COUNTRY REPORT – FIJI
Introduction
Fiji faces a number of economic and social challenges. These challenges
originate from several inter related factors. They include the coups of 1987
which brought about sweeping economic reforms, and the removal from power of
the People‟s Coalition Government in May 2000. Whatever was the motive of
the terrorist takeover of Parliament in May 2000, the political crisis destroyed an
economy that was finally on an upsurge after almost a decade of recession
ushered in by the 1987 coup.
Economic Growth
Fiji‟s economic growth have been adversely affected by political instability and
the forces of globalisation. Since 1986 there has been 13 governments as
shown below:
Period Type of Government
- April 1987 Elected democratic government
April 1987-May 1987 Elected democratic government; deposed in a military
coup
May 1987-Sept 1987 Military appointed government; deposed in another
military coup.
Sept 1987-Dec 1987 Military government.
Dec 1987-April 1992 Military appointed government.
May 1992-Feb 1994 Elected government under an undemocratic constitution;
loses budget vote and resigns.
Feb 1994-May 1999 Elected government under an undemocratic constitution.
May 1999-May 2000 Elected government under a democratic constitution;
deposed in a military-backed terrorist coup.
May 2000-July 2000 Government held hostage by military backed terrorists.
No effective government but military claims power.
July 2000 Military appointed government; in office for only 2 weeks
before being dismissed.
July 2000-March 2001 Military appointed government; resigns after a court
decision declared it illegal.
Marcy 2001-Sept Military appointed government re-appointed and backed
2001 by the military.
Sept 2001 A government formed after a national election, but the
govt. remains non-constitutional as key constitutional
provisions ignored; backed by the military.
The constitutional crisis however continues regarding the composition of
government. The Labour party successfully sort an order from High Court and
the Court of Appeal, declared that the Labour Party has a right to be in
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government. The government has since appealed and the judiciary is yet to act
on it. The Fiji Trades Union Congress is unhappy with the delay and has raised
its concern that it is an orchestrated delay in dealing with the case expeditiously.
In this context of continuously changing governments and changing policies,
investor confidence has remained low, gross domestic product growth rates and
inflation have fluctuated widely. In addition, unemployment has been rising,
currency value has been declining and real wages falling.
Labour Market
The structural transformation-taking place in Fiji has had a significant influence
on the position of its workers.
Macro data shows that the share of national income going to wages and salaries
has declined steadily. Employee compensation comprised of 48.4% of national
income in 1986; by 1996, this figure had fallen 10% to 38.9%.
In contrast, the share of profits has been rising. The 1986 operating surplus
accounted for 44% of national income; by 1996, this figure had risen to 47.3%.
the changing proportions are the result of depressed wages in the manufacturing
sector.
Wages
The unusual situation illustrated below of real manufacturing wages that decline
at a faster rate than overall wages can be explained by the feminization of
manufacturing.
Daily wages ($F), 1986-1998
Manufacturing Overall Wages
Nominal Real Nominal Real
1986 11.84 11.84 12 12
1987 12.32 11.66 12.64 11.96
1988 12.56 10.63 12.96 10.97
1989 11.36 9.06 12.64 10.08
1990 11.44 8.43 13.36 9.85
1991 12.06 8.35 14.04 9.72
1992 12.99 8.57 15.06 9.94
1993 13.92 8.73 16.08 10.09
1994 14.52 9.04 16.74 10.42
1995 15.42 9.39 17.73 10.80
1996 16.32 9.65 18.72 11.07
1997 15.12 8.65 17.52 10.02
1998 14.48 7.83 17.36 9.39
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From 1980-87, manufacturing wages on average were higher than wages in the
following sectors: agriculture, mining, distribution/hotels, community services,
social and personal services.
During the period 1990-1998, average wages in manufacturing exceeded only
agricultural wages, but that differential shrank considerably. Between 1980 and
1987, agricultural wages were 66% of manufacturing wages, whereas in 1990-
98, agricultural wages were 94% of manufacturing wages.
By 1998, real manufacturing wages had fallen 34% compared to their 1986 level.
Overall real wages fell by 22% during the same period.
Considering wages by sector, the electricity and mining industries pay the
highest wages, followed by (in descending order) transportation, construction,
community services, distribution and hotels, manufacturing and agriculture.
