Employment contracts, superannuation and industrial relations in Papua New Guinea

Welcome,

An overview of employment contracts, industrial relations, superannuation and cultural factors related to living and working in Papua New Guinea.

Employment contracts and industrial relations

It is not appropriate or smart to assume that what works in your own country or in other developing countries will work in PNG. Employers therefore are advised to research relevant legislation and join the Employers Federation of Papua New Guinea (www.efpng.org.pg). The Federation is a very helpful organisation with reasonable annual fees and can provide excellent advice to member companies on relevant awards, employment contracts, labour laws and industrial relations issues pertaining to citizen employees.

Employment contracts are expected for most roles, and advice from the Employers Federation or from one of the many quality legal firms in PNG is recommended.

Unions exist in PNG, and there is an active Papua New Guinea Trade Union Congress. Union labour may apply to your situation. Again, research is recommended.

The National Wages Board sets the National Minimum Wage for the country.

Superannuation

Superannuation is only compulsory in companies that employ 15 workers or more, although employers with smaller numbers of workers may participate voluntarily.

Employees must have worked for at least three months to be eligible for superannuation.

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Superannuation contribution consists of two components:  the employee’s contribution (currently seven percent of pay) and the employer contribution (currently 8.4% of pay).

PNG’s superannuation industry is governed by the Superannuation (General Provisions) Act 2000.

(See also KPMG’s Superannuation tax considerations related to PNG.)

Cultural factors

Employers are encouraged to appreciate the cultural uniqueness of PNG and to show awareness of this in human resources policies and procedures.

PNG is a very diverse nation with more than 850 languages: it is quite possible that every person you pass in the street may speak a different language, look different and have different deep-seated views on how things are to be done. It is important to respect people and their cultures and traditions. However, workplace standards and rules can be made and enforced.

Like all workplaces, well thought-out and well-communicated policies are usually very successful.

English is the language of formal business. However, there are three official languages: Tok Pisin, Motu and English. Tok Pisin is the most widely and commonly used language, and efforts to learn this language will definitely enable broader communication with a wider range of Papua New Guineans.

Non nationals from non-English backgrounds are expected to be able to communicate well in English.

This article prepared by Scott Roberts (Managing Director, Pacific People Solutions) and George Griffin (Managing Director, CC Pacific).

Comments

  1. Semane Bago says

    Thank you.

    Is there any law for short term employment under casual contracts in big companies that anyone employee engaged under casual contract must still undergo superannuation contribution after 3 months of engagement even though the work duration would be for 5 months or less than year ?

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