Micro, Small, and Medium Enterprises (MSMEs) in Fiji, which are vital to the nation’s economic landscape—accounting for 18 percent of the Gross Domestic Product (GDP) and employing about 60 percent of the workforce—are expressing significant concerns about the Employment Relations (Amendment) Bill 2025. The MSME Council, a segment of the Fiji Commerce and Employers Federation (FCEF), is urging the government to send the Bill back to the Employment Relations Advisory Board (ERAB) for further collaboration, aiming to craft a more favorable legislative framework.
The National Development Plan (NDP) seeks to boost the contribution of MSMEs to 22 percent of GDP by 2029, yet current stipulations in the Bill may hinder these aspirations. The council’s recent statement pointed out that most MSMEs operate in rural and informal sectors, facing substantial hurdles in formalizing their businesses. Provisions like the criminalization of contract breaches, strict liability, and expanded leave entitlements are seen as discouraging rather than empowering for MSMEs looking to transition into the formal economy.
These small enterprises face numerous hurdles, including elevated operational costs, compliance complexities, skills shortages, and the effects of climate change. The government addressed such challenges at the National Economic Summit in 2023. Critics of the Bill argue it imposes labor standards better suited for larger companies without considering the realities of small businesses, which often function with razor-thin profit margins.
The FCEF has previously voiced similar objections to aspects of the draft Employment Relations Bill, citing a lack of adequate public consultations and a failure to engage in meaningful dialogue. They warned about potential adverse effects on employment rates and the overall viability of businesses.
Concerns have also been raised regarding severe penalties outlined in the Bill, with potential fines surpassing $500,000 and prison sentences of up to 20 years, which could decisively harm MSME operations. Such alarming stakes have sparked fear among the MSME community and its allies, who worry these measures contradict the government’s goals of fostering a supportive environment for small businesses.
Despite these challenges, there’s a glimmer of hope for reform. The MSME Council, in partnership with other business entities, is advocating for transparent discussions and fair legislation that safeguard workers’ rights while recognizing the economic conditions affecting MSMEs. Cooperation between government bodies and stakeholders is essential for striking a balance that not only promotes sustainable economic growth but also aligns with the broader objectives of the National Development Plan.