Considering the type of enterprise, the highest wages are paid by statutory
bodies, followed by public limited-liability companies, the central government,
local government, private limited-liability companies, NGOs, partnerships, and
individually owned enterprises as follows:
Hourly wage rate by enterprise type ($F)
1993 1997 1998
Public or statutory body 2.18 3.38 3.46
Public limited company 2.68 3.05 2.78
Central government 2.62 2.79 2.96
Local government 2.27 2.69 2.68
Private limited company 1.79 1.97 2.04
Non-profit organization 1.82 2.02 1.98
Partnership 1.60 1.89 1.80
Individual ownership 1.59 1.74 1.76
Cooperative 1.41 2.00 1.36
Other 2.24 2.24 2.42
Source: Annual Employment Survey
Employment/Policies
On the employment front, a significant increase in manufacturing sector
employment from 1991 to 1998 was attributed to the TFF‟s and preferential
market outlets for garment and several other TFF products. It appears that
garment industry growth had peaked and employment in this sector has actually
declined since 1998. After May 2000, the decline in employment in this sector
has been more dramatic. There were 89 companies employing over 12,000
people in this section in 1999. by July 2001, 10 of these had closed permanently
and approximately 1800 jobs had been lost overall (Fiji Times 27/11/01; 1).
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Between December 2001 and January, 2002 other garment factories had closed
their Fiji operations leading to an estimated job loss of 800. This trend is likely to
continue.
Low employment growth is a serious problem for the nation. On average, Fiji has
12,000 new entrants into the labour market. The formal sector, however has only
been able to create less than 2000 jobs per year. In 1999, the open
unemployment rate was 5.8 percent. By the end of 2000, this figure was
estimated to be closer to 10 percent. Previous FTUC studies had noted an
alarming tendency of increases in the long term unemployed in the mid 1990s.
this trend is likely to intensify. While there has been some recovery, as illustrated
by recent government figures and data collected from the 2001 Workplace
Employment Relations Survey, the government estimates that some 9000 jobs
have been lost since May 2000. An ILO study (House, 2001) also notes that Fiji
will continue to face job losses over the medium term.
In one of the daily papers, dated 19/02/03 the Prime Minister said that
employment has worsened from 7.8% in 1996 to 14.1% in 2002. However
opposition claim that the rate of unemployment is around 30%.
Paid Employment
Year Total (000)
1991 91.5
1992 92.5
1993 103.7
1994 95.3
1995 97.2
1996 110.1
1997 112.9
1998 112.5
1999 113.5
2000 104.0 (e)
2001 104.0 (e)
(Source: Bureau of Statistics, unpublished data)
The decline in employment is also associated with a decline in average and real
incomes. Nominal average daily wages ranged from $17-18 a day between 1995
and 1999. By the end of 2000, this had fallen to $16.00 and is likely to remain
below $17.00 a day over the next two years at least.
Beginning 2000, the government began an Integrated Human Resources
Development Programme for Employment Promotion (IHRDPEP). The
programme, sponsored and partially funded by the ILO, was aimed largely,
through not exclusively, at developing the informal sector in the country, and
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raising employment within these sectors. The project aimed to create 9,950 jobs
by the end of 2003.
One major concern which the government had when it approved the project, was
worker rights and the protection of their interests. The project contains a unit
called Labour Administration and Productivity Improvement. The proposers
assured that this unit, together with the government‟s Labour Department, will
ensure that the interests and rights of workers would be protected. There is no
information yet on the progress of the project.
Unionisation
The labour market reforms put in place in the early 1990s resulted in a severe
decline in the bargaining strength of workers. These reforms included: repealing
the mechanisms for national-level wage settlements; allowing the formation of
multiple (often plant-based) unions; withdrawing civil immunity from unions and
establishing laws that made organizing in non-unionised sectors difficult.
The consequence of these reforms has been a declining level of workers welfare.
As we have seen, real wages have been declining since 1986. A major cause of
this has been the elimination of national-level, inflation-adjusted wage
settlements.
Unionisation rates also demonstrate the impact of the labour market reforms.
