Eswatini

Eswatini, a small landlocked country in Southern Africa, is bordered by South Africa and Mozambique. It features diverse landscapes from mountains to savannas and is governed from two capitals, Mbabane and Lobamba. Originally a British protectorate, it gained independence in 1968 and was renamed from Swaziland to Eswatini in 2018 by King Mswati III, reflecting its absolute monarchy system.

Socio-Economic Landscape

Eswatini's economy is primarily based on agriculture, mining, and manufacturing, with significant challenges such as high poverty and HIV/AIDS rates. The country has a young population with a median age of 22, facing high unemployment, especially among youth and women.

Cultural Traditions

Swazi culture emphasizes community and tradition, celebrating festivals like the Umhlanga and Incwala. The society values respect for elders and authority, impacting social and workplace dynamics.

Skill Levels and Sectoral Distribution

The workforce in Eswatini is mixed-skilled with a need for more technical and vocational training. Agriculture employs many, especially in rural areas, while the manufacturing sector focuses on textiles and sugar processing. The service sector is growing but still limited in job creation.

Workplace Culture

In Eswatini, workplaces are hierarchical, respecting age and social status. Communication tends to be indirect to maintain harmony, and English and SiSwati are commonly used. Modern companies may exhibit flatter management styles.

Economic Sectors

Agriculture is vital, with sugarcane as the primary crop. The manufacturing sector is crucial for exports and domestic consumption, and the service sector, including tourism, shows growth potential. Emerging sectors like renewable energy and ICT are seen as opportunities for development and job creation.

• Eswatini National Provident Fund (ENPF): Employers in Eswatini must contribute 5% of an employee's gross salary to the ENPF, which provides retirement, disability, and survivor benefits.

• Skills Development Fund: Employers with an annual salary bill over E80,000 must contribute approximately 1% to this fund.

• Tax System: Eswatini has a progressive tax system with a tax-free threshold of E41,000 per year. Resident taxpayers receive a tax rebate (E8,200 or E10,900 for those over 60), increasing the tax-free threshold.

• Deductible Contributions: Employees can deduct up to 10% of their gross salary for pension fund contributions and up to 15% for retirement annuity fund contributions, with the total deduction reduced by any pension fund contributions.

• VAT: The standard VAT rate is 15%. Businesses with a turnover exceeding E500,000 must register for VAT. The reverse charge mechanism applies to imported services, shifting VAT responsibility to the Swazi recipient.

• Corporate Tax Rate: The corporate income tax rate is 27.5%, potentially reduced to 12.5% for qualifying companies. Development incentives include reduced tax rates and customs duty exemptions.

• Sector-Specific Incentives: There are incentives for manufacturing, export, agriculture, and tourism sectors, aimed at encouraging investment and development.

• Regional Incentives: Additional benefits are available for businesses in designated development zones or less-developed regions.

• Compliance: Employers must register with the ENPF, withhold employee contributions, and remit payments monthly. Non-compliance can result in penalties.

• Eswatini Employment Act of 1980: Employees who work at least 21 consecutive days per month over a 12-month period are entitled to a minimum of 14 working days of paid vacation leave annually. This leave accrues proportionally throughout the year and should ideally be taken within the same year it is earned.

• Compensation During Leave: Employees receive their regular salary during their vacation.

• Public Holidays in Eswatini: Include New Year's Day, Somhlolo Day (Independence Day), King's Birthday, National Flag Day, Labor Day, Ascension Day, Umhlanga Reed Dance Day, Incwala Day, Christmas Day, and Boxing Day.

• Other Types of Leave:

  • Sick Leave: Available after six months of service, with compensation depending on the length of service.
  • Maternity Leave: 14 weeks, with at least one month paid by the employer.
  • Compassionate and Special Circumstance Leave: For events like family death, marriage, and civic duties, with specific terms depending on employment agreements.

In Eswatini, employees are entitled to several mandated benefits, including paid leave, social security, and termination benefits. Here's a breakdown of these benefits:

• Paid Leave: Employees receive 11 days of annual leave, 11 public holidays, up to 28 days of sick leave, and 12 weeks of maternity leave (with the first 6 weeks fully paid).
• Social Security Benefits: Contributions to the provident fund system are made by both employers and employees, providing retirement, disability, and survivor benefits.
• Termination Benefits: Employees are entitled to a notice period and potentially severance pay upon termination, depending on their length of service.

