Thirteenth month pay has once again been suspended across the board, following the National Assembly’s approval of the Employment Suspension of Thirteenth Month Pay Act (2021).

It was during a lengthy session that members debated over the legislation presented by Minister for Employment and Social Affairs Patricia Francourt to suspend the employee benefit for this year.

“Unfortunately, once again, as was the case in 2020, this year it will not be possible to pay a thirteenth month pay. The Covid-19 pandemic shook our economy really hard, like other countries in the world, big or small. As a small country, our economy is slowly improving, but we have not yet reached the level it was at before Covid-19. There is still a lot of uncertainty at this point, and as per our observations, nothing is guaranteed,” said Minister Francourt.

“Numerous businesses from the private sector were still receiving assistance under the Financial Assistance for Job Retention (FA4JR) scheme up until March this year, and this is an indication that many will not be able to honour the obligation under the law to pay a thirteenth month pay for this year,” Minister Francourt stated.

As per statistics provided by the minister, the volume of applications for redundancies has reduced considerably, with 245 applications in 2020, and only 104 this year, between January and October, a sign that businesses are recovering and willing to retain employees.

The minister also said employment creation has improved over recent months, necessitating that businesses are “given some time to recuperate, so more employment is created, and persons not in employment can have access to such opportunities”.

 “According to our calculations, it will cost government around R142.7 million if it pays a thirteenth month pay to all public service employees for the year. This does not include employees in parastatal organisations. We will consult that this amount is extremely high and the country cannot afford such an expense presently,” the minister stated, noting that the decision is in the interest of the country.

She went on to note that thirteenth month pay was introduced in 2015 as an incentive for public sector employees, and was applied to the private sector in 2016. As per the law, a thirteenth month pay equates an employee’s regular salary, excluding allowances and employers were obligated to have effected the payments by January 31 the following year. It must be noted that government has in the past stepped up to assist business organisations not in a position to do so.

Government in 2016 forked out around R72 million, in 2017 around R98.6 million, in 2018 an estimated R101 million. Finally, in 2019 forked out R94.6 million only for public service employees. The law provides for employers who can afford to do so to remunerate their employees with the pay.

Not surprisingly, the proposed legislation sparked heated debates and exchanges between assembly members, with the opposition, United Seychelles (US), pointing out that the present administration has seized all opportunities to celebrate economic recovery and the cost savings made since it assumed power last year, strongly questioning the decision to not remunerate citizens.

Hon. Audrey Vidot, US elect for Roche Caïman, from the outset strongly stated that she will not be voting in favour of the Bill.

Similarly, Hon. Johan Loze said he will not be part “of this act of betrayal against our citizens”.

They also highlighted the fact that employees were crucial to the slowly recovering economy, and that instead of having a vision for businesses, government should adopt a stance which favours employees.

Leader of the opposition (Loto) in the National Assembly Sebastien Pillay implored government to reconsider the Bill and to compromise to offer at least 50 percent of the pay to public servants.

Meanwhile, Linyon Demokratik Seselwa (LDS) representatives argued in favour of the legislation, on account of the economic downturn and the macro-economic reform programme with the International Monetary Fund (IMF). Chief whip and Bel Ombre elect Sandy Arissol also made mention of government’s efforts to reduce the cost of living in the interest of citizens.

Leader of government business Bernard Georges deemed the decision as “brave, unpopular and in the national interest”. Hon. Georges also looked to US, suggesting that they could have proposed to the assembly an amendment to the benefit of workers instead of simply criticising government’s decisions.

In rounding up, Minister Francourt gave her assurance that government will be responsive to the improvements in the economy.

She also informed members that government is in the meantime working to establish a performance-based bonus scheme, dependent on employee’s performance.

Secretary of state in the Ministry of Finance, Economic Planning and Trade Patrick Payet before concluding the session spoke of the first progress report published by IMF earlier this week.

He noted that IMF is satisfied that government was able to meet and to some extent surpass some of the indicators.

IMF however acknowledged that challenges remain, with the domestic economy being an open one and vulnerable to external shocks.

“We know the pandemic is still persisting, so there are still some remaining risks. Our competitors, for instance other countries that are reopening their borders is leading us to question whether we will be able to attract the volume of visitors anticipated for next year. These are all vulnerabilities and we are yet to recover as we had expected,” SS Payet stated.

Eventually, all US members voted against the Bill, while 22 LDS members afforded their support for the Act.

The assembly is to convene tomorrow morning for the budget presentation by Minister for Finance, Economic Planning and Trade Naadir Hassan.

Laura Pillay