for a long time. I have seen how conventional thinking slowly became ineffective and insufficient. A lot has changed since I first started in HR. Here, I like to share some of my thoughts that I feel will make the HRM process more efficient and most importantly more effective in today’s competitive environment. Some of it has worked very well for me. I am not implying that these will solve or even fix (short term) many of the complex challenges we have in the industry today, I am saying they might be helpful in addressing some.

Accept reality – high turnover is here to stay

Facts and numbers speak for themselves. Ads for vacancies come out every day and some of these ads repeat themselves for long periods of time. We do not have enough newcomers and existing labor to fill even the immediate vacancies in the industry. We are currently looking at more than 6000 employees for resorts due to open in the next 6 to 12 months. This is already becoming a daunting task for HR teams. The pool is not enough for everyone. Find alternatives.

Don’t waste time, energy and money (and break yourself) to change reality when perception is the real issue. In the society in general and in the smaller island communities in particular, tourism is still not considered as a viable career. Nothing substantial has been done over the past 46 years to change this perception, tourism is still seen as lesser form of employment by the masses.

Discard old paradigms

One of the key guiding mantras for HR for a long time had been retention. Retain more people for longer. This sometimes makes managements bend over backwards until they fall but never achieve this objective. I have seen resorts where retention became an issue when people decide to stay for too long. Truth is, there is no perfect formula and there is no sweet spot as to how long managements should aim to retain people for. My argument is – also my advice to employees – if someone is stuck in the same position for more than 2 years and if there is no suitable role for that person to move up or at least sideways, look for new pastures, find something new before that person burns out.

All employers are not created equal

Differentiate yourself from the competition. We are all chasing the same waiter, butler or island host. Sometimes this is easier said than done. If you are not in Male’ atoll, look around the atoll community, look for any potential that you can tap into. Some resorts are parts of well-known brands and some resorts can command higher ADR thus resulting in higher monthly service charge depending on the occupancy. Some resorts have smaller teams of less than 150 team members and some on the other hand may have larger teams in excess of 500 team members. Sometimes there may be more regular ferries to one (probably the largest population center) island in the atoll. There are strengths you can leverage off, if you are a small independent brand. You must also remember that all employees are NOT created equal – instead of looking for superstars for their individual brilliance, consider people for the contribution they can make to the existing team.

Train and retrain teams to overcome biases and assumptions

Find algorithms that will work for your organization. Recruitment, selection and performance management requires more structure and more effort to eliminate ‘noise’ in the system that cloud a manager’s judgement. More often than not, essential processes like recruitment gets implicitly sabotaged by pre-conceived notions, stereotypical thinking, heuristics, assumptions and biases. HR must take the lead in training their own teams and other HoDs to make sure that they are aware of any such potential pitfalls. As much as possible, base all decisions, especially people related decisions on data and facts rather than assumptions. Look inwards, have sessions for reflection on your performance aimed at continuous improvement.

Pay more attention to engagement

Engagement will come in all shapes and forms. For some, anything that gives them a purpose will be motivation/drive enough to wake up and go to work every day. I have always used varying combinations of training, development and recreational activities for the team to achieve this. There is no silver bullet solution and there is no optimum combination – everything depends on the specific conditions of the resort, size of the team and facilities available. Don’t waste time, energy and money (and break yourself) to change reality when perception is the real issue. I have used up to 40 different training titles and of all these, I found IT (just basic computer usage, specific programs like Social Media, Photoshop, Office Applications) for the everyday user generated the most excitement! Look for activities that large groups of people can interact together, concentrate on those but do not neglect the minorities. I am starting a new strategy where I am grouping everyone by their hobbies and facilitating clubs for music, art, environmental stewardship and so on.

Efficiency is not always the same as effectiveness

Take a long hard look at your processes and procedures, think of them as vehicles that take you to your KPIs or ultimate objectives. What vehicle you choose, what vehicle will be most effective will depend on the destination itself. In Maldives you can always think of the sea transport analogy. I remember a time when resorts further away from Male’ had subjected their guests to long and grueling sea journeys. Those days are long gone – and so should some of your processes and procedures. Do these procedures add any value to your teams of operations? If not, just scrap them, or review them if you need to keep them. I am sure a lot of HR managers will find processes like yearly performance appraisals just create more paperwork and headache than anything else.

Tap into the free power source – social media

If we can get all our 100 or 200 team members work as ambassadors for us on social media that is a lot of social power! They will keep their peers/social group engaged in what is happening at the resort. This in turn creates a lot of goodwill in that social circle. Allow and encourage team members to share fun team activities on social media for maximum exposure. Publicity is always good and just like word of mouth is the best form of advertising to attract new customers, it is as good – if not a better – medium to attract new employees.

If you want to get that competitive edge over your neighbors, don’t depend on one or two initiatives – find five to ten that will each give you just few percentage points of an edge over your current situation. Find your strategic fit. I have in one of my previous blog posts, highlighted the importance of striking a balance between being people-centric or process-centric in your HRM. Some resorts can afford to be people-centric but some cannot. It is therefore important for each management to determine which approach will add most value to their HRM function. Instead of looking for the perfect, best groomed, most meritorious candidate, look for the most enthusiastic, look beyond the first impression, dig deeper and find that candidate who will fill that blank spot on your team jigsaw.

About the Author

Mr. Hassan Saeed
Resort Manager, Dhigali Maldives
Hassan Saeed is a prominent local hotelier with 25+ years of experience. He has an MBA and BA (hons) in Hospitality and Tourism Management. He has worked many local and international hotel chains in various operational and management roles in resorts. He is a guest lecturer to FHTS of Maldives National University and other colleges in Maldives.

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