Definition Of Foreign Labour Commerce Essay

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Chapter 2 presents the literature review of the study about the definition of foreign labour, the Mauritius economy, the Export Processing Zone (EPZ), recruitment/selection/retention of foreign labour, the legal framework, motivation, culture, benefits of foreign workers, problems of foreign workers and finally the conclusion.

2.2 Definition of Foreign Labour

The term 'foreign employee' is defined as general an employee who is a non-citizen (K. Rajkumar 2001). Miller (1991) used the term 'foreign workers' as these persons come from a confuse nationality groups, living and working with diverse legal status in a particular country.

In Mauritius foreign labour are considered as guest worker so, according to Section 2 of the OCCUPATIONAL SAFETY AND HEALTH ACT 2005 "guest employee" means an employee of foreign nationality who has migrated from his country with a view to being employed on contract, otherwise than on his own account, and includes any person regularly admitted as a migrant for employment.

2.3 The Mauritian Economy

The Mauritian Economy has one of the highest standards of living in Africa. Since independence in 1968 it enjoyed constant growth and reached GDP per capita of RS 267300 in 2012. The traditional instruments of development in Mauritius have been sugar in the 1970s and 1980s, Mauritius has been undertaking economic growth, shifting from an agricultural sector to textiles, and later on the tourism sector. But more recently, Mauritius has diversified into financial services and information technology sector.

Furthermore, Mauritius has the best competitive markets, ranked first in Africa, and 54th worldwide (World Economic Forum's 2010-2011 Global Competitiveness Report). Mauritius is now a middle-income country as a result of good economic performance, and ranks 20th worldwide, out of 183 economies in all in terms of overall ease of doing business (World Bank's 2011 Doing Business report. The economic track record of Mauritius is the product of its sound institutions, good level of human capital and preferential access to the European Union (EU) market for its key exports.

Along the way, Mauritius has benefited from trade agreements, such as the Lomé/Cotonou conventions (which give preferential access to Mauritius exports to the European market), the Multi-Fibre Arrangement (MFA) (which has allowed Mauritius to build up its garment industry by restricting the garment exports from mostly Asian countries), recently thr US African Growth and Opportunities Act (AGOA).

2.4 History of Export Processing Zone (EPZ)

The EPZ sector has achieved good position since its independence in Mauritius, in 1970's. Moreover, the government had worked persistently to create this sector a compromising one for the economic growth and development of the country. The EPZ sector has attracted two thirds of all FDI inflows, which were mainly concentrated on knitwear and garments production. Generally, the EPZ has provided employment, contributed more value-added and earned more export revenue than sugar. Besides, Mauritius offers a favourable business environment, with strong incentives provided by the state for the rising sectors, and careful demand management. The Mauritian EPZ evolved as a driving force sector to attract foreign workers to work in the textile sector.

The EPZ has helped to transform the economy where manufacturing for export has become the leading field. Moreover, at present the EPZ industries are facing a number of problems such as the vulnerability of the garments industry to demand fluctuations and labour shortage of local to compete with competition in the exports.

2.5 Recruitment/Selection/Retention of foreign labour

2.5.1 Recruitment and Selection

The process through which a company hires their new employees is called recruitment and selection by Francesco and Gold (2005) Recruitment can be defined as "searching for and obtaining potential job candidates in sufficient numbers and quality so that the company can select the most appropriate people to fills its job needs" by Dowling and Schuler(1990, cited in Beardwell and Claydon, 2007) ). The selection process comprises of the gathering of information for evaluating and deciding who is best suitable for a particular jobs. The recruitment and selection process is of great importance, and it is often very difficult.

The foreign worker recruitment process is basically launched following a firm request for labour, but the local market is searched first before the recruitment of foreigners. The demand has to fall within the shortage area setup by the Ministry of Labour (MOL). However the recruitment exercise is done through specialized recruitment agencies and their foreign agents. In their own country the candidates are called, interrogated and selected through a foreign agent and the shortlisted ones are sent to the local factory. Meanwhile the application for work permits is sent to the (MOL) by the employer, with the required documents shown in Appendix 1.

After the documents are treated successfully, that is the work permits issued locally, the foreign worker may embark to Mauritius, they are directed towards their workplace.

2.5.2 Retention

The retention plan should be based on an analysis of why people leave. A retention strategy takes into account the particular retention issues the organization is facing and sets out ways in which these issues can be dealt with. This mean accepting the reality, as mentioned by Cappelli (2000), that the market, not the company will ultimately determine the movement of employees.

