Papua New Guinea - Minimum Wages - 2011

28 September 2011

Employment Act, Act No. 54 of 1978, dated 12 September 1978, National Gazette 1978. Published by Pacific Islands Legislation Information Institute at www.paclii.org and accessed 22 September 2011

Employment Regulation 1980, as amended to 2006. Published by Pacific Islands Legislation Information Institute at www.paclii.org and accessed 22 September 2011.

Industrial Relations Act 1962, Chapter 174. Published by Pacific Islands Legislation Information Institute at www.paclii.org and accessed 22 September 2011

Industrial Relations Regulation 1972 as amended up to 2006. Published by Pacific Islands Legislation Information Institute at www.paclii.org and accessed 23 September 2011.

US Dept of State Country Report 2010 published by the US Dept of State on 04/08/11 at http://www.state.gov/documents/organization/160098.pdf

Pacific Islands Report ’O’Neill seeks minimum wage increase to $1.54’, published by the Pacific Islands Development Program/East-West Center on 19 August 2011 at http://pidp.eastwestcenter.org/pireport/2011/August/08-19-05.htm and accessed 23 September 2011.

Post Courier ’Wage review hastened’, published by the Post Courier On-line on 21 September 2011 at
http://www.postcourier.com.pg/20110921/news03.htm and accessed 23 September 2011

Act Now article ’RD Tuna disregards workers rights and PNG laws’, published by Act Now! For a better PNG on 1 August 2011 at http://actnowpng.org/content/rd-tuna-disregards-workers-rights-and-png-laws and accessed 23 September 2011

Employee means a person serving another person under a contract of service and includes a prospective employee

Employer means a person who employs another person under a contract of service and includes a prospective employer

According to the Industrial Relations Act 1962, a Minimum Wages Board may make determinations on minimum wages. A Minimum Wages Board is made up of a chairman and not less than 4 other members. The members of the Board are appointed ad hoc for each matter that is referred to the board. If the board includes a representative or representatives of employers or employees, there must be an equal number of employees’ and employers’ representatives.

Subject to the Industrial Relations Act 1962, the Head of State, acting on advice, may refer to the Minimum Wages Board for determination any matter relating to minimum wages and conditions of employment of employees other than apprentices, including matters relating to minimum rates of pay. In referring a matter to the Minimum Wages Board, the Head of State, acting on advice, shall specify the terms of reference of the Board in relation to the matter.

A determination of the Minimum Wages Board has no effect until the date on which it is notified in the National Gazette. However, the Head of State may disallow a minimum wage determination at any time (including after publication in the National Gazette) if the Head of State finds that the determination is contrary to pubic policy or is not in the best interest of Papua New Guinea. Any such disallowance must also be published in the National Gazette and will not affect entitlement accrued up until the date of publication.

Where a registered award sets a wage rate, this becomes the minimum wage payable to relevant employees. However, where an agreement filed with the Register is inconsistent, in his opinion, with the terms of a registered determination of the Minimum Wages Board, the Registrar shall not register the agreement without the approval of the Head of State, acting on advice.

The Industrial Relations Act 1962 does not specifiy criteria which the Minimum Wages Board must consider when making its determination. However, any minimum wages determination so made may be disallowed by the Head of State on the ground that the determination is contrary to public policy or is not in accordance with the best interests of Papua New Guinea.

The Minimum Wages Board for determination any matter relating to minimum wages and conditions of employment of employees other than apprentices and persons whose minimum wages are set under the Public Services Conciliation and Arbitration Act 1969 or the Teaching Service Conciliation and Arbitration Act 1971.

Apprentices and persons whose minimum wages are set under the Public Services Conciliation and Arbitration Act 1969 or the Teaching Service Conciliation and Arbitration Act 1971 are excluded from the minimum wage determination powers of the Minimum Wages Board.

A determination of the Minimum Wages Board may differentiate between different occupations.

A determination of the Minimum Wages Board may differentiate between different industries.

A determination of the Minimum Wages Board may differentiate between different parts of the country.

Apprentices are excluded from the minimum wage determination powers of the Minimum Wages Board. There was previously a separate, lower youth wage for new entrants into the labor force between the ages of 16 and 21, but this was reportedly abolished in 2009. It is not clear whether these workers are now covered by the minimum wage determinations under the Industrial Relations Act.

The minimum rates of remuneration for piece-rate work shall be not less than those provided for by registered awards relevant to that work.

