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2015-12-08

Three Objections to Draft of Social Security Law

The Social Security Law, whose draft is ready to be presented to the Palestinian Cabinet for discussion before its approval by the President, has received many criticisms from various unions and civil society organizations.

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Asma Marzouq – Palestine Economy Portal

Translated by: Tamara Barakat

The Social Security Law, if approved by the President, will be implemented within the next two years. The Law has been under study for three years by a national team comprised of 35 members from different relevant parties.

This Law, whose implementation is expected to start at the beginning of next year, will cover pension, maternity leave, and death during work. It will force all licensed organizations and facilities employing workers to join the Social Security Fund and pay for their employees’ subscriptions to it.

Firas Jaber, researcher and Founder of the Social and Economic Policies Monitor (Marsad), believes that the Social Security Law as it is detailed in the draft will not guarantee a good and dignified life for the workers as it should. The Marsad and other civil society unions are going to stand in the way of this law if it gains approval.

 

Objections to the Law

According to critics, the weaknesses in the draft law lie in three main points: the injustice in the distribution of the participation of the employee and employer, the method for calculating the severance pay, and giving the money of the Fund to the private sector for investment.

The draft law shows that the employees must pay 7.5% of their income to the Fund, while the employer participates with 8.5%.  The percentages are very close to each other in comparison, for example, with those of the Jordanian Social Security Law which makes the employer participate with 13.5%. Jaber considered this discrimination in favor of the private sector and it will not help achieve any social justice.

The International Labor Organization, which followed the whole process of working on this law in the past three years, considered the draft law to be at the best state that can be reached, considering the Palestinian economic conditions, and it is what the three relevant parties (employers, employees, and the Government) agreed on after a series of long negotiations.

Dr. Muneer Qleibo, the Representative of the International Labor Organization in Palestine, said that, “It is impossible to apply the two-thirds and one-third percentage implemented in neighboring countries because of the many challenges in the Palestinian Labor market. If we impose an increase in the percentage paid by the business owners, they will not participate in the Fund, and so, there will be no Social Security Law.”

He also believes that workers are not going to receive their rights as they ought to, but the application of the minimum requirements of the Social Security Law is better than nothing.

 

The Union Does Not Approve

The second objection, according to Jaber, regards the 1.7% calculation used for the severance salary. It is unjust, and the worker after 30 years of service will only receive 51% of his/her salary. This does not provide for a good and dignified life and it falls below the percentage of severance pay in the public sector. 

 The Secretary General of the Palestine General Federation of Trade Unions who participated in writing the draft law agrees with Jaber. He emphasizes that the Union has not approved the draft, and that the Union is waiting for its discussion in the Cabinet to submit its demands. It also wants to pressure the private sector that refused to pay a higher percentage of severance pay.

Saad expressed his dissatisfaction with some of the objections to the draft law, which were made without knowledge of all of its details. He emphasized that his Union insisted on passing the law despite the reservations in order to put an end to the delay in its approval, which only serves to harm the workers.

The percentages involved in the Social Security Law, to which many objections were made, were set according to a study conducted by the International Labor Organization. It submitted forecasts regarding the Palestinian labor market for the next 100 years, using statistical and mathematical methods. This study was also taken into consideration when the minimum wage was determined.

 

Investment of the Fund’s Money

The third objection to the draft law regards the provision on the administration of the Fund’s money, which allows the private sector to invest the Fund’s money abroad.

Jaber thinks that this provision was formulated for the interest of the private sector, which does not intersect with the interest of the workers. The workers will participate in the Fund, without being represented in the administration of the money. He calls for the investment of the Fund’s money in Palestine in order to lead to real development and create more employment opportunities through less risky investments.

Qleibo, however, said that it is still too early to discuss this provision since it is not the law that determines how the money will be administered, but the Fund’s Administrative Board, which will equally consist of representatives of the workers, the government, and the private sector. The decision, therefore, will be based on consultation.

He added that, once the Administrative Board is formed, it must work as an investment arm and hire an investment expert to decide the amounts and locations of investments and the things to invest in. The International Labor Organization advised against the investment of all of the Fund’s money, and advised for investing them with the lowest percentages of risk.

 

Other Criticisms

Ahmad Zakarneh, President of the Union of Public Employees, considered the Government’s approval of laws in the absence of a Legislative Council and active unions as a wrong approach, and it will not lead to establishing an institution-based Palestinian State. 

Moreover, the Palestinian Non-Governmental Organizations Network called on President Mahmoud Abbas to not sign on the said law before it is thoroughly discussed and with the participation of Gaza, in order to avoid deepening the legal, political, economic, and social split.

Read more: Reasons behind Minimum Wage Law Failure

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