Additionally, some employers in Eswatini offer optional benefits to enhance their competitiveness, such as:

• Private Health Insurance: To supplement the public healthcare system.
• Life and Disability Insurance: For added financial security.
• Pension Top-Up Schemes: To increase retirement savings.
• Flexible Work Arrangements: To improve work-life balance.
• Training and Development Opportunities: To support professional growth.
• Family-Friendly Benefits: Such as childcare subsidies and flexible working hours.
• Car Allowances or Company Cars: Especially for roles requiring frequent travel.

These benefits, both mandatory and optional, aim to provide financial security and improve the quality of life for employees in Eswatini.

• Termination of Employment: In Eswatini, valid reasons for terminating an employee include misconduct (e.g., theft, gross insubordination), incapacity (due to performance, illness, or injury), and operational requirements. Notice periods vary based on the length of service, ranging from one week to over a month with additional days for longer tenures.

• Severance Pay: Employees with over a year of service are entitled to severance pay, calculated as 10 working days' wages for each completed year of service beyond the first year, except in cases of serious misconduct or refusal of suitable alternative employment.

• Anti-Discrimination Laws: The Constitution prohibits discrimination based on various characteristics, although it does not cover sexual orientation, gender identity, or marital status. Employers must adhere to anti-discrimination laws in all aspects of employment.

• Redress for Discrimination: Victims of discrimination can seek legal remedy through the Industrial Court for employment-related cases or the High Court for broader issues. The Commission on Human Rights and Public Administration also handles discrimination complaints.

• Employer Responsibilities: Employers are required to implement non-discriminatory policies, prevent harassment, provide anti-discrimination training, and establish reporting procedures for discrimination.

• Challenges: Implementation and enforcement of anti-discrimination laws face obstacles such as lack of comprehensive legislation, limited awareness, and conflicts with customary practices.

• Labor Standards: The standard work week is 48 hours, with regulations on overtime pay. Employees are entitled to breaks and rest periods, and employers must meet ergonomic requirements under the Occupational Safety and Health Act.

• Occupational Safety and Health (OSH): Employers have significant responsibilities including risk assessment, providing safe work equipment and PPE, and training employees. The Department of Labour's OSH Inspectorate Unit enforces these regulations.

In Eswatini, the Employment Act of 1980 regulates employment agreements, which include indefinite term contracts, fixed-term contracts, part-time employment contracts, and collective agreements. Here are the key aspects of these agreements:

• Indefinite Term Contracts: These contracts do not have a set end date, providing stability for both parties. Termination follows specific procedures under the Employment Act.

• Fixed-Term Contracts: These are used for temporary, seasonal, or project-based work, with clear start and end dates.

• Part-Time Employment Contracts: For employees working fewer hours than full-time, these contracts detail hours, schedules, and benefits.

• Collective Agreements: Negotiated between employers or their associations and trade unions, these set out employment terms for specific industries or workplaces.

The law also addresses employment for young workers and domestic employees, ensuring compliance with the Employment Act. Employment agreements in Eswatini should include clauses on basic information, job description, remuneration, working conditions, leave entitlements, termination, and dispute resolution.

Additionally, the Employment Act recognizes a probationary period, typically three months, to assess new employees' suitability. During this period, employment can be terminated without notice.

Confidentiality and non-compete clauses are crucial for protecting business interests. Confidentiality clauses safeguard sensitive information, while non-compete clauses prevent employees from joining competitors immediately after leaving the company. However, the enforceability of non-compete clauses depends on their reasonableness in scope, duration, and geographic reach.

In Eswatini, there is no specific legislation for remote work, but existing laws such as the Employment Act of 1982 provide a framework that can be adapted for remote work scenarios. This includes establishing terms through written contracts that detail working hours, communication methods, and equipment provisions. Challenges include adapting these laws to remote work and ensuring compliance, alongside dealing with inconsistent internet access across the country. Despite these challenges, there are efforts to improve ICT infrastructure to support remote work.

Employers have responsibilities under the Occupational Health and Safety Act (OHSA) of 2006 to ensure a safe working environment, which extends to home offices in remote work settings. They must also secure company data with appropriate measures and maintain effective communication and collaboration among remote teams.

Flexible work arrangements like part-time work, flexitime, and job sharing are not directly addressed in Eswatini's laws but can be managed through contractual agreements that specify conditions and expectations. Employers are not mandated to reimburse for equipment or expenses unless negotiated, and they must ensure data privacy and security, adhering to principles of data minimization and transparency.