2.29 kina per hour, or 100.80 kina per week (based on a 44 hour week)

Contradictory dates reported: 2008 (Post Courier Article), April 2009 (US Department of State Country Report) and January 2010 (Act Now Article)

Minimum wage determinations may deal with any matter relating to minimum wages and conditions of employment, including matters relating to allowable deductions from wages for food, accommodation or issues supplied by employers and recruitment and repatriation costs.

Further, the Employment Act 1978 provides a list of deductions which may be made by the employer with the written consent of the employee, witnessed by a labour officer, provided that the total amount of all deductions made do not exceed 50% of the wages due. The permissible deductions are as follows:
(a) contributions to a provident, medical or pension fund or to any scheme approved by the Secretary; and
(b) food rations, clothing and other articles issued under Divisions IV.5 and 6 of the Employment Act and in accordance with registered awards; and
(c) any amount paid to the employee in error as wages in excess of the amount of wages due to him; and
(d) subject to any direction by the Secretary - an amount or part of an amount of any shortage of money due to the negligence of the employee where his contract of service provides specifically for his being employed in connection with the receipt, payment and custody of money; and
(e) in the case of an employee employed under an attested contract - deferred wages; and
(f) rental for housing provided under Part VIII of the Employment Act; and
(g) cost of repatriation where the employee is not a citizen; and
(h) any other prescribed items; and
(i) any advance paid to the employee under §87 of the Employment Act.

A casual employee shall be paid a day’s wages at the completion of each day’s employment.

By agreement between the employee and employer, an employee who is not a casual employee may be paid at intervals of not longer than one month.

An employee other than a casual employee or a piece-rate employee shall be paid at intervals of not longer than 2 weeks unless the employer and employee agree (in which case the rate of pay must be no longer than one month).

Normally, a piece-rate employee shall be paid wages in proportion to the amount of work performed either at intervals of not longer than 2 weeks or on completion of the piece-rate work, whichever is the earlier. However, where the employer and employee agree, an employer may pay a piece-rate employee at intervals longer than a fortnight but not longer than one month.

The legislation does not specify how frequently the minimum wage should be adjusted.

Labour inspectors have such duties and shall make such investigations and reports in relation to the observance of the Industrial Relations Act and of awards, common rules and registered determinations of the Minimum Wages Board as are prescribed or as the Departmental Head directs.

In order to perform such duties and investigations, inspectors are empowered, at at all reasonable times and with or without notice to any person, to:
(a) enter on and inspect any premises, land, place, building, mine, vehicle, vessel or aircraft in or in respect of which an industry or trade is carried on, work is being or has been done or commenced any matter or thing is taking or has taken place in relation to which there is an industrial dispute, an award has been made or an offence against this Act is suspected; and
(b) inspect any work, material, machinery, appliance, article, book or document in or on any such premises, land, place, vehicle, vessel or aircraft, and interview any employee in or on them or it; and
(c) examine a person who is or is believed or suspected to be an employee; and
(d) question any person in regard to any matter that in his opinion affects or may affect the employment, safety, health or welfare of employees; and
(e) require any person to produce any document in his possession or control in any way relating to employees, and take a copy of or extract from any such document; and
(f) require any person to produce any food, clothing or article in his possession or control that is issued or kept for issue to employees.

Further, every employer shall keep a record as prescribed of the wages paid to each employee and any deduction made from wages, and the reason for the deduction. This record shall be kept at the place of employment and be available at all reasonable times for inspection by a labour officer.

A person who contravenes or fails to comply with a provision of a registered award, a common rule or a registered determination of the Minimum Wages Board is guilty of an offence and liable for a fine not exceeding K100.00. In the case of a second or subsequent offence, that is a continuing offence, the person will be liable for a fine not exceeding K10.00 for each day or part of a day for which the offence continues.

A person who, without reasonable excuse:
(a) refuses or fails to answer questions, produce documents or things lawfully required under the Industrial Relations Act, or obey an order, direction or requirement lawfully made or given under the Act; or
(b) hinders or obstructs a person in the performance of his functions or the exercise of his powers under the Act;
is guilty of an offence and is liable to a fine not exceeding K100.00.

Where a person fails to obey an order, direction or requirement lawfully made or given under the Industrial Relations Act, the court imposing the penalty may, in its discretion and in addition to any penalty imposed on him, order him to be imprisoned until the order in respect of which the penalty is imposed is obeyed.