Table of Contents

Vanuatu

Table of Contents

Currency

Vanuatu Vatu

Payroll Frequency

Monthly

Employer Taxes

4%

About Vanuatu

Vanuatu, a tropical archipelago in the South Pacific, is a hidden gem known for its stunning landscapes and vibrant culture. Comprised of 83 islands, Vanuatu offers visitors breathtaking white sandy beaches, crystal-clear turquoise waters, and lush rainforests with cascading waterfalls. The country’s unique blend of Melanesian tradition and modern influences creates a rich cultural tapestry.

Employment Relationship

• Permanent Employment

Permanent employment in Vanuatu is defined as an agreement to work between two parties for an unspecified amount of time. Permanent employees are to be given notice which is specified by the amount of time the employee has been in service.The limit for fixed-term contracts is 3 years, therefore any employment contract which stipulates a time period greatly exceeding 3 years (e.g., 10, 15, 20) will be considered a contract for permanent employment.    

• Fixed-Term or Specific-Purpose Contracts

In Vanuatu, the labor law limits the duration of fixed-term contracts to 3 years. There are no limits to the number of renewals a fixed-term contract can have. Employees are entitled to the same benefits as permanent employees, i.e., are due annual leave, sick leave, and severance pay upon termination of the employment contract.  

• Temporary Employment Contratcs

The labor code in Vanuatu does not define temporary in terms of time, however the Public Service Act designates a limit of 6 months for temporary employment of workers employed by the Public Service Commission. Whereas there is no provision for temporary employment in the private sector, following the limit prescribed for public sector employees can be beneficial. Employers should be aware that employing workers under successive temporary employment agreements will not disqualify the worker from the same entitlements as a permanent employee where the employee has been in service for a period longer than 3 years.     Temporary Employment Agencies Employment agencies are regulated by law in Vanuatu. Every employment agency must obtain a current valid license.  This license can be obtained by submitting the appropriate application to the Commissioner of Labor and paying the prescribed fee. Furthermore, any employment contract made for employees who are placed and recruited by employment agencies must be submitted to the Commissioner for approval before work commences.     Seasonal Employment Citizens of Vanuatu may work as seasonal employees in New Zealand.  Such employees may be recruited by employment agencies to fill vacancies. Employment agencies which recruit and place workers in positions of seasonal employment must secure a license specifically for seasonal employment.  In order to be considered for seasonal employment, the worker must be at least 21 years of age and meet a variety of administrative criteria.  The agency must orientate the employee and inform them of general requirements, including securing a work visa.  Seasonal employment agencies must keep records regarding all employees placed in seasonal work.  See Time-keeping and Reporting.  

Probationary Period

In Vanuatu, every employment contract for an unspecified period is subject to a probationary period. The probationary period in Vanuatu is 15 days but may be increased up to 6 months including renewals by agreement of the parties.  During the probationary period, employment may be terminated by either party without notice.  

Working Hours

“Hours of work” means the time when an employee is at the disposal of the employer and does not include rest periods when the employee is not at the employer’s disposal.  Full-time employment is not defined in Vanuatu labor law. The maximum number of hours an employee may work in a week is 44 hours.  The employee may only work 6 days out of the week and up to 8 hours a day. Employers must provide work for employees according to their contracts.  If the employer has no work for the employee, the employer still must pay the employee for the hours of work agreed upon in the contract.

Holidays / PTO

• Statutory Holidays

X

• Paid Annual Leave

Every employee who has worked for the same employer for 12 consecutive months is entitled to 12 working days a year of leave, accrued at the rate of 1 day of leave per month. For employees who have worked for the same employer, regardless of if the employment is continuous, for: 20 years, the entitlement is raised to 14 days a year 25 years, the entitlement is raised to 16 days a year 30 years or more, the entitlement is raised to 18 days a year.  Annual leave should be taken in 1 period but can be taken in no more than 2 if the employee and employer agree.  Annual leave may be taken wholly or partly in advance before the employee has acquired entitlement to it.

• Sick Leave

Employees who have continuous employment with the same employer for more than 12 months are entitled to paid sick leave. This leave is 21 working days every year. When an employee wishes to benefit from this entitlement, they must notify the employer as soon as practicable unless the employer is already aware of their condition. This only applies if they reside within Port Vila or Luganville and are sick for more than 2 days or more than 4 days when residing in any other city. The employee must secure a medical certificate of illness to produce to the employer. The medical certificate used for showing good cause for absence from work shall not be valid in respect of any period in excess of 4 days before the employee was examined by the medical practitioner.

• Maternity Leave

Employees are entitled to 12 weeks of paid maternity leave. An employer may not allow an expecting employee to work for the first 6 weeks after the delivery date. The employee may take up to 6 weeks before delivery. During this time, the employee is entitled to at least half the remuneration they would have earned had they not been absent. Employers may not dismiss employees who are absent due to maternity leave or because of an illness related to pregnancy and certified by a medical practitioner. Absences caused by illnesses related to pregnancy are only protected for up to 3 weeks.  

• Paternity Leave

Vanuatu's labor law does not currently contain any provisions for paternity leave.

Termination of Employment

• Notice Period

A contract for an unspecified period may conclude when the notice period given by either party to the employment contract expires. Notice may be written or verbal and can be given at any time.  If the employee has been in service for more than 3 years, then the notice period cannot be less than 3 months. In any other case, the notice period is 14 days for those employees who are paid not more than every 14 days or 1 pay cycle for any employee who is paid more than every 14 days. At the employee’s request, the employer must give the employee paid time off in order to search for new employment during the notice period. Notice does not have to be given when the employer pays the employee their wages in lieu of giving notice.  

• Severance Benefits

When an employment contract is terminated, the employer owes the employee remuneration, allowances, payments in lieu of holiday (when the holiday has not been taken), payment in lieu of notice period (when notice has not been given), and severance pay.   Certain kinds of employees are owed severance upon termination, provided that they have been employed for at least 12 consecutive months. Severance pay is calculated as half a month’s remuneration at the time of termination for every 12 months of service when the employee is paid in cycles of at least 1 month.  Where the employee is paid in cycles of less than 1 month, it is 15 days’ remuneration. For every period less than 12 months, the sum is equal to 1/12 of the amount calculated above and multiplied by the number of months worked.