Here’s what employers need to know
Introduction
1. The Employment Relations (Amendment) Bill 2025 (Bill No. 27 of 2025) tabled in Parliament in August will bring major changes to Fiji’s employment law framework. Many of them, in our view, are not sensible. The changes, if they are passed by Parliament, will include:
- “instant fines” for employers of up to $1,000
- “absolute liability” for underpaid wages (“wage theft”) even where this occurred by mistake or oversight
- other fines and monetary penalties of up to $1 million
- jail terms for employers, including for directors of corporate employers
- making employers criminally liable for workplace issues such as sexual harassment or unjustified dismissals or “unfair” redundancies
- expanding the powers of labour inspectors, including the power to prosecute employers for failing to comply with their directives (reasonable or otherwise)
- imposing “bargaining fees” on non-unionised workers where unionised employees receive any improvement in their terms
The 106-page Bill contains 142 amendments. So the above summary only scratches the surface.
The Bill – and how we got here
2. The Bill includes changes not present in earlier drafts which were circulated for consultation, meaning they must now be revisited and looked at again in context. Earlier consultation rounds were ineffective and shrouded in secrecy for no obvious reason. Both union and employer representatives consulted in the initial drafting of the Bill were legally prevented from sharing proposed law changes with their members. So the process to formulate the Bill – on issues which affect how hundreds of thousands of people work –was poor to start with.
New and wider criminal offences
Bigger fines, stricter enforcement and jail terms for employers
3. The Bill will establish a new “civil penalty” regime[1] which adds to criminal sanctions such as fines, for the same legal breach. “Civil penalties” can be imposed for a wide range of employment law violations such as failure to provide work, unjustified dismissal without notice or failing to state reasons for dismissal (there are others). These can go as high as $100,000.
4. A new Part 21B will create a broader “fixed penalty notice” system – a sort of “speeding ticket” system for employers. Labour inspectors can issue instant fines of $1,000 for specified violations. In theory an employer (like a ticketed driver) can take the matter to court instead. However that right is illusory for busy employers (like speeding drivers) with other things to do and for whom it is more economic to pay a fine. Unscrupulous employers may instead offer corrupt incentives to inspectors to avoid fines.
5. Harsh penalties with maximum fines ranging up to $20,000 are now imposed for employers who are “reckless with respect to entering into an agreement with a worker” or for imposing an “unreasonable restraint of trade” on an employee. Employers who fail to give a worker “written reasons for termination” may be fined up to $50,000. These are all potentially subjective issues, unsuitable for criminal prosecution or civil penalties.
6. The Ministry appears to be particularly fixated on “wage theft”. Of course it is unfair for employees to be short-paid by their employers and no responsible employer would allow it. But there are many reasons why short-payments may occur. IT systems may fail, a payroll or personnel manager may misunderstand an overtime rule, or a busy SME employer may just make a mathematical error. Most mistaken payments are “made up” in an employee’s next pay or earlier. However if the Ministry chooses to prosecute, an innocent mistake is not a defence. “Absolute liability” applies.
7. Individual employers and directors of corporate employers face fines up of up to $100,000 and imprisonment for up to five years. Corporates face fines of up to $1 million. One of the best-known “short payers” of wages in recent times is the Government. Permanent Secretaries are the employers of civil servants in their respective ministries. It remains to be seen if the Ministry of Labour will enthusiastically enforce the “wage theft” rules against other Ministries.
Criminalising contractual and minor breaches
8. The new Act, if passed, will allow a court or tribunal to impose criminal liability and severe penalties, including garnishee orders and departure prohibition orders, for contractual issues which are usually civil, not criminal, in nature. Employers can now be fined for failing to justify summary dismissal (s.35A) or where an employee suffers workplace sexual harassment (s.76(1)). A worker could be sexually harassed by another worker, a customer of the employer or any other person – but the employer will pay the fine if they are found to have not done enough to prevent it. Previously prosecutions had to be brought within 12 months of the offence. This has now been extended to six years – long after an employer’s management or other witnesses may have left their jobs, meaning it is more difficult for an employer to find the evidence to defend a prosecution for a long-ago event.
9. At present grievances of this kind are resolved by an employee suing an employer in civil proceedings. The current system is undoubtedly inefficient and leave employees waiting a long time for compensation. The solution is to improve the efficiency of that system. It is not to impose poorly-defined criminal offences and civil penalties on employers.
Expanded powers of labour officers
10. The Bill would dramatically expand the powers of the Permanent Secretary and labour inspectors through new sections 19 and 19A, including authority to enter and inspect workplaces at any time, demand employment records, issue compliance and penalty notices, and enforce fines without restraint. These expanded powers lack adequate safeguards against potential misuse, potentially breaching constitutional protections against unreasonable search and seizure and the separation of powers by allowing officials to determine breaches and fines, rather than courts. Unrestricted access to workplaces could disrupt operations. The authority to impose penalties without full due process might lead to inconsistent enforcement. It will be an offence not to follow labour officers’ directives, regardless of how unreasonable, impractical or unfair they may be. An environment of arbitrary enforcement instead of one governed by reason and logic creates the potential for abuse and – usually not far behind it – corruption.
