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GROUP ASSIGNMENT Learning is a process within the organization which results in the capacity for changed performance which

can be related to experience rather than maturation. However it is realized that learning alone cannot develop the individual. Discuss

FedEx Corporation
Strategic Management Project

Prepared for: DR. Robert Ch. Wood BUSINESS 189 Strategic Management

Prepared by: SAN JOSE CONSULTING GROUP:

Billy CRANE Brad LANDTHORN Bob MIRI Jeremy RELPH Chris SANCHEZ Andrea VERNEROVA

December 9, 2003

TABLE OF CONTENTS
EXECUTIVE SUMMARY Chapter I: HISTORY 3-5 6 -9 .9-15

Chapter II: EXTERNAL ANALYSIS A. Industry Life Cycle B. Industry Dynamics C. Porters Five Forces D. Global Competition E. National Context

F. Opportunities and Threats Chapter III: INTERNAL ANALYSIS 16-23 A. Competitive Advantage B. Distinctive Competencies C. Strategies D. Four Building Blocks E. Strengths F. Weaknesses G. Image Chapter IV: BUSINESS-LEVEL 23-28 A. Business Level Strategy B. Issues in Differentiation C. Targeting Customer Needs D. Market Segmentation E. Differentiation of Quality F. Differentiation in World G. Advantages of Differentiation H. Impact of Strategy Chapter V: VALUE CHAIN 28-34 A. B. C. D. E. Value Chain Product Technology Impact of National Context of Industry Response to Differences Among Nations Global Dimensions of Strategy

Chapter VI: CORPORATE-LEVEL STRATEGY


A. Fedex Corporation B. Express

. 35-41

C. D. E. F. G. I.

Ground New Offerings Horizontal Integration Vertical Integration Fill in the Blanks, H. White Spaces Premier Plus 10, J. Mega Opportunities 42-

REFRENCES
44

EXECUTIVE SUMMARY

During one of his two combat tours in Vietnam, Federal Express CEO Frederick Smith got a quick lesson in survival from a crusty Marine sergeant. Lieutenant, the sergeant told Smith, theres only three things you gotta remember: shoot, move, and communicate.(Fortune, Nov. 1997) Some thirty plus years later, and at the helm of one the shipping industrys largest competitors, Smith has utilized that same tactical advice in the business world. His maneuvering of FedEx has incorporated an aggressive shooting strategy as the company has emerged into numerous shipping regions around the world such as Asia, and furthermore, FedEx continuously has been pursuing and developing a solid foundation and infrastructure for the company and its future. One example is the addition of a new hub in the Philippines, at Subic Bay. His movement has guided the company to innovate its products and develop with the needs of its customers. Finally, the use of communication has emerged as one of the companys greatest competencies, not only with customers, but internally as well. FedEx has always been a technology trailblazer, and the success of fedex.com is testament to that. The company was one of the first to harness the power of the Internet, launching its Web site in 1994 with a bold new package tracking application one of the first true corporate Web services. Soon after, FedEx became the first transportation company with Web site features that allowed customers to generate their own unique bar-coded shipping labels and request

couriers to pick up shipments. FedEx Ground is taking advantage of the wireless LAN technology by expediting the movement of shipping information from delivery workers' terminals to a central database.

It is with these tactics along with FedEx strong competencies and worldwide infrastructure, which will be discussed in further detail hereafter that will foster the companys success and eventual competitive advantage in years to come. FedEx provides many benefits to its customers. The shipping industry, however, is one of extreme competition. Not only are customers confronted with the choice of carrier, they are also confronted with a choice of means of shipment. It is further complex, as the pricing strategy of the sector has companies, for instance, who lead cost in one form of shipment such as ground and follow in another form of shipment such as international delivery.

FedEx foresaw the importance of differentiation early on, as did most of the sector players. FedEx realized that it was in the information business. Customers are not only concerned with the product getting from point A to B, but further, are interested in the knowledge of where the cargo originated from, its present whereabouts, destination, estimated time of arrival, price and cost of shipment. All these elements are just as important to some businesses and consumers as receiving a safe delivery. To support this need, and differentiate itself from competitors, FedEx created state-of-the-art technology for customers to track and validate shipments. Shipments are virtually traceable from their origin to their destination all with the convenience of the personal computer. Additionally, FedEx has forecasted the important strategic trend of a continuously global shipping market. The differentiation of products is a continuous process in this competitive industry as innovations are often quickly imitated. FedEx strives to develop innovations and listens to customers wants and needs.
Further meeting the needs of customers worldwide, the company has invested extensively in global infrastructure. Fedex connects some of the most

important areas of the world that make up 90% of the worlds gross domestic product, some of the new hubs were built in the Philippines at Subic bay and in Europe at Charles de Gaulle, in Paris. Particular emphasis has been placed on gaining a strong presence in the spawning Asian market. Countries such as China, which had been predominantly exporting countries, are now large importers of goods from all parts of the World. Since 1984 they have expanded service to over 300 cities within China.(Business Source Premier)

