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Cablegate: Maldives: Employment Bill Ratified Amid Concerns

VZCZCXRO5866
RR RUEHLMC
DE RUEHLM #0719/01 2070519
ZNR UUUUU ZZH
R 250519Z JUL 08
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 8470
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHNE/AMEMBASSY NEW DELHI 2187
RUEHKA/AMEMBASSY DHAKA 1020
RUEHIL/AMEMBASSY ISLAMABAD 8011
RUEHKT/AMEMBASSY KATHMANDU 6188
RUEHKP/AMCONSUL KARACHI 2370
RUEHCG/AMCONSUL CHENNAI 8616
RUEHC/DEPT OF LABOR WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS SECTION 01 OF 03 COLOMBO 000719

SENSITIVE
SIPDIS

STATE FOR SCA/INS AND DRL/IL FOR TU DANG
STATE AND GENEVA PLEASE PASS TO USTR
DOL/ILAB FOR TINA MCCARTER
MCC FOR S GROFF, D NASSIRY AND E BURKE

E.O 12958: N/A
TAGS: ECON ELAB EAID ETRD PHUM SOCI MV
SUBJECT: MALDIVES: EMPLOYMENT BILL RATIFIED AMID CONCERNS

1. (U) Summary: The President of Maldives recently ratified an
employment bill which sets new rights and responsibilities for
workers including a minimum wage, a limit on weekly working hours,
and the establishment of an institution to resolve
employment-related disputes. The legislation was criticized by the
Ministry of Employment and local industry bodies for exempting
workers at resorts. Industry leaders argue that the new laws are
too broad to appropriately apply to each industry and that the new
administrative procedures will adversely impact small to medium
enterprises. The Ministry and industry bodies are separately
creating proposals to reflect these concerns. Meanwhile, government
efforts are underway to inform the public of new legislation and to
establish three new labor-related authorities within two months of
July 11, the date the bill came into force. The government plans to
join the International Labor Organization (ILO) by end 2008. End
summary.

NEW WORKER RIGHTS
-----------------

2. (U) The Maldives employment bill passed a parliamentary vote in
April 2008, was ratified by the President on May 26, and came into
effect on July 11. The bill was drafted based on principles of the
International Labor Organization (ILO), which Maldives reports it
intends to join by end 2008. As the country's first comprehensive
employee rights package, the legislation brings local and expatriate
workers under one law and consolidates industrial regulations.
Salient features of the bill include: a ban on forced labor and
discrimination; minimum age for employment set at 16; a maximum
48-hour work week with entitled leave; a minimum wage; a code to
discipline and dismiss employees; regulations on employee contracts;
a workplace ethics code; and a rview of employment agencies.
(Note: To date, th final legislation has not been officially
translted into English from Dhivehi; however, unofficialEnglish
translations were created by and for indstry representatives.)

3. (U) The legislation aso establishes a labor relations authority,
a laor tribunal, and a minimum wage board. The Ministr of
Employment is responsible for setting up eac of these groups and
will determine its organizaion, rules, operation, procedures, and
membershi. Once established, however, the labor relations
authority and tribunal will be independent from the Ministry, and
the board will report directly tothe Minister of Employment on an
ad-hoc basis. he seven-member labor tribunal will mediate and
esolve disputes between employer and employees in the public sector
and across all industries (except resorts) in the private sector.
The President of Maldives appoints the chairman of the tribunal.
The ten-member labor relations authority will enforce the law and
labor regulations. A three-member wage board, appointed by the
President, will advise the employment minister on setting minimum
wage rates per industry. The Ministry hopes these respective groups
will be established by early September.

AWARENESS CAMPAIGNS
-------------------

4. (U) The Ministry is engaged with local media to promote the new
rights and responsibilities accorded to all workers. Outreach to
the public began before the bill was ratified, and has since
increased. The Ministry encouraged employees to form
industry-related associations so that it can reach more workers via
targeted outreach seminars.

