Papua New Guinea’s (PNG) Labour and Industrial Relations Secretary has announced a review of the Employment Act Chapter 373 with a particular emphasis on updating the country’s maternity leave and termination of employment provisions.

Following the review, it is likely that the Chapter 373 will be amended so that all female workers employed in the private sector will receive paid maternity leave with the same conditions applying to their spouses. Currently, only public-sector employees are entitled to paid maternity leave.

Some tightening of the circumstances in which an employment contract may be terminated is also expected.

These changes are subject to consultation with employer groups, unions, and other stakeholders.

In PNG’s private sector, terms and conditions of employment are regulated by Chapter 373, the Employment of Non-Citizens Act 2007, and a series of “common rules” that apply only in particular metropolitan areas (in particular: Port Moresby, Lae, Mt. Hagen, and Rabaul).

Maternity Leave

Currently, pregnancy and maternity leave for women employed in the private sector is regulated by Chapter 373. A female employee is entitled to unpaid maternity leave only except where the employee elects to convert recreation or sick leave credits into paid maternity leave. Chapter 373 does not provide for paternity leave.

The maternity period includes:

1. the period necessary for hospitalization prior to confinement;
2. six weeks following confinement; and
3. an additional four weeks, if following confinement, the employee is sick and is unable to carry out her employment.

In the PNG public sector, on the other hand, female employees receive six weeks’ maternity leave on full pay before delivering their baby and six weeks’ maternity leave on full pay after delivery. This contrasts with the private sector where maternity leave is generally without pay. This is expected to change following the review of Chapter 373 with maternity leave on full pay being introduced for all female employees in the private sector.

Termination of Employment

Currently, an employer may terminate a contract of service without notice or payment in lieu of notice where an employee:

1. wilfully disobeys a lawful and reasonable order;
2. commits an act of misconduct that is inconsistent with the due and faithful discharge of his or her duties;
3. is guilty of a fraud or dishonesty;
4. is habitually neglectful of his or her duties;
5. is imprisoned for a period exceeding seven days;
6. is continually absent from his or her employment without leave or reasonable excuse; or
7. is convicted of an offence or contravention of Chapter 373 or any other law relating to employment; or

In addition, an employer may terminate a contract of service without notice or payment in lieu of notice on any other ground on which the employer would be entitled to terminate the contract without notice at common law.

These termination conditions have been much abused, and employees are sometimes terminated on very questionable grounds.

Most expatriate employees and senior local employees have separate written contracts of employment with their employers, which ameliorate in whole or in part the termination provisions of Chapter 373. Many local employees, however, do not enjoy such protection.

The current government is determined to provide local employees with greater employment protection. A focus of the review presently being undertaken will be to tighten up the grounds on which a contract of employment may be terminated. In addition, it will provide for improved termination benefits, including extending the period of notice required to terminate a contract of employment and the quantum of the payments that an employee receives on termination.

Comment

PNG’s Department of Labour is keen on implementing these changes as soon as possible. It remains to be seen, however, whether the private sector will support the proposed changes to Chapter 373 and, if not, whether the government will amend Chapter 373to give effect to these changes anyway.

There is a widespread view among unions and employee groups that PNG’s current employment legislation needs to be updated to reflect PNG’s modern economy.

Written by Michael Sullivan and Vanessa Rambua of Leahy Lewin Lowing Sullivan and Roger James of Ogletree Deakins