It is with this keen sense of the big picture that FedEx finds itself without a current sustained competitive advantage within the shipping industry. The Fedex return-on-equity percentage of 10% falls far below the industry average of nearly 20%. The company has invested heavily in aircraft and development of strategic worldwide airline hubs. In 1997, FedEx foresaw the opportunity of Internet commerce and its implications on the shipping industry. It is this same intuition that we at the San Jose Consulting Firm believe FedEx is positioning themselves as the future leader, with sustained competitive advantage, in the international market of the shipping industry.
The extensive infrastructure and resources FedEx has compiled are quite impressive. The company has added several optimum hubs, the Euro One Hub in Paris, the Asia One Hub at Subic Bay, and the new Iraq hub to increase the reach and accessibility in blossoming new economies and manufacturing locations. This infrastructure, coupled with FedExs continuous innovations and fulfillment of customers needs, is what will create continued success, and eventual sector competitive advantage in the years to come.

Chapter I: HISTORY
Key events and dates in the history of FedEx Corporation. (In italics: the entry of FedExs major competitor, UPS Corporation.)

1907 UPS created by Jim Casey as the American Messenger Company in Seattle, Washington. 1953 - UPS resumes air operations. Blue Label Air provides two-day service to Chicago, Detroit, and several major cities on the east and west coasts. 1957 - UPS serves areas of five states within 150-mile radius of Chicago. 1971 Federal Express Corporation is founded in Little Rock, Arkansas. Frederick Smith realized the tremendous need for one to two day package and airfreight delivery that was better than the current distribution system. 1973 - Federal Express relocates operations to Memphis, Tenn. On the first night of continuous operation, 389 Federal Express employees and 14 aircrafts deliver 186 packages overnight to 25 U.S. cities and the modern air/ground express industry is born. 1975 - Federal Express installs the first Federal Express Drop Box.

1975 - UPS forges "Golden Link," becomes first package delivery company to serve every address in the 48 contiguous United States. 1977 - After two years of lobbying led by Federal Express, Congress passes Public Law 95-163 enabling FedEx and other cargo airlines to use larger aircraft with no geographic restrictions on routes. 1977 - UPS provides air service to all 50 U.S. States 1978 - Federal Express Corporation is listed on the New York Stock Exchange; ticker symbol is FDX. 1981 - Federal Express introduces the Overnight Letter. Federal Express begins international delivery with service to Canada. Federal Express opens its Super Hub adjacent to Memphis International Airport. 1981 UPS purchased first aircraft for use in air delivery service. 1983 - Federal Express becomes the first U.S. company to reach revenues of $1 billion without merger or acquisition. 1984 - Federal Express acquires Gelco Express International and launches operations in Asia Pacific. The first PC-based automated shipping system, later named FedEx PowerShip, is introduced. 1985 - RPS Inc. (now FedEx Ground) is founded in Pittsburgh, Pa., and introduces bar code labeling to the ground transportation industry. 1985 UPS started international air service between U.S. and six European countries. 1986 - Federal Express introduces the SuperTracker, a hand-held bar code scanner system that captures detailed package information.

1989 - Federal Express purchases Flying Tigers to expand its international presence. 1990 -Federal Express becomes the first company to win the Malcolm Baldrige National Quality Award in the service category. 1990 UPS - first scheduled flights to Asia on UPS aircraft. 1992 UPS - electronic tracking of all ground packages begins. 1992 - UPS is delivering to more than 200 countries and territories; delivering 11.5 million packages and documents a day for more than one million regular customers. 1993 - RPS (now FedEx Ground) exceeds $1 billion in annual revenue in its ninth year of existence, recording the fastest growth of any ground transportation company. 1993 - The UPS Logistics Group is established to provide global supply chain management solutions. 1994 - Federal Express officially adopts "FedEx" as its brand for recognition as the worldwide standard for fast, reliable service. - FedEx launches fedex.com as the first transportation Web site to offer online package status tracking, enabling customers to conduct business via the Internet. - FedEx Ship software (now FedEx Ship Manager QuickShip) allows customers to process and manage shipping from their desktop. 1994 - UPS.com goes live. 1995 - FedEx acquires air routes from Evergreen International with authority to serve China.