Employees retain rights to access and control over their personal data, even in remote settings. Best practices for data security include strong passwords, encryption, secure remote access, employee training, regular data backups, and a solid incident response plan.

Overview of Eswatini's Employment Act of 1980

Eswatini's Employment Act of 1980 sets the standard workweek at 45 hours from Monday to Friday for most employees, while security guards and watchmen have a 72-hour workweek. The Act does not specify daily working hours but does outline regulations for overtime, which requires employee consent and must be compensated at a minimum of one and a half times the normal wage rate. Working on a rest day entitles employees to double their normal wage rate.

Overtime Regulations

There are no specific legal limits on daily or weekly overtime hours; however, the total working hours should remain reasonable to ensure employee well-being. The Act allows for flexibility in overtime compensation through individual contracts or collective bargaining agreements.

Breaks and Rest Periods

The Act mandates a minimum 30-minute break for employees working more than five hours continuously. It does not specify additional break requirements, leaving room for further definition through individual contracts or collective bargaining agreements.

Night Shifts and Weekend Work

The Act does not provide specific regulations for night shifts or premium pay for weekend work, except that working on a designated rest day warrants double pay. These conditions can be enhanced through negotiations in employment contracts.

Legal Interpretations and Additional Considerations

The Swaziland Industrial Court, now potentially the Eswatini Industrial Court, may offer interpretations on what constitutes "reasonable" working hours and breaks, although these are not statutory laws but precedents that may influence court decisions.

Understanding market competitive salaries in Eswatini is essential for ensuring fair employee compensation and maintaining business sustainability. These salaries include a base salary and benefits like health insurance and pensions. For employers, offering competitive salaries attracts qualified candidates and reduces turnover, while for employees, it enhances job satisfaction and motivation.

Determining these salaries in Eswatini can be challenging due to data scarcity. Useful resources include government reports, industry associations, international salary surveys, and job boards, though the accuracy of online data may vary. The Wages Act, 1964, and subsequent Wages Regulation Orders set minimum wages, which vary by skill, industry, and experience levels.

Enforcement of these regulations is managed by the Ministry of Labour and Social Security, with penalties outlined for non-compliance. Additionally, employees may receive bonuses and allowances, such as performance-based bonuses, the 13th Month Pay, and allowances for housing, transport, and meals.

The Swazi Employment Act 2007 governs employment terms and implies a minimum monthly payroll cycle, although more frequent cycles are permissible. Payroll processes involve timesheet submission, earnings calculation, deductions, and final payment, with strict adherence to tax and social security laws.

• Notice Periods: The Employment Act of 1980 in Eswatini specifies notice periods based on the duration of employment, ranging from one week after probation to one month plus additional days for each year of service beyond twelve months. Exceptions include the probationary period, fixed-term contracts, and summary dismissal for serious misconduct.

• Employee Rights: During the notice period, employees are entitled to reasonable time to seek new employment, typically twelve hours per week.

• Severance Pay: Employees may be entitled to severance pay in cases of redundancy, employer incapacity, or involuntary retrenchment. However, severance pay is not granted for retirement, summary dismissal for misconduct, resignation, or the completion of a fixed-term contract.

• Calculation of Severance Pay: Severance pay, if applicable, is calculated at ten working days' wages for each completed year of service beyond the first year.

• Termination Procedures: Termination must be accompanied by a notice, preferably in written form, and the reasons for termination must be valid and documented. Summary dismissals are restricted to cases of gross misconduct.

• Unfair Dismissal: Employees can challenge unfair dismissals at the Industrial Court, which may order remedies such as reinstatement or compensation.

In Eswatini, the distinction between employees and independent contractors is determined through a common law framework, primarily using the dominant impression test which evaluates control, integration, and financial arrangements. Employees are more integrated into the company, controlled by the employer, and receive regular salaries with benefits. Independent contractors, however, maintain autonomy over their work processes, invoice for their services, and handle their own taxes and benefits.

The legal framework for independent contractor agreements in Eswatini is informed by common law principles and judicial decisions, focusing on clear definitions of scope of work, compensation, confidentiality, and termination procedures. Negotiations for these agreements should emphasize clarity and include dispute resolution mechanisms.

Independent contracting is prevalent in various sectors such as IT, construction, and creative industries. Intellectual property rights, including copyrights, trademarks, and patents, are significant for independent contractors, generally favoring the creator unless otherwise stipulated in a written agreement.

