Tourism Business Climate Review in Relation to Workplace

TOURISM BUSINESS CLIMATE REVIEW IN RELATION TO WORKPLACE

CONDITIONS IN MAINLAND TANZANIA

DRAFT REPORT

Prepared by:

Dr. Kassim Meja Kapalata.

1

CONTENTS

Page
i / Contents / 1
ii / Acronyms / 2
1.0 / Introduction / 3
1.1 / Background / 3
1.2 / Structure / 4
2.0 / Available information on work conditions / 5
2.1 / Literature/Desk review / 5
2.2 / National and International Instruments / 8
3.0 / Current situation on work conditions / 12
3.1.1 / The 2011/12 Labour inspection Report / 12
3.1.2 / The 2012/13 Labour inspection Report / 18
3.2 / Field visits observations / 23
3.2.1 / Labour law awareness / 23
3.2.2 / Employment contracts / 24
3.2.3 / Working hours / 26
3.2.4 / Minimum wages / 27
3.2.5 / Fundamental rights and protections / 28
3.2.6 / Collective Bargaining Agreements / 30
3.2.7 / Leaves / 31
3.2.8 / Dispute occurrence / 31
3.2.9 / Occupational Health and Safety / 31
3.2.10 / Social Security / 31
3.2.11 / Outsourcing / 31
4.0 / Key Findings and Recommendations / 32
4.1 / Finding / 32
4.2 / Recommendations / 36
5.0 / References / 39
6.0 / Annexes / 40

ACRONYMS

AIDS ...... Acquired immunodeficiency syndrome

CBAs...... Collective Bargaining Agreement

CMA...... Commission Mediation and Arbitration

CHODAWU...... Conservation Hotel Domestic and Allied-Workers

ELRA...... Employment and Labour Relations Act,

HIV ...... Human Immunodeficiency Virus

ILO...... International Labour Organization

LIA...... Labour Institutions Act

OHSA...... Occupational Health and Safety Act

PPD...... Public Private Dialogue

RTT...... Responsible Tourism

SUMATRA...... Surface Marine Transport Authority

SECO...... Swiss Secretariat for Economic Af-fairs

TATO...... Tanzania Association of Tour Operators

UNCTAD...... United nations Conference on Trade and Development

UN...... United Nations

USD...... United States Dollar

WTTC…………………………World Trade Tourism Conference

1. INTRODUCTION

1.1 Background

The ILO, as a member of the UN inter Agency cluster on Trade and productive capacity, is one of the implementing Agency in a project funded by Swiss Secretariat for EconomicAffairs (SECO) in which Tanzania as LDC is a beneficiary. Among areas of support, is promotion of Responsible Tourism (RTT) with the aim of increasing tourism benefits to more Tanzanian people while promoting international standards sustainable for economic and livelihood benefits.

One of the elements of RTT is respect for international and national labour standards among the Workers and Employers in the tourism industry. In this regard the ILO seeks to supplement/compliment the Report made by UNCTAD on Tourism Business Climate Re-view by conducting a review of workplace conditions in the tourism sector, the findings of which will form part of the main report on Tourism Business Climate.

Tourism is one of the top three employing industry sectors in the United Republic of Tanzania. In 2013 for instance it generated direct jobs 402,500 (3.8% of total employment).[1]Moreover, the general number of employees in the same year(i.e. including wider effects from investment, the supplychain and induced income impacts)was 1,196,000 jobs (11.2% of total employment).[2]

The human resource capital is regarded as a pivot for blossoming tourism business and influences its growth and development,is indisputably dependent on the state of working conditions. In order toachieve Responsible tourism therefore,this review scrutinizesthe working conditions in the industryto find out any existing constraints for its growth.

The main focus of this study therefore is to find out the current working conditions in the tourism sector in Mainland Tanzania and propose recommendations commensurate with the findings.The findings will also inform ILO on areas it should direct its interventions in improving the tourism business climate in Tanzania and also providing valuable information for discussions in the Public Private Dialogue (PPD).

The methodology adopted for this review was a rapid situation analysis based on fact finding mission in Dar es Salaam and Arusha,plus desk research.

1.2Structure and Content of the Report.

This Report consists of Introduction and main body. The Introduction explains the essence of this study, its respective objectives and the methodology used to conduct the review. The body is organized as follows: Part 1 examines the information available on work conditions in tourism Business through desk reviewtogether with national and International instruments. Part 2 looks at thecurrent situation of work conditions in Tourism sector in Tanzania through examining the labourInspection Reports and stakeholders’ information obtained during field visits through interviews and discussion with informant groups and individuals.Part 3 contains some findings and their respective recommendations.

PART 1

2.0AVAILABLE INFORMATION ON WORK CONDITIONS.

2.1Literature Review.

