While Oil revenues remain the main source of revenue in Libya, the minimum wage in Libya is much lower than in other developed countries. Men earn 7% more than women, on average. Libya has no collective bargaining agreements, and employers may not have to pay severance pay or provide notice before termination. Foreign workers may also face discrimination, including restrictions on repatriation of income. This article will highlight some of the key issues related to the Minimum Wage in Libya.
Oil revenues remain Libya’s main source of income
The oil and gas industry dominates the Libyan economy. Both fuel Libya’s domestic economy and provide almost all the export revenues. While oil revenues have risen in the last decade, the country still faces many challenges. Oil and gas production has increased in recent years, but there are still challenges ahead for Libya’s economy. The government is currently drafting a plan to diversify the economy through increased tourism and other means.
The World Bank recently released an Economic Outlook for Libya, assuming that the current political strife will be resolved. A unified government will launch a comprehensive plan for rebuilding Libya. Oil production will rise to 1.5 million barrels a day by 2020. Economic growth will rebound to an average of 7.6 percent a year in 2018 and 2020, and the country’s economy will continue to grow, even as the political situation is volatile.
While oil remains Libya’s main source of income, the government is struggling to restore basic public services. It needs international assistance to diversify its economy. To start, the government should overhaul its oil policy. Oil revenues could be devoted to huge infrastructure projects. The Libyan Investment Authority is estimated to hold $67 billion at the end of 2012.
Men earn 7% more than women on average
Gender differences in pay are widespread throughout Libya. On average, Libyan men earn 7% more than their female counterparts at the minimum wage. While Libyan labor law is designed to encourage women to participate fully in the workforce, traditional social norms limit the practical effects of the labor law and create barriers to equal pay. In addition, foreign workers may face discrimination by being restricted from repatriating their income and not receiving the same rights as Libyan citizens.
In OECD countries, men earn approximately seven percent more than women on average at the minimum wage. That gap is much wider at the top of the pay scale. However, progress has been made in closing the pay gap. In families with children, the average gender pay gap is 22% higher than it is for couples without children. In Japan, the wage penalty for having children is 14% higher than for those without children. In Korea, however, there are almost no wage penalties.
Severance pay is not covered by collective bargaining agreements
In Libya, employees do not have the right to receive severance pay when they are dismissed. Libyan law stipulates that a worker must receive a minimum of one month’s notice before termination. Libyan law does not recognize “without prejudice” negotiations, and any attempt to negotiate a settlement can be used as evidence in court. Libyan employers are strongly encouraged to take care with the content of any settlement agreement.
Under Libyan law, an employer’s obligation under collective bargaining agreements is to pay the salary of every employee. The law specifies how to pay salaries, and prohibits payment by debit cards or in kind. This makes it difficult for employees to seek compensation after they have been terminated. This policy makes it difficult for Libyan companies to rehire workers. Because of this, it is important to understand the law and the rules in Libya.
Under the Libyan Labour Law, a work contract is a contract between an employer and an employee. A contract can be either indefinite or fixed-term. A fixed-term contract cannot exceed two years, and a contract can be renewed once. Likewise, a contract that starts as a fixed-term job can become an indefinite one. The Libyan Labour Law specifies that a minimum severance payment is equal to a year’s salary.
Notice period for termination is 30 days
The period for notice of termination varies by contract type. Unlimited term contracts require thirty days’ notice, while fixed-term contracts can only be dissolved in certain circumstances. If either party fails to meet its obligations, the other will be liable to pay the other party for the damages that resulted. In Libya, foreign employees must have a work permit and residence permit issued by the Libyan authorities. Written work contracts must clearly state the duration and rights of the employee, including number of hours, number of leave periods, and salary. Insurance coverage is also required.
The Libyan Labor Law specifies the minimum employment standards and employee entitlements. Contracts may be fixed or unlimited, but must be governed by the Libyan Labour Law. In Libya, fixed term contracts can only be renewed once, after which they become unlimited-term contracts. The Libyan government offers full service banking and employment laws. The Libyan banks are open on Sunday to Wednesday from 8 am to 1 pm and from 4pm to 6.30 pm. On Thursdays, they are open from 7am to 2 pm.
Fixed-term contracts can be terminated by either party, but it’s generally the employer who chooses to end the contract. A registered letter with an acknowledgement of receipt must be sent to the other party thirty days before the end of the contract. The employer must also grant the worker two hours of time each day to look for another job. Even though this is a fairly short period of notice, it is still a minimum wage requirement.
Unemployment is high in Libya
There is no question that the economy in Libya is in crisis. The collapse of the oil industry and the destruction of infrastructure has left Libya in the midst of a deep recession. The central government has attempted to address this crisis by introducing a jobs program, but the government’s response has been less than successful. Unemployment has reached over 30%, and this rate is only expected to rise further. Moreover, the country is suffering from a virulent disease known as coronavirus, which has caused widespread illness and death.
In an effort to address the situation, the United Nations Economic and Social Commission for Western Asia (ESCAP) and the Libyan Experts Forum sponsored a Socioeconomic Dialogue in Libya. The Dialogue produced a report, but it was never implemented because of the country’s political polarization and lack of a unified government. In addition, the COVID-19 pandemic has added to the toll of the conflict on the nation’s people. In addition, about half of the displaced people in Libya are children. In addition to this, many communities and militias have made ad hoc arrangements for shelter.
According to a 2016 OECD report, Libya’s private sector is only 5% of its GDP and accounts for 14% of employment. In addition, four to six percentage points of the workforce are self-employed. According to the World Bank’s 2019 Governance Indicators, Libya ranks 187th out of 190 countries, making the country’s economy largely undiversified. Libya’s property rights are not protected and employment contracts may not be enforced.
Business conditions may be volatile
Security in Libya is still a concern. Despite recent political developments, there are still many issues that could pose a threat to investments. There are several armed groups, sporadic clashes, and regulatory and financial challenges. Moreover, the oil and natural gas industry in Libya has suffered from a lack of investment due to political unrest. This instability may pose an incidental threat to businesses operating in Tripoli.
Oil production has rebounded since September 2020, when the LNA lifted an eight-month oil-production blockade. While Libya’s oil/gas sector remains uncompetitive, its non-hydrocarbon trade offers interesting growth potential. However, the government has yet to make clear investment rules. EUMS companies remain hesitant to invest in Libya due to the lack of transparency. However, GNU is reiterating the message that oil production has resumed and that the political and security situation is improving.
Oil is Libya’s primary source of income. The oil industry accounts for 70 percent of GDP and ninety percent of state revenues. Despite this, the country still has one of the highest GNI per capita in Africa. However, the lack of security in Libya makes it difficult for foreign investors to do business in the country. Businesses may be interested in expanding their presence in Libya. Even though the country is recovering from a recent crisis, business conditions in the country may remain volatile.