12 Oct 2015

Vanuatu employers seek lower severance pay

7:07 pm on 12 October 2015

About 200 companies in Vanuatu say they will lobby the government for it to reduce the current severance pay of four weeks per year of continuous employment to one week.

A business company's forum in Port Vila has agreed that the amount is far too high and companies don't have the money to pay out employees if the company goes broke.

The president of the Vanuatu Chamber of Commerce and Industry, Tom Bayer, says months ago when cyclone Pam forced many companies to close, they could not afford to pay their employees severance.

Mr Bayer says the Chamber has prepared a paper asking the government to make changes.

The paper calls for employers and an employee to each pay a two-percent contribution into the Vanuatu National Provident Fund to be used as unemployment benefit.

Mr Bayer says the Vanuatu National Union of Labour, the Department of Labour and the Ministry of Labour will be consulted on the paper.

Already employees have expressed concern and hope it does not become law because such a law would favour employers and not employees.