Micro, Small, and Medium Enterprises (MSMEs) in Fiji, which contribute significantly to the nation’s economy—accounting for 18 percent of the Gross Domestic Product (GDP) and employing around 60 percent of the workforce—are expressing serious concerns regarding the Employment Relations (Amendment) Bill 2025 in its current iteration. The MSME Council, part of the Fiji Commerce and Employers Federation (FCEF), is calling for the government to revert the Bill to the Employment Relations Advisory Board (ERAB) and allow for a more collaborative negotiation process to produce a better-suited legislative framework.
The National Development Plan (NDP) aims to elevate the contribution of MSMEs to 22 percent of the GDP by 2029. However, the current provisions within the Bill have been deemed counterproductive to these goals. The council released a statement highlighting that most MSMEs operate within rural and informal sectors, facing significant challenges in transitioning to formal operations. They argue that provisions such as criminalization of contract breaches, strict liability, and increased leave entitlements are likely to deter rather than encourage MSMEs from formalizing their businesses.
MSMEs are grappling with a myriad of challenges, including high operational costs, compliance issues, skills shortages, and the impacts of climate change, all of which have been acknowledged in discussions at the recent National Economic Summit held by the government in 2023. The Bill is criticized for assuming all businesses can adhere to stringent labor laws designed for larger enterprises, which may not be feasible for small businesses operating on tight margins.
In addition to these sentiments, the Fiji Commerce and Employers Federation had previously rejected similar provisions in the draft Employment Relations Bill, arguing that inadequate public consultations led to insufficient dialogue. Focus was directed on the detrimental impact the proposed amendments could have on employment opportunities and overall business sustainability.
Moreover, significant penalties have been highlighted in discussions around the Bill, including fines potentially reaching $500,000 and prison sentences of up to 20 years, which could severely impair the operation of MSMEs. These high stakes have raised alarm within the MSME community and its coalitions, who fear that such measures contradict the government’s efforts to foster a supportive environment for small businesses.
Despite the challenges, there remains hope for reform. The MSME Council, alongside other business organizations, is emphasizing the need for transparent dialogue and fair legislation that not only protects workers’ rights but also considers the economic realities of MSMEs. Enhanced collaboration between government entities and stakeholders is crucial in achieving a working balance that encourages sustainable economic development, thereby supporting the overarching goals of the National Development Plan.