FedEx opens the Asia Pacific Hub in Subic Bay, Philippines, launching the FedEx AsiaOne Network. 1996 - RPS (now FedEx Ground) achieves 100 percent coverage of North America. 1998 - FedEx acquires Caliber System Inc. and creates FDX Corporation. 1988 - UPS receives authorization from the FAA to operate its own aircraft, thereby officially becoming an airline. 1989 UPS worldwide Express Service expands to deliver packages and documents to more than 175 countries 1999 - FedEx Marketplace launches on fedex.com, providing easy access to online merchants that offer fast, reliable FedEx express shipping. - FedEx Corp. acquires Caribbean Transportation Services. 2000 - Parent company FDX is renamed "FedEx Corporation." Services are divided into companies that operate independently yet compete collectively: FedEx Express, FedEx Ground, FedEx Global Logistics, FedEx Custom Critical and FedEx Services. - FedEx Ground launches FedEx Home Delivery, an innovative business-toresidential service, in major U.S. markets. - FedEx Trade Networks is created with the acquisitions of Tower Group International and WorldTariff. - FedEx Custom Critical acquires Passport Transport. - FedEx teams with Amazon.com on a major e-commerce event, delivering the book "Harry Potter and the Goblet of Fire" to 250,000 eager customers on the Saturday of its release.

FedEx

introduces

customer

technology

solutions

including

redesigned

fedex.com, FedEx e-Commerce Builder, FedEx Global Trade Manager and FedEx Ship Manager. 2001 - FedEx Express and the U.S. Postal Service forge a public-private alliance. FedEx Express provides air transportation of some U.S. mail and places FedEx Drop Boxes at post offices nationwide. - FedEx Corp. acquires American Freightways, a less-than-truckload carrier serving the 40 eastern states in the U.S. 2001 UPS launches direct flights to China with China Express 2002 - FedEx Corp. brands two of its LTL companies, American Freightways and Viking Freight, together as FedEx Freight. - FedEx Trade Networks reorganizes; Tower Group International becomes FedEx Trade Networks Transport & Brokerage Inc., and a new subsidiary is created, incorporating the services of WorldTariff, called FedEx Trade Networks Trade Services. - FedEx Home Delivery completes its expansion to serve virtually 100 percent of the U.S. population. 2003 - FedEx marks a 30-year milestone; Federal Express (now FedEx Express) began its first night of continuous operations in 1973. - FedEx teams again with Amazon.com - FedEx Express and FedEx Home Delivery delivered over 400,000 copies of "Harry Potter and the Order of the Phoenix" (up from the previous release of 250,000) in a single day. (About FedEx, FedEx Historical Timeline; About UPS, Company History).

Chapter II: EXTERNAL ANALYSIS

A. Industry Life Cycle FedEx offers a wide range of transportation services and they accommodate to the widest range of shipments. FedEx is in the shipping services industry, which is an oligopolistic industry with few established competitors. The shipping services industry can be classified as being in the mature stage of the industry life cycle. The few competitors in this industry, such as UPS, DHL and USPS, in addition to FedEx, each have their own brand loyal customers and low cost operations that create significant barriers to entry into this industry. As for the intensity of competition, in mature industries "companies tend to recognize their interdependence and try to avoid price wars." (Hill Jones, p.57) For mature industries a stable demand reduces the threat of intense rivalry between the established companies. However, unpredictable economic activity can cause a "trickle down" effect, such as a slump in an economy causing a decrease throughout industry demand, and as companies fight to make money a price war begins among companies in an industry, therefore, price leadership can be broken down by unpredictable future events.

B. Industry Dynamics The shipping service industry is very dynamic. The variety of consumers needs explains the energetic nature of this industry. Global Corporations, E-Commerce Companies, small businesses, as well as individual consumers all have a need to ship packages or documents to other businesses or individuals; however, the nature of these services will vary. IBM Corporation, for example, is a large company that depends on shipping their products to a large extent. Due to the IBMs large shipping volume, their shipping needs call for specific conditions provided by their shipping service provider, FedEx Corporation. IBM uses discounts on large quantity of shipments. In addition, they can use FedEx Corporation for aid with the customs documentation that is required for shipping internationally. The shipping industry

needs to reflect the dynamics of other industries to keep up and sustain in todays ever changing environment. The major innovation that has reshaped the shipping service industry and changed the world in the past decade is the Internet. With the use of internet and information technology, customers do not have to drive to drop of their packages at the nearest location any more. They can simply order a pick up on the internet or by calling in. This technology also makes it possible for customers to receive information on the shipment status at any time . This might seem as an established form of doing business in shipping service industry. However, many of us do not realize that it has been only since 1994 when FedEx established the first tracking applications website and provided each customer with a unique bar code to individualize each shipment. This form of shipment tracking already provides customers with a very convenient way of staying in touch with their shipments from pick up to delivery. Yet, todays information technology allows for even better way to do that, the wireless solution. An example of wireless solutions that FedEx offers to its customers is the accessing package tracking data through FedEx ground and home delivery web enable devices. These phones or personal data assistance (PDAs) allow customers to access tracking information from virtually anywhere and anytime. (About FedEx, Wireless Solutions) The shipping service industry, like many other industries, constantly strives to incorporate technological innovations to meet their customers ever more sophisticated needs. FedEx is not alone in the transportation industry that implements new technology in their way of doing business. One of their major competitors, UPS, is also taking advantage of new technology. In the latest press release from September 23, 2003, UPS Suite of New Technologies Promises Better Customer Service, Operating Efficiency, UPS reveals new technology system, including software, hardware and process changes to deliver customized solutions and even more reliable service. These service enhancements include the ability to handle unique or unusual