A study of Holbeche (1998) found that the factors that aided the retention and motivation of high performers included providing challenge and achievement opportunities, mentors, realistic self- assessment and feedback processes.

In several organisations, when a foreign worker reaches Mauritius, his passport is being taken for safe custody.

2.6 Legal Framework

During the last decade several laws or legislations has developed governing employer and employee relations and the rights of employees and employers in the workplace In Mauritius the IRA and the Labour Act, which have been enacted for the past 35 and 33 years respectively, have been instrumental in the economic and social development of the country. With the challenges caused by globalization, the Employment Relation Act 2008 (ERA 2008) and the Employment Rights Act 2008 (ERA 2008) brought fundamental changes in the legal and institutional framework and responded adequately to the economic imperatives and seems to better protect workers, promote effective collective bargaining and strengthen tripartism and social dialogue.

The Employment Rights Act focuses on the workfare programme for laid-off workers and has as objective to associate the law relating to employment, contract of employment, hours of work, payment of remuneration and the other basic terms and conditions of employment to ensure appropriate protection of workers. This initiative of the Ministry follows its ratification of international conventions working for the recognition of the fundamental rights of workers, including their basic human rights.

The last official Report on the Employment of Foreign Workers in Mauritius, made in 2008 by the National Economic and Social Council (Nesc) states that 'without conferring a right to residence or citizenship foreign workers should be able to enjoy the same status as their Mauritian counterparts thereby bringing more homogeneity in the entire labour force'. However, for foreigners to be able to work in Mauritius, the employers have to obtain a worker permit duly issued by the MoL. Work Permits in respect of expatriate workers are issued by the Employment Division of the Ministry of Labour, Industrial Relations and Employment under the Non-Citizens (Employment Restriction) Act and it is to be delivered with a minimum delay of two weeks.

The MoL amended the Labour Act in 2008, ensuring that Mauritian and foreign workers benefit from the same rights, working conditions and have the same basic salary scale. Article 32 of the Employment Relations Act (2008) also gives foreign workers the right to join a trade union. This change in law and policy follows the ratification of international conventions calling for the recognition of the fundamental rights of workers, including their elementary rights (NESC, 2008).

The MoL announced the establishment of the Special Migrant Workers' Unit to serve the migrants by vetting their contracts and monitoring their work and living conditions. This Unit has 7 members of staff and the work of the officers is divided between administrative work and field work. The Special Migrant Workers' Unit also has a Chinese interpreter. Officers of this Unit are required to inform workers about their rights, especially to join a trade union of their choice, right to assistance from the Special Migrant Workers' Unit, right to be assisted by an officer in disciplinary procedures. In fact, whenever an employer decides to terminate the contract of employment of a migrant worker, he/she is immediately deported.

2.6.1 The contribution of the International Labour Organization (ILO)

The ILO's Mandate and Migrant Workers:

Since 1919, the ILO has maintained and developed a system of international labour standards aimed at promoting opportunities for women and men to obtain decent work in conditions of freedom, equity, security, and dignity. In today's globalized economy, international labour standards, and the setting of new standards, are an essential component in establishing an international framework for ensuring that the growth of the global economy provides benefits to all. The ILO has been concerned since its foundation with the condition of migrant workers since its foundation. The preamble of the ILO Constitution refers to the need for the "protection of the interests of workers when employed in countries other than their own". The ILO's second Recommendation, adopted in 1919, was about migrant workers. The Declaration of Philadelphia (1944), part of the ILO Constitution, demonstrates the continuing concern with migrant workers. Two key ILO Conventions: - Convention No. 97 Migration for Employment (Revised), (1949) (No.97) and Convention No. 143 Migrant Workers (Supplementary Provisions), (1975) (No. 143) -deal specifically with the protection of migrant workers. While all ILO Conventions, unless otherwise stated, apply to migrant workers, some are particularly relevant, such as those ILO standards in the areas of fundamental rights, social security, and employment, conditions of work, and occupational safety and health.

The Mauritian government has not ratified the 'International Convention on the Protection of the Rights of All Migrant Workers', also known as the 'Migrant Workers' Convention'. The Mauritian state has tended to respond to complaints and protests of foreign workers and reports in the press by sending high-level officials, at times the Minister of Labour, to meet protesting migrants and their employers. Such action is considered to be largely insufficient, hence the claim for Mauritius to ratify the 'Migrant Workers' Convention' which would ensure that the specific dangers that migrant workers and their families face are addressed and their rights properly respected (L'Express, 30.07.10) in Appendix 2.