Kweka et al submits that Tanzania tourism sector has become the pillar of the economy.[3] In the same vein, Tanzania Tourism Sector Survey[4] presents that tourism continued to play an important role in the global economy and due to its strong economic multiplier effect; it embraces small and medium enterprises. This being the case, it is noted that, tourism is still one of the largest employment sectors in most countries and a fast entry vehicle into the workforce for young people and women in the urban and rural communities. Regarding Tanzania in particular, it is submitted that tourism industry is thriving and is rated among the fastest growing sectors in the country and it takes a lead in bringing foreign exchange.[5] This survey did not touch on labour law compliance. Therefore, a question which is unanswered here is whether the earnings and the booming of the sector (tourism) generally as presented reflects positively in labour law compliance and therefore presence of good working conditions. In a summary report of the Meeting of the Institute for Human Rights and Business & Tourism Concern[6],it is discussed that tourism is a rapidly growing international industry and a major development driver for many lesser developed economies.[7] It is however noted that, there are serious questions about how the benefits of this sector are shared, and of its impacts on human rights.[8] There is a position that in order tourism to be sustainable, local people must enjoy some of the proceeds from tourism, participate in the opportunities it offers, and not suffer adverse human rights impacts.[9] Because of this it is argued that a human rights approach makes sense in terms of business sustainability, as well as promoting social, economic and environmental sustainability of tourism destinations.[10] One of the key human rights issue related to tourism is labour.[11]

It is further reported that tourism is one of the largest and most dynamic industries in the global economy. The sector allows for quick entry for youth, women and migrant workers. Tourism has created more than 235 million direct and indirect jobs (approximately 8 per cent of the global workforce). Women account for 60 – 70 per cent of the tourism labour force. International tourism export receipts have reached over USD 1.2 trillion (30 per cent of global service exports; 45 per cent of service exports for Least Developed Countries). However, difficult working conditions contribute to high staff turnover. This has consequences for business costs, productivity, competitiveness, service quality, and social dialogue.[12]

The Director for Tourism Concern, one Tricia Barnett, once remarked;

“When I talk about a living wage, I remember how in Kenya, a few years ago, a bomb went off on the Mombassa coast in an Israeli owned hotel. Several local employees were killed. Their families were so poor that they could not afford to bury them. Why is it that these employees, in full-time employment, were still living in poverty? Charitable donations were made by guests so that they could be buried. What had gone so wrong that the families had to appeal to charity to bury them?”[13]

It is because of this situation where Tricia makes a suggestion that those who are in a supply chain of tourism activities to trade fairly so that at the end those involved in the supply chain can rely on fair wages and contracts and decide for themselves how best to spend their income rather than look for charity.[14]

A study by Dodds & Joppe[15]indicates that there are a number of labour issues which affect the tourism industry. These issues are mentioned as including women’s rights, fair wages, long working hours, qualification and skills requirements for employees, inability to join trade unions, importing of labour and displacement of traditional employment to benefit from tourism dollars. It is submitted that tourism workers often do not earn a living wage and are dependent on tips and service charges. Many workers have temporary contracts or none at all, work long hours and are employed in low skilled areas such as waitressing and/or house cleaning. It is also noted that the key employment positions are occupied by foreigners where the locals are left with the normal positions which are low or semi-skilled, poorly paid jobs (cooks, maintenance workers, chambermaids, barmen, gardeners, bus drivers, etc). The findings by Dodds & Joppe are also the same in Tourism Concern research report[16] which submit with respect to hotels that staff in all types of hotels are faced with low wages and a range of unfavourable working conditions, from working hours which disrupt home life through stress and exposure to risk. These concerns are shared by an ILO Working Paper on Guide for social dialogue in the tourism industry.[17]

Reflecting on Tanzania in particular, His excellence Jakaya Mrisho Kikwete[18] on May Day of 2014 noted the tendency of the employers paying below the Minimum Wage Order set by the Minister for Labour. He observed that the Minister for Labour vide Goverment Notice No. 196/2013 made twelve[19]Sectoral Wage Board Orders with their respective minimum rates. He said that he had information that most of the employers in the private sector are paying below the mimimum wage presribed. He also noted on the Employer-Trade Union relationship, where he said that he is unhappy on the information that some employers in the private sector are not adhereing to the provisions on freedom of association. That, where some union branches are established, the forefront employees/members of trade unions are victimised and discriminated by the employers. Some are shifted to other worksites or terminated. Some employers have established some alternative mechanisms to supress trade unionism.[20]The President remarked that existence of trade union branches in workplaces is not a matter of choice, it is by law and one of the organisational rights of employees. These rights are also entrenched in he international conventions, they are fundamental rights and they are a concern of good governance.[21] These observations of the President were made generally to all employers in Tanzania in which case, the tourims sector is also in reference.