delivery instructions to offer more customized time commitments and to allow customers to make in-transit changes on package deliveries. Innovation is transparent not only in FedExs operations but also in the way its competitors, like UPS, do their business. As stated in UPSs press release: These flexibilities correspond to todays complex global supply chains that demand speed and frequent change. C. Porters Five Forces Applying Porters five forces model to the industry is not an easy task provided that FedEx Corporation provides various shipping services. For simplicity, we examined and applied the Porters five forces model to the ground and air-shipping sector. In FedEx, these two sectors are represented by FedEx Express and FedEx Ground. FedEx Express is the world's largest express transportation company. FedEx Ground, on the other hand, is North America's second largest provider of smallpackage ground delivery service, following the lead of UPS. Other segments of shipping service industry are for example e-commerce and supply chain management services, which are not included in the Porters five forces analysis.

1. Risk of new entry by potential competitors The barriers to entry are very high. One of the reasons that there is a high entry barrier is the high fixed cost associated with establishing the international transportation network. This includes hubs, ground transportation vehicles, air fleet, etc. Additionally, existing companies can take advantage of the absolute cost advantage achieved by large volume of shipments and economies of scale. 2. Extent of rivalry between established firms Established players in shipping service industry complete rigorously for a market share, as demonstrated by the constant battle between FedEx and UPS, the company who responses first to the constantly changing environment wins. Established companies have to strive for continuous improvement in quality, lowering price, and innovation. There is very low switching cost for consumers in this industry making rivalry even more intense. In addition, intense rivalry is also

due to the fact that maintaining the infrastructure of an express delivery company presents an exit barrier due to high fixed costs. 3. Bargaining power of buyers The bargaining power of large buyers in shipping service industry is high. Cost associated with switching from one shipping service to another is very low. Therefore, buyers can turn to a shipping provider that offer faster service, lower price, or service innovation with ease. This is especially true for large corporations, like IBM, which ships in large volumes and can bargain quantity discounts. 4. Bargaining power of suppliers The supplier power within this industry is fairly low. Large shipping service provider can affect prices of supplies, like packaging materials. This is because they buy in large quantities and can turn to different suppliers easily. 5. Threat of substitute products There are not many substitutes to shipping. In this day and age where many businesses have strong online presence and a small physical presence, it would be difficult to find a substitute in delivering their product. Shipping services are very much similar to a commodity, in that it is not easily replaced with another service or even a similar service.

Graph 1: Porters five forces model FedEx Corporation

Potential Competitors LOW to MODERATE Suppliers Power LOW Existing Rivals HIGH - FedEx, UPS, DHL Substitute Products LOW - Shipping - commodity

Buyers Power HIGH large buyers low switching cost

D. Global Competition The competition in the package delivery service is very global. FedEx Corporation competes with UPS (United Parcel Service), DHL, USPS (United States Postal Service) as well as a host of other smaller companies at home and abroad. FedEx delivers packages to 214 countries as do most major players in this industry like UPS and DHL. As well as competing against bigger players, FedEx must also compete with regional delivery companies and international delivery companies that serve only their country. Competition is not becoming more global due to the fact that companies are merging and the industry is consolidating and companies are making alliances with each other. These are the visible signs of a shakeout occurring within an industry. E. National Context

The shipping service industry in which FedEx operates is a complementary industry to the majority of other industries. The industry has several leaders all of whom provide various services with unique twists on the service offering. Local conditions largely influence the operations of FedEx Ground. In addition, FedEx also needs to monitor the moves of the established leader of this sector, UPS. FedEx Express, on the other hand, faces all the affects of changing global environment. The operations of FedEx Express need to respond to local demand conditions, factor conditions and related and supporting industries of each country that FedEx serves. Factor Endowments: FedEx Corporation in the United States administers variety of advanced factors of production. These are managerial sophistication, logistics know-how, and physical infrastructure. factors which FedEx developed for Logistics is one of the main advanced managing its complex hubs. Physical

