Mozambican parliament approves new Labor Law

10 May 2007

Maputo, Mozambique, 10 May – The Mozambican parliament Wednesday unanimously the country’s new Labor Law, which substantially reduces compensations for cancellation of working contracts, according to Mozambican news agency AIM.

According to AIM, the issue of compensation has been at the center of prolonged negotiations between the government and employer associations, with employers saying that under the terms of the 1998 Labor Law it was very expensive to fire workers.

The 1998 law stipulated that if an employer wanted to fire an employee for “structural, technological or market reasons,” they would have to pay 45 days of salary when the worker had been employed for between three and six months and 90 days of salary when the employment period was between six months and two years.

The workers employed by a company for over two years would have the right to three months salary for every two years worked.

The Law put forward to parliament reduces the amount to 20 days of salary for each year worked.

This law establishes a quota system for employing foreigners at large companies, with those employing over 100 workers being allowed to have 5 percent of foreign workers.

This percentage rises to 8 percent for medium-sized companies with between 11 and 100 workers, and to 10 percent for small companies employing less than 10 people. (macauhub)