The Eurofound[22] study which inter alia touched on the tourism sector in Tanzania indicates that the actual working conditions in the workplaces are often not in line with the legal provisions. It is found that the substance of labour law is undermined and employees are subjected to conditions well below the specified minimum working conditions. The same position is also explained in an ILO Report.[23] For instance, on remuneration, the ILO report finds that the structure of wages in the tourism sector relies highly on service charges and other forms of gratuity in the composition of wages.[24] This being the case, it is noted that, workers’ income can vary and be highly unpredictable, while employers are not encouraged to introduce rational and sustainable wage systems. The report also indicates among others, the serious problem of not adhering to the minimum hours set in the laws. It is generally recommended that, in fair trade tourism local people should be employed in order to provide opportunities for developing their potential, which would include training and development for managerial positions. Investors must also adhere to relevant regulations, whether derived from local, national or international regulation.[25]

2.2 National and International Legal Instruments.

Paving way for a well developed tourism industry, Tanzania came up with the National Tourism Policy, 1999.[26] Relevant to this study, the Policy “seeks to assist in the effort to promote the economy and livelihood of the people, essentially poverty alleviation, through encouraging the development of sustainable and quality tourism that is culturally and socially acceptable, ecologically friendly, environmentally sustainable, and economically viable”.[27] Specifically on the economic objectives of the Policy, aims inter alia, to create employment, promote human resource development and investment opportunities through the development of private entrepreneurship in the tourism sector.[28]

The objectives set in the Policy especially on human resource were made in acknowledgement of the constraints and limitations on tourism sector. The constraints and limitations referred to here are; the shortage of appropriate and specialized core and skilled personnel in the tourist industry, as well as poor comprehensive planning for human resources development and investment.[29] It is out of these limitations and constraints that the policy states: “Human resource development is a basis for enhancing the national capacity to manage and develop Tanzania’s tourism sector. Given the need for appropriate and specialized skills within the tourist industry, it is imperative that greater effort should be put into building of capacities in this sector. Being service-oriented it is imperative that those engaged in the tourist industry ensure that customers obtain good value for their money. There is therefore a need for, among others, formal and in-service training, refresher course, workshops, seminars, study tours, and an increase of private sector involvement in this area”.[30]

More specifically on human resource development, the Policy strategies inter alia on developing a competent workforce in the sector by nurturing a pool of creative, capable and internationally oriented managers, encouraging labour efficiency and devising cost-effective measures, establishing more training facilities for the tourist industry, creating more employment opportunities and ensuring self-sufficiency with regard to human resources within the tourism industry and regulating and monitoring institutions that offer hotel and tourism training.[31]

The Tourism Act[32] is one of the legal instruments to implement the National Tourism Policy discussedabove. The Tourism Act provides forinstitutional framework, administration, regulation, registration and licensing of tourism facilities and activities and for related matters.[33] The Act requires all persons exercising powers or discharging any duties under it, to strive to promote inter alia the National Tourism Policy. More relevant to the study at hand, the Tourism Act on employer-employee relationship provides that; the rights, privileges, benefits and any other matters relating to employees and employers, as the case may be under it, shall be as provided under theEmployment and Labour Relations Act, (ELRA)the Labour Institutions Act (LIA) and any other relevant laws.[34] Moreover, all matters relating to employment of foreigners under the Act shall be as provided for under the relevant laws.[35] In enforcing the provisions on employment of foreigners while avoiding prejudice to other written law, the Act provides that the Director for Tourism may, in consultation with the relevant authority, appoint in writing such number of authorized officers for purposes of inspection and compliance.[36]

The most relevant instruments which form the base of this review are; The Employment and Labour Relations Act, No. 6/2004 (herein referred to as ELRA) readtogether with the Labour Institutions Act, No.7/2004 (herein referred to as LIA). ELRA and LIA are important instruments. The other important instrument is the Occupational Health and Safety Act, No. 5/2008 (herein referred to as OHSA). The ELRA and LIA provide for core labour rights, establish basic employment standards, provide a framework for collective bargaining, provide for the prevention and settlement of disputes andrelated matters.[37] The ELRA t is the main instrument on labour standards and core labour rights, thus serving as an important tool for this review.

The LIAon the other hand provides for establishment of Labour Institutions, their functions, powers and duties and other related matters. This law establishes mechanisms for the enforceability of the provisions of the ELRA especially on core rights and labour standards. Moreover, the OHSA was enacted “to make provisions for the safety, health and welfare of the work in factories and other places of work; to provide for the protection other than persons at work against hazards to health and safety arising out of or in connection with activities of persons at work; and to provide for connected matters.”[38]

Apart from relevant national instruments, there are also many relevant international (ILO) instruments on working conditions.[39] For purpose of this review, only the Working Conditions (Hotels and Restaurants) Convention is discussed.[40] The Convention applies to workers employed within hotels and similar establishments providing lodging, restaurants and similar establishments providing food, beverages or both.[41] The Convention however allows some flexibility on the coverage of the convention subject to national conditions.[42] In this sense the Convention allows a signatory to it to extend its application to other related establishments providing tourism services.[43]