infrastructure that FedEx uses is not only airports but also roads and ports. Local Demand Conditions: Demand conditions in the United States thrusts FedEx, as well as its competitors, to constantly upgrade its services. As customers continually desire their shipments delivery faster and cheaper, the shipping service industry must constantly improve its services and customer responsiveness. The rivalry of existing competitors is very intense and the low buyer switching cost only fuels it. Specific shipping needs of various companies and individuals demand innovative approaches and the extensive use of technology in this industry. Competitiveness of Related and Supporting Industries: The presence of internationally competitive suppliers and related industries in the United States serves as another complimentary attribute of national advantage for FedExs operations. Intensity of Rivalry: As mentioned earlier, the shipping service industry faces rigorous rivalry for market share. Established companies have to strive for continuous improvement in quality, lowering price, and innovation. There is very low switching cost for consumers in this industry making rivalry even more intense. In addition, intense rivalry is also due to the fact that maintaining the infrastructure of an express delivery company presents an exit barrier due to high fixed costs.

Rivalry forces companies in this industry to improve its services, making them better international competitors.

F. Opportunities and Threats

Table 1: Opportunities and threats FedEx Corporation

Opportunities

Threats

- The cost of infrastructure of express - Maintaining the infrastructure of an delivery companies are a barrier of entry to new comers - FedEx leadership in global express delivery - As long as the nature of our socioeconomic delivery - E-commerce is creating an increased need for express delivery expansion environment express delivery company is an exit barrier because of high fixed costs - Capitol is acquired through the volume of sales, so the high fixed costs can hurt

exists, when times are slow nearly impossible to become the clear industry leader - The nature of the industry shows very - The E-tailing industry demands lower shipping rates and charges to pull customers from the retailing industries - Major competitors: UPS, the airborne DHL

there will always be a need for express - Due to the nature of the industry, it is

- Globalization offers opportunities for low returns on invested capitol

Chapter III: INTERNAL ANALYSIS

A. Competitive Advantage
FedEx does not have a competitive advantage in the shipping services industry because their return on investment is below the industry average. When the FedEx return on equity percentages are compared to the returns of their leading competitor, the United Parcel Service (UPS), the FedEx returns are half that of the shipping giant. The average return on investment for FedEx over the past four With such a low return on years is around 12% and the industry leaders four-year average is around 25%. The industry average is figured to be just above 20%. shipping services industry. investments, FedEx does not appear to have a competitive advantage in the

B. Distinctive Competencies
FedEx does not so much possess distinctive competencies, as it has strong existing competencies. FedExs existing competencies include brand equity, strong infrastructure and a fierce commitment to innovation and technology. These competencies enabled Although FedEx to become the premier express delivery company in the world.

FedEx still trails UPS and DHL in terms of competitive advantage, these competencies will enable FedEx to make inroads and eventually gain a competitive advantage in the shipping industry. The FedEx brand name is synonymous with express package delivery. When a

company or individual needs to send a package in a quick and timely manner, they say FedEx it. They dont say UPS it. FedEx has positioned itself in the minds of its customers that they (FedEx) are the company you turn too when you need it there

fast. A quote from allaboutbranding.com says it all, FedEx is a great brand. Great brands provide a source of identification. These brands differentiate great brands and cement their leadership credentialsi assurance of quality. This is a hard thing to imitate because you can say that youll get it there, but can you really? FedEx owns a large fleet of aircraft and has an enormous infrastructure to back it up, for anyone to viably compete with them would take lots of capital and a whole lot of advertising. FedExs next existing competency is its infrastructure. network of hubs, airplanes and trucks. FedEx has spent billions,

over $1.5 billionii in 2003 alone in capital expenditures, to create a worldwide This is something that would be hard to imitate because, again, of the huge amount of capital needed to compete directly with FedEx and the fact that FedEx could cut prices to harm new entrants into the market.

FedExs third existing competency is its dedication to innovation and embracing new technologies. This commitment to better serving their customers is what makes FedEx Express the number one express delivery company in the world with over a fifty percent market share in the express package delivery segment of the shipping industry. An example of how FedEx stays on top of new technologies was the fact that FedEx was the first company to embrace the world wide web and this attitude has made the FedEx website the number one website in the shipping industry with over one million hits a day and a network of over two million people connected through its website. Another example of FedExs commitment to innovation and technology are its wireless solutions, the first in the industry, which enables its couriers to send customer package information via a magic wand over a network for faster shipping times; its website allows customers to track their packages from the moment it was sent to the moment it is delivered, another area in which FedEx was the first in; and finally, FedEx has partnered with the university of Memphis to open the FedEx technology institute which will give FedEx first crack at the newest technologies that will be developed in the future. iii This dedication to embracing the newest technologies to better serve their customers is not a new

thing as Frederick Smith of FedEx said in 1979 The information about a package is just as important as the package itself.iv FedExs vision, to be the worlds leader in the shipping industry, has motivated them to build on their existing competencies through a constant focus on customer satisfaction, which guides FedExs strategies. Before the 1980's, UPS was the number one express delivery company. But by the early 1980's the Motor Carrier Act and the Staggers Rail Act deregulated trucking and railroad industriesv paved the way for FedEx to compete with UPS on a more level playing field. guard. FedExs commitment to quality, innovation and customer responsiveness caught UPS off By the time UPS made the appropriate adjustments, FedEx had already seized a sizable chunk of their market share and now has the Agreatest share of the overnight delivery market.vi