2.7 Motivation

Motivation is considered as closely related to the performance of human resources in modern organizations. In management, there are numerous theories about what motivates people, however, it is often neglected that what motivates people is culturally determined. Incentives and de-motivators used in human resource management policies are highly cultural specific.

2.7.1 Hierarchy of Needs- Maslow

Figure 2.0 Maslow Hierarchy of Needs


The most famous classification of needs is the one formulated by Maslow in 1954. He put forward five major need categories which relate to people or workers, starting from the fundamental physiological needs and leading through a hierarchy of safety, social and esteem needs to the need for self-fulfillment, the highest need of all.

According to Armstrong, Maslow's theory of motivation states that when a lower need is satisfied, the next highest becomes dominant and the individual's attention is turned to satisfying this higher need. The need for self-fulfillment, however, cannot be fulfilled whereas psychological development occurs as people move up the hierarchy of needs.

The effects of Maslow's theory are that the higher-order needs for esteem and self-fulfillment provide the greatest drive to motivation. However, the workers job will not necessarily fulfill their needs, especially when they are routine or deskilled.

2.8 Culture

According to Hofstede and Pedersen (2002) the national culture distinguishes people from one country from those of another country. The management of culture differences in developing countries is an essential ability that all managers must master if they are to be successful in the market. Thus Managers must make the foreign workers to adapt to the different cultures so as they can work efficiently.

Hofstede (1984) defines culture as "collective programming of the mind which distinguishes the members of one human group from another". In general people only become aware of their own beliefs while they are challenged by someone of other culture (Gooderham and Nordhaug, 2003). However it is essential to understand peoples' different cultural origins with cross-national players to be able to recognize the effects for international management.

The international companies has to acquire the knowledge of how to cope with worldwide issues like selecting and preparing people for the assignment and managing in other countries, and conducting businesses abroad, to be able to take advantage of and captivate the learning throughout the international processes. In order to be successful in these activities, expatriate has to understand the effects of culture on routine business operations (Briscoe & Shuler, 2004).

Mauritius culture is well known for its cultural diversities and it is very difficult to talk about only one national culture. Considering the fact that Mauritius has different religion groups like Hindu, Chinese, Catholic, Muslims and Marathi, though Creole is the national language and is spoken by mostly the whole of the population but English is the most main language for national, political, and business communications.

2.8.1 Hofstede's cultural dimensions

Hofstede have identified five cultural dimensions for which every country could be categorized in. The five dimensions are power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus femininity, and long-term versus short-term orientation (Hofstede 2001).

Power distance shows the level of inequality in institutions and organizations. A country with large power distance is characterized by formal hierarchies and by subordinates who have slight control in their own work and where the manager have total authority.

Uncertainty avoidance focuses on the level in which individuals in a certain country accept uncertainty and ambiguity within the society. High uncertainty points out that the country has a low tolerance for uncertainty and ambiguity. This will inevitably create a society where rule dominates, which institutes laws, regulations and controls to reduce the amount of uncertainty (Hofstede 1984).

Individualism versus collectivism refers to the amount where people prefer to take care of themselves, and making their own decisions rather than being destined to groups or families. A highly individualistic society comprises of usually impersonal and unattached relationships between individuals, while a low individualistic society has more tight relationships between individuals, hence referred to as collectivism by Hofstede (1984).

The masculinity versus femininity dimension describes if a culture are bound to values that are seen as more similar to women's or men's values. Masculinity is regarded as stereotype adjectives such as assertiveness and competitive, while the femininity is characterized by modesty and sensitivity. A high masculinity standing indicates the country experiences a high degree of gender differences, usually favoring men rather than women.

The fifth and last cultural dimension is long-term versus short-term orientation. A long-term oriented society emphasize on constructing a future oriented perspective in contrast to the short-term oriented society which values the present and past (Hofstede, 2001).

In Mauritius, foreign workers are from different countries, hence their views and mindset are quite different.

2.9 Benefits of Foreign workers

2.10 Problems of Foreign workers

2.11 Conclusion

This chapter has concentrated on the review of the main literatures dealing with the subjects under consideration about the definition of Foreign labour, the Mauritius economy, the export processing zone (EPZ), recruitment/selection/retention of foreign labour, the legal framework, motivation, culture, benefits of foreign workers, problems of foreign workers and finally the conclusion. The next chapter will be discussing on the research methodology.