Data is available only until 1995. The rates are shown below:
Unionisation rates
Sector 1985-86 1988-91 1992-95
Agriculture 14.6 12.9 12.5
Mining 12.4 26.7 65.8
Manufacturing 48.8 27.7 24.2
Electricity 32.8 25.5 25.5
Construction 54.2 64.1 45.2
Wholesale/retail/hotel 15.8 18.5 17.6
Transportation 33.2 30.5 32.4
Finance 35.3 31.6 42.3
Community services 64.8 58.8 54.9
Overall 45.2 38.4 36.6
Source: Chand, G; “Labour Market Deregulation in Fiji” in A.H. Akram-Lodhi)ed) Confronting Fiji
Futures’ Canberra: Asia Pacific Press; p. 165
The table shows the declining rate of unionization over the years. The increased
rate in the mining industry is accounted for by the creation of an in-house union
by management after it broke the Fiji Mineworkers Union in 1991. The only
sector showing any certain and notable increase in unionization is the financial
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sector where a vigorous organizing drive produced an increase in union
membership.
Labour Laws and Workers Protection
Fiji‟s labour laws were changed significantly during 1991 and 1992. Under the
World Bank and IMF sponsored policy of labour market deregulation, the then
unelected regime brought in numerous decrees to „free the labour market‟. The
essence of the changes was to limit the influence of trade unions on the
functioning of the labour market.
The key acts regulating the labour market in Fiji have been:
Wages Council Act of 1960,
Trade Unions Act of 1964,
Employment Act of 1965,
Workmen‟s Compensation Act of 1965,
Shop (Regulations of Hours and Employment) Act of 1965,
Trade Disputes Act 1973,
Industrial Relations Act
Trade Union (Recognition) Act of 1976, and
Occupational Health and Safety Act (1997)
In 1991 and 1992 the Industrial Associations Act, the Trade Union (Recognition)
Act, the Trade Unions Act, the Trade Unions Regulations and the Trade Disputes
Act were all amended substantially. These significantly weakened the trade
union movement in the country. The original legislation, and the 1990‟s
amendments, are discussed extensively in Chand (2000).
Of note, is the fact that none of these laws cover the informal sector.
Of notable important is that under the provisions of the various labour laws,
employers can informalise their workplace. To date, one major commercial bank
and a cement factory have attempted to convert formally employed workers into
formal/casual workers. The attempts have been motivated by the desire to these
organizations to reduce the impact of the trade unions in these sectors, and to
avoid paying superannuation and other work-related benefits for the workers so
made informal/casual.
Trade Union Movement
There are 36 operational trade unions in Fiji at the moment. Most of these
unions are affiliated to the Fiji Trades Union Congress. Earlier in this report, we
discussed the unionization rate in the country.
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Of the registered trade unions, only one can be regarded as being a union of
informal workers‟. The National Farmers union, a rural based union of farmers,
was established in 1977. Its membership, however, is restricted to those who
have official leases to farms. A vast majority of these leaseholders are also,
together with their immediate relatives, workers on their farms. But an increasing
number of these farmers are relying on hired workers during crop harvesting
seasons. The hired workers do not have any standing in the Union. These
workers are casual workers, working for up to 6 months at a time, but without the
benefit of superannuation contributions or protection under any of the labour laws
in the country. Limited protection, however, is provided to those hired as sugar
cane cutters under the Memorandum of Agreement between the Fiji Sugar
Corporation and the Sugar Cane farmers. The protection does not extend to job
security.
The labour laws of the country are not geared to the protection of the
casual/informal workers. This makes organizing these workers impossible under
the current laws enabling trade unions. Consequently the trade unions have
remained outside the realm of the informal sector.
To weaken the solidarity of workers, the government has sponsored another
workers center. A few of the trade union leaders disaffiliated themselves from
the Trade Union Congress to join the newly formed organization. The decision to
disaffiliate or to join a federation of trade unions rests with the members of the
union in terms of the Trade Unions Act. This has not been observed and
consequently members of some of these unions are challenging the actions of
their executive officers.
Conclusion
This country report covers several issues of interest and some of the challenges
facing Fiji today. It has not been possible to deal with each of the issues fully
however, I have tried to focus on the key concerns of ours only. I have also
attempted to give a broad perspective of the industrial relations scene in Fiji and
against that background the main labour issues have been discussed. This
paper is not an exhaustive record of all labour matters.
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