C. Strategies

The current strategies that are pursued by FedEx do build on the distinctive competencies that they have cut out in the past three decades. FedEx continues to offer faster delivery times and expand their global network. On September 2nd, 2003 FedEx announced that they would be offering next day delivery to and from Taiwan.vii This further defines in the minds of its customers that FedEx as having faster delivery times, as this is the first firm in this industry to offer a direct flight from South China to the Continent of North America. Another industry first is the entrance that FedEx has made in Iraq, becoming the first shipping firm to offer door-to-door pick-up and delivery service in that country. This will continue to build their distinctive competence of offering services where no one else does. By opening up a hub in Iraq, FedEx has established themselves as an industry innovator of moving into new markets, putting them one step ahead of the competition. When the competitors of FedEx decide to finally move into that market it will be difficult to make up the step that FedEx has already established.

Another aspect of the strategy that is pursued by FedEx is along the technology front. FedEx offers more automated and package tracking options, from the plain barcode to wireless, for their customers than any other firm in the industry. FedEx also continues to push their technology advances with the FedEx Technology Institute that is opening in the fall of 2003 at the University of Memphis.viii FedEx contributed over $5 million to the construction and establishment of the institute that will be a joint venture with the state and local governments. While FedEx is expanding and reaching into new markets, they do not seem to be building any new distinctive competencies and rather just relying on the ones they already posses. FedExs distinctive competencies are based on their strong resources as well as their capabilities to operate in the shipping industry. belongs to their aircraft fleet. To some of FedExs major resources, that distinguish their operations from their competitors, undeniably We can observe the extent of this distinction by Fed Ex is a younger comparing FedEx to one of their major competitors, UPS.

company (FedEx Express was founded in 1971ix) in comparison to UPS , which was founded in 1907. Still FedEx Corp was able to establish an air fleet of 638 aircrafts. x Even when we add their 319-chartered aircrafts to UPSs air fleet, UPS still falls way below FedEx in respect to this type of resource. It is not difficult to distinguish the barriers to imitate this kind of distinctive competence. aircrafts. Additional distinctive competencies that FedEx have, also arise from firm-specific tangible and intangible resources, namely, FedExs hubs and package handling systems; its package tracking and customer support function and its logistics support. Again, the main barrier to imitate these firm-specific resources is the high cost associated with acquiring them. FedExs package tracking ad customer support functions as well as their logistic support are examples of the firms distinctive competencies as well. The barriers to imitate FedExs package tracking and customer support functions are based on the fact that FedEx was the initiator in establishing the first tracking applications website and providing each customer For the most part, the biggest barrier to imitate FedExs air fleet is the high cost of acquiring more

with a unique barcode to individualize each shipment. That allowed FedEx to gain proficiency at these systems and knowledge about the functional operations.

D. Four Building Blocks


When evaluating FedEx against the four generic building blocks of competitive advantage (efficiency, quality, innovation and customer responsiveness) it has been determined that FedEx does not have a competitive advantage. When considering efficiency, FedEx was the first in its industry to embrace wireless technology which enabled FedEx employees to access information from the companys information systems network 24 hours a day as well as using wireless collection data via a barcode and a magic wand that employees use to scan packagesxi This investment in capital productivity enables FedEx employees to quickly enter packages into the companys package tracking system, which reduces the possibility of error. However, they are still lackluster when compared to UPS ground delivery service. These investments that FedEx has made in efficiency may soon pay off. In terms of quality, FedExs commitment to quality is very apparent. They invest heavily in new technologies that enable them to improve their service and make it more reliable and valuable in the eyes of their customers. They have improved quality by introducing innovative technologies such as package tracking on their website, address checker which is a Aconvenient tool that can help you reduce the costly mistakes, late deliveries and dissatisfied customers resulting from incorrect addressesxii This commitment to improving the quality of their service with add-ons creates a more valuable service in the eyes of its current and potential customers As mentioned above, FedEx has a very vested interest in continually investing in new technologies that will aide in improving their service. They are set to open a FedEx technology institute in a joint partnership with the University of Memphis as stated earlier in the chapter. FedExs investment in future technologies will ensure

that they will not be caught off guard when a new technology is used in their industry, in fact they will probably be the one using it, and using it first. FedEx values its customers, and that is why FedEx is continually trying to identify and satisfy its customers needs through the use of new technologies which make it easier and easier for customers to use FedEx and adds value to the service they are using. This is making it easier for current and potential customers to see the An example of this is that FedEx just They have also recently partnered difference between FedEx versus UPS.