New rules on employee termination
Unfair Dismissal (Section 35C)/ Genuine Redundancy (Section 35F)
11. The Bill introduces new unfair dismissal protections. There is nothing wrong with ensuring that an employee is fairly treated and heard out before losing his or her job. However the rules must be easy to understand, including for employers. A dismissal is now unfair if it is “harsh, unjust or unreasonable” and not a case of genuine redundancy. Section 35E establishes detailed criteria for assessing whether a dismissal is harsh, unjust or unreasonable, including:
- providing a valid reason related to the worker’s capacity or conduct
- worker notification of the reason prior to dismissal
- being given an opportunity to respond
- unreasonable refusal of a support person
- adequacy of warnings for performance issues
- any other relevant matters
There is already a significant body of law around ‘unlawful’, ‘unjustified’ and ‘unfair’ terminations of employment. The new law will now create a new set of rules, meaning that employers will have to re-think their disciplinary processes.
12. The Bill introduces a new concept of “genuine redundancy” with strict requirements for establishing that a redundancy is legitimate. A dismissal is only genuine redundancy if:
- the employer no longer requires the job to be done by anyone due to operational changes
- it would not have been reasonable to redeploy the worker within the employer’s enterprise or associated entities.
Increased redundancy protections
13. Redundancy notification/consultation periods will be doubled from 30 to 60 days. Redundancy pay is increased to 3 months’ wages plus 2 weeks’ wages for each year of service. Previously it was one week for every year of service.
Increased leave entitlements
14. The Bill:
- increases the minimum annual leave entitlement from 10 to 12 working days (s.59) and
- reintroduces family care leave (s.68A) of 3 days per year.
The Bill includes various enhancements to parental leave entitlements, including extended periods and enhanced protections against dismissal during leave periods.
Employment Relations Fund (Sections 20A-20D)
15. A new Government-funded Employment Relations Fund will be established to fund compensation payments to workers, pay amounts decided by tribunals and courts for unpaid wages, cover costs of unforeseen events causing worker detriment and fund the administration of the Act.
Trade union provisions and “bargaining fees”
16. The Bill simplifies trade union registration processes. It removes various administrative requirements that previously provided oversight of union activities. It also introduces a controversial “bargaining fee” system under which non-union workers must pay fees, equal to 12 months of union subscriptions, if they benefit from better employment terms agreed between the employer and the union. This is a Government attempt to resolve union complaints about “freeloading” non-union members. However it rests on the assumption that any improvements in employment terms have been won by the union– even cost of living adjustments which an employer may have paid regardless of union claims. It introduces the unusual prospect of workers paying union dues to unions they have not joined.
Impact on employers
17. The cumulative impact of these changes will be substantial for all employers. However special challenges will arise for medium-sized businesses and SME employers. The rules are the same for all employers, big and small. Large employers will have the money and staff resources to understand and implement systems to deal with the new laws. Smaller employers will struggle to do this and will be easy targets for newly-empowered labour inspectors.
18. All employers will need to review and update:
- employment contracts: to comply with new dismissal processes and new provisions
- payment systems: to comply with timing and record-keeping requirements
- policies: to incorporate new leave and enhanced parental leave entitlements
- redundancy procedures: to comply with enhanced notice and consultation requirements
- record-keeping systems: to meet comprehensive new documentation requirements
19. Significant investment will be required in:
- training: managers, HR staff, and directors
- system upgrades: to ensure accurate wage calculation and record-keeping
- policy development: to address new procedural requirements
- auditing: to identify and address potential compliance issues
20. The severe penalties require enhanced risk management approaches, including director and officers’ liability insurance, regular legal reviews, incident response procedures and documentation protocols to ensure adequate records for potential investigations.
Conclusion
21. Fiji’s employment laws are overdue for reform in many ways. Not all the changes in the Bill are bad. Some reflect Government policy decisions on matters such as leave, redundancy and restraints of trade to which employers will need to adapt.
22. However other changes – particularly the ones which attempt to use criminal law as a blunt instrument to improve employee rights – are poorly targeted and work against good regulation. They reflect a mindset in which all employers are treated as “big and bad” and must be threatened with fines and imprisonment to follow the law. The Ministry’s solution is to give more power to its own officials to ignore due process and fairness.
23. The new law will impose new costs and risks on employers. It will discourage employers from employing staff and it will burden SME employers especially. They do not have the money to pay for systems and advice to help avoid new and unreasonable risks.
24. In short, the Employment Ministry needs to re-think its attitude and approach to the unusual new criminal measures it wants to enact. It seems evident that the Ministry (and perhaps labour organisations) are frustrated that current employment laws are slow and cumbersome to administer and enforce. While in many cases that is true, there is a better solution – do the necessary work to make the current rights-based employment law system more efficient. Instead the Ministry’s solution is to believe it should change the law to selectively bypass fairness and due process where it suits, by targeting many employer breaches or mistakes with instant fines imposed by civil servants, not courts. These have the potential to encourage arbitrariness, unfairness and corruption. Some of these law changes may breach basic constitutional rights. Many will produce the opposite outcome of what is intended – arbitrary laws, poorly enforced, which unscrupulous employers will actively subvert, with resulting harm to workers – the very people who are supposed to be protected.
25. For any questions on this legal alert, please contact Jon Apted, Ronal Singh, or Glenis Yee.
[1]Part 21A