PRESIDENT WELCOMES AMENDMENTS
DESPITE CONCERNS
-----------------------------

5. (U) The People's Majlis (parliament) passed the employment bill
with eleven amendments to the original document. There were
initially 46 amendments proposed; members of parliament agreed to
continue discussing the remaining 35 following the bill's passage.
According to local reporting, President Gayoom, acknowledging the
bill's shortfalls, stated that he ratified a bill that necessitates
amendments because he believed that a problematic bill is better
than none. Gayoom also said he welcomed future amendments and
proposals by industry bodies.


COLOMBO 00000719 002 OF 003


NOT FAR ENOUGH: RESORT WORKERS OVERLOOKED
-------------------------------------------

6. (U) Although most of the eleven amendments passed were minor and
editorial in nature, the last-minute exclusion of resort workers
from certain basic rights - including maximum working hours and time
slots for meal, prayers, and breaks -- caused a great deal of
controversy. The legislation already exempted people working in
emergency services, seagoing vessels and aircraft, seaports and
airports, industrial islands and executive posts from these
requirements. A legal officer from the Ministry of Employment
explained that these workers (with the exception of executives) are
covered by international conventions that Maldives recognizes.

7. (U) To date, there has been no official explanation as to why the
Majlis extended the exemption to resort staff. However, several
members of Parliament are owners or part-owners of resorts, which
may explain the exemption. The action drew extreme criticism from
some MPs. Workers at the 90+ tourist resorts in Maldives represent
the largest economic sector in the economy (as a portion of GDP).
One local paper quoted Minister of Information Mohamed Nasheed
saying that the exemption was "necessary in order to allow the
industry to prosper, and that employment packages were 'different'
at resorts as each hotel maintains their own contractual agreements
with their employees, which are not regulated by the government.
The Ministries of Employment and Legal Reform submitted an amendment
to overturn this provision on July 17.

TOO FAR: INDUSTRY CONCERNED ABOUT IMPACT
------------------------------------------

8. (U) Numerous industry bodies, including Maldives National Chamber
of Commerce and Industry, Maldives Association of Tourism Industry,
and Maldives Association of Construction Industry, are working
together to propose changes to the legislation out of concern it
will adversely impact local businesses. Industry contends that the
new laws fail to distinguish different scales of enterprises within
the employment market, that they are too broad (i.e., "impractical
and archaic"), and not specific enough to each industry. Industry
leaders argue that the legislation favors employees and does not
take into consideration the general rights of the employers. For
example, industry representatives contend that the eight hour work
day with required overtime pay will be a problem in the construction
field, where tasks require 14 straight hours to complete. Industry
seeks a "friendly and flexible" set of revisions that would provide
greater discretion to employers and employees to set the conditions
of their contractual agreements, including labor grievances, number
of maximum hours, and leave allowance.

9. (U) Industry leaders also claim that the new laws will adversely
impact small to medium scale enterprises which do not have the
resources to handle the new administrative requirements required for
labor disputes or the maintenance and provision of employment and
salary records. Industry also wants participation by its
representatives on the new labor tribunal, minimum wage board, and
labor relations authority.

COMMENT
-------

10. (SBU) Although more work is needed to ensure both implementation
and compliance with international labor standards, the passage of
Maldives' first comprehensive employment legislation is a positive
step. (While the law does not provide for certain basic workers'
rights promoted by the ILO such as freedom of association and the
right to organize and bargain collectively, these are addressed in
Maldives' new constitution, which is pending ratification.)
Maldives stated desire - as noted publically by the Foreign Ministry
and Attorney General - to join the ILO in 2008 is also encouraging.
The ILO Director in Sri Lanka told EconOff that she is confident
that Maldives will achieve ILO membership by end of the year. In
late June, Maldives' Acting Minister of Employment participated at
the International Labor Conference in Geneva and met with the
Director General of ILO. Maldives will also be participating in
several ILO-sponsored conferences in Sri Lanka this year.

11. (U) The Ministry has welcomed the proposed labor law seminar

COLOMBO 00000719 003 OF 003


sponsored by the American Center for International Labor Solidarity
and funded by DRL, and requested that all Maldives stake holders
participate, including workers associations, employers associations,
the media, the Human Rights Commission, the Civil Service
Commission, Maldives Police Service, representatives from the major
employers, the Presidents Office, the Ministry of Justice, the Civil
Court, and the High Court. Post will coordinate with DRL and ACILS
on seminar organization.

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