extended it drop-off times by three hours to give its customers more time to make the deadline for next day express deliveryxiii. with the USPS to include in post offices a FedEx drop off box xiv. These are both the results of customers wanting longer hours and more locations to drop off their packages. FedEx answered the call. FedEx is strong in all four areas of the building blocks of competitive advantage, however they do not as of yet have a competitive advantage over their rival, UPS. This is not because UPS is better at the four building blocks but rather because FedEx has made so many capital investments over the years that their ROIC is not as good as UPS. But that same expenditure in invested capital will probably give FedEx a competitive advantage in the years to come once their investments start to pay off.

E. Strengths
FedEx has much strength. They are very innovative in coming up with new ways to add value to their customers experience with FedEx. They have always been willing to embrace new technologies as well as create some of their own as shown in the example of FedEx using wireless technology to better track packages as well as launching its website with lets customers track their packages till it reaches its destination. They are responsive to their customers needs, as is evident in FedEx extending their drop-off times to better suit the needs of their customers. They also

own a large fleet of aircraft and have an extensive hub and spoke network which extends to more than two hundred countries around the world.

F. Weaknesses
FedExs weaknesses derive from their inability to differentiate themselves on a wide scale basis from UPS; this is hindering their ability to achieve an industry wide competitive advantage, although they do dominate the express delivery segment of the market. Another weakness is FedExs high cost, because of their constant expenditures in their infrastructure, they are unable to lower their prices and thus take away market share from UPS. There are several strengths and weaknesses of the FedEx Corporation that are not captured in the four generic building blocks of efficiency, quality, innovation and customer responsiveness. There are other elements of the company that are not as easily measured such as the company image and customers perception of the product and FedEx.

G. Image
The element of image is crucial to large companies like FedEx. When competing in

an industry with such large and well-run players, image is a key differentiator when the purchase-decision arises. According to Forbes magazine (Jan 02), Being most admired is all about delivering what you promise to multiple audience, and thats something FedEx has down pat...FedEx has successfully transcended its image as simply an air express carrier for business to become a one-stop shop for any shipping need. FedEx Corporation competitive market position is continually reinforced through a positive advertisement campaign and its continual effort to provide for customers needs. A market leader must extend its hand beyond business improvement arenas and into the community. One way FedEx could achieve a competitive advantage is

by appeasing these external elements.

Earlier this year FedEx announced steps

they are taking to reduce their energy consumption and carbon emission. FedEx collaborated with Environmental Defense, a nonprofit organization, to introduce a low-emission hybrid electric powered delivery vehicle that could become the standard medium duty delivery truck in FedExs fleet .

Chapter IV: BUSINESS-LEVEL


A. FedExs Business Level Strategy
FedExs strengths in logistics, operations, and technological innovation allow them to pursue a differentiation business level strategy. FedEx works to stand apart from its competitors by creating a level of service that is difficult for competitors to match. FedEx has clearly been identified as an innovator, but what they need to get across to their customers is that they provide a high level of quality service. FedEx charges higher prices for its services than many of its competitors in the industry. This is considered a premium that a customer pays for the quality of service FedEx provides. By differentiating their standard of quality from their competitors, FedEx lets their customers know that if they are willing to pay more, it will be worth it. The purpose of differentiation is to establish a strong customer base which understands that FedEx does offer a superior service than its rivals. While all players in the industry are capable of making fast deliveries, FedEx is the most customer-friendly. Some of the special services FedEx offers are the most support, a money back guarantee, and the capability to pick up packages from the customers home. FedEx goes far out of its way to differentiate itself from its rivals.

B. Issues in Differentiation
However, due to the nature of the industry and the awareness level of the customer, differentiating themselves is proving to be difficult. When it comes to

shipping, customers are very price sensitive. They will usually just decide on the cheaper carrier, so there isnt much brand loyalty at all. The typical customer doesnt care how well FedEx can deliver around the world, or how innovative their logistics or technology is. They usually want their package delivered from point A to point B for as cheap as possible. For these customers, the lines of quality service are blurred by affordability. Therefore, FedEx needs to differentiate itself in as many ways as possible from its competitors, namely UPS. The less they resemble their rivals, the better their customers can perceive their level of quality, becoming more willing to pay the premiums.