Freelancers and independent contractors must register for income tax and VAT if they meet certain thresholds, and they are advised to secure insurance such as professional indemnity, public liability, business interruption, and health insurance to mitigate risks associated with self-employment.

Eswatini has established comprehensive laws and regulations to ensure workplace safety and public health. The primary legal frameworks include the Occupational Safety and Health Act, 2001 and the Factories, Machinery and Construction Works Act, 1972, which set standards for safe working conditions, hazard control, and accident reporting. Additionally, the Public Health Act, 1969 addresses broader health issues like communicable diseases and sanitation.

Employers in Eswatini are responsible for risk assessments, implementing safety measures, and providing training, while employees must adhere to safety practices and report hazards. The Department of Labor within the Ministry of Labor and Social Security enforces these regulations, with labor inspectors authorized to conduct inspections and enforce compliance.

The landscape of health and safety is continuously evolving, necessitating that both employers and employees stay informed about new regulations and practices to maintain safety and health standards effectively. Despite robust regulations, challenges such as limited resources and the informal sector's nature present ongoing hurdles in comprehensive enforcement and awareness.

Eswatini's labor dispute resolution primarily occurs through the Industrial Court, which handles a variety of employment-related disputes including wrongful termination, unpaid wages, and discrimination. The Supreme Court serves as the final appellate body for these matters. The Industrial Court process typically involves conciliation efforts followed by a formal hearing if necessary, with decisions subject to appeal at the Supreme Court.

The country also utilizes arbitration under the Industrial Relations Act and the Arbitration Act to offer a potentially quicker, less costly alternative for resolving labor disputes. Labor inspections and compliance audits are conducted by the Department of Labor to enforce labor laws, focusing on fair wages, safe working conditions, and adherence to employment contracts.

Despite some protections for whistleblowers under the Industrial Relations Act and the Prevention of Corruption Act, Eswatini lacks comprehensive legal safeguards for whistleblowers, which can deter reporting of labor violations. The country has ratified several core International Labour Organization (ILO) conventions, which support fundamental labor rights, but still faces challenges in fully integrating these standards into national law and practice. Areas needing improvement include collective bargaining rights, freedom of association, child labor issues, and overall enforcement of labor laws.

Understanding Communication Styles in Eswatini's Workplaces

• Indirectness and Respect: In Eswatini, communication tends to be indirect, prioritizing respect for hierarchy and avoiding confrontation, in line with the cultural value of siSwati or proper customary behavior. Professionals may use euphemisms and indirect suggestions rather than direct language, especially in sensitive contexts like salary negotiations.

• Formality in Interaction: The workplace environment in Eswatini is formal. Titles and surnames are commonly used in addressing superiors, and meetings are structured with clear leadership roles. Business attire is conservative, and maintaining a professional appearance is crucial.

• Non-Verbal Communication: Non-verbal cues are significant in Eswatini. Eye contact with superiors can be seen as challenging, so respectful glances are preferred. Silence might indicate respect or contemplation, and overt gestures could be viewed as unprofessional.

Negotiation Practices in Eswatini

• Building Relationships: Negotiations emphasize patience and building relationships before discussing business specifics. Initial interactions often involve social conversations to establish trust.

• Avoiding Direct Confrontation: Direct confrontation is avoided in favor of euphemisms and respectful persuasion. Negotiators use indirect language to maintain a positive negotiation climate.

• Flexibility and Decision-Making: Swati negotiators may avoid strong initial offers or immediate decisions, allowing room for contemplation and flexibility.

• Cultural Influences: Respect for seniority and hierarchy influences negotiation, with a focus on long-term relationships and avoiding public embarrassment.

Business Structure and Dynamics

• Hierarchical Decision-Making: Decision-making is typically top-down, with senior managers holding significant authority. Employees often defer to superiors, which can limit initiative at lower levels.

• Team Dynamics and Leadership: Teams may operate in silos with clear reporting lines. Leadership styles traditionally lean authoritative but are evolving to incorporate more participative and transformational elements, balancing authority with respect and motivation.

Cultural and Business Observances

• Statutory Holidays: Eswatini observes several national holidays like the King's Birthday and National Independence Day, during which businesses and government offices may close.

• Regional Observances: Local traditions may also affect business operations, particularly in rural areas during cultural festivals like the Incwala ceremony.

Planning for Business Success

• To navigate these closures and cultural nuances effectively, it is advisable to consult local partners and official calendars to plan business activities and meetings strategically.