C. Targeting Customer Needs


FedEx understands that different customers have different needs. Therefore FedEx has divided itself into six different segments; FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, and FedEx Supply Chain Services. Each service is targeted toward a specific segment of the market, according to the specific needs of different customers. By specifically targeting customers by their needs, FedEx hopes to serve the immediate and psychological need for those who need a guarantee on time and delivery. Customers may require different services at different times, falling into more than one category. A company may need a document express delivered overnight a few states away, and then need freight something the next day. FedEx understands that there are a variety of needs their customers could have, and have segmented the market accordingly. That way, no matter what the customer may need to do, FedEx will be able to serve them.

D. Market Segmentation
FedEx has divided itself into different business units to better serve customer needs. Their goal is to operate independently of each other yet to compete collectively. This segmentation is also how it has differentiated itself from its competitors. By splitting up into different business units, each segment can better concentrate on its own market rather than concern itself with the whole market. The largest segment, FedEx Express, is geared to satisfy time and day definite service for anyone needing speedy delivery of small packages (documents, legal papers, etc.), with a money back guarantee to ensure an on time delivery. The FedEx Ground service caters more to a business-to-business small and medium package delivery with less time and destination restraints. They also account for business to home delivery with FedEx Home Delivery. A third segment is the heavy package segment, FedEx Freight. This service allows customers to send packages of over 150 pounds, regional and interregional, within the continental US. This caters to large shipments that have flexible time restraints. The remaining substantially smaller segments are the FedEx Custom Critical, which provide shipping of products requiring special care in handling or specially equipped vehicles, FedEx Trade Networks, which provide end-to-end support for international trade, and finally FedEx Supply Chain Services which synchronize the movement of goods for enhanced customer satisfaction. With all of this evident it can be said that FedEx segments its markets according to the needs of the customers and not by demographic regions. FedEx Express and FedEx Ground do the majority of the companys business, and are currently its most profitable aspects. FedEx Express and FedEx Ground account for over $14 billion in revenues. FedEx Express gives a good a picture of the companys overall success because that is what FedEx prides itself on, and what they do best. FedEx is associated with express delivery because of their capability and promise to deliver.

E. Differentiation of Quality
FedEx is able to meet the needs of all these segments. They have spent an extraordinary amount of capitol developing their infrastructure, just so they can make the best promises to their customers. FedEx transports more than 3 million items to over 200 countries each day. Within each business unit are specific functional units that perform particular functions. The main functional units are logistics and operations for its transportation system. These units assure the coordination and smooth flow of FedExs deliveries. The end result is a high level of quality service. Their service includes customer responsiveness and innovations such as; its aircraft fleet, its hubs and package handling systems, package tracking, customer support functions, and logistics support. Not only does this help FedEx follow through with their promises, but in some ways that are superior to that of the competition.

F. Distinctive Competencies
FedEx does not so much possess distinctive competencies, as it has strong existing competencies that allow it to compete competitively with industry leader UPS. These competencies include a very timely customer response time and cutting edge technology and innovation. FedEx has its own large fleet of aircraft, extremely efficient storage and packaging capabilities, and tracking functions. This allows FedEx to follow through with its guarantee to customers that their packages will get where they need to go in the time promised. FedEx has a strong commitment to its customers and is constantly working on being able to meet a variety of needs through technology. FedEx also has a competency in technology and innovation. They even have a university that helps them develop new innovations. FedEx has a global mindset and are presently

seeking to grab a global market share. This wouldnt be possible without a constant push to improve upon and develop new technologies to improve their service.

G. Differentiation in the World


Despite their efforts to differentiate themselves from their competitors, they are often compared to UPS in the US. Since UPS is generally cheaper, they hold the competitive advantage in the US market. However, on the global level, FedEx is much more visibly differentiated from its competitors. They can make promises that their rivals cannot because of their resources. With the expected globalization of big business in the future, it is likely that competitors will work to eliminate this differentiation by establishing their own infrastructure. But for now, FedEx stands on top as far as global express delivery is concerned. FedEx has hubs all over the world, and a fleet of over 600 aircraft. This is very difficult for other companies to establish. Because no one else has the infrastructure that FedEx has, people think of FedEx for global delivery.

H. The Advantages of Differentiation


The advantages of FedExs differentiation strategy are that if they are able to set themselves apart from their competitors, they can create a larger customer base and perhaps brand loyalty. Based on their history and commitment to innovation, it is easy for FedEx to introduce new package tracking systems, shipping hubs or a greater general efficiency. All of these things give them the upper hand over the competitors that cannot duplicate their methods. Another advantage of their strategy is that by becoming differentiated in the eyes of the consumer, FedEx would be justified in charging a higher price for its services than most other shipping firms.

I. The Disadvantages of Differentiation

However, the disadvantage to their strategy is in the challenge of being differentiated. Customers have very low switching costs, enabling them to easily turn to alternatives other than FedEx. While FedEx does offer a superior service, it is very difficult to convince the general masses of this, and whether the price is worth it. It has been very costly to differentiate itself, and will continue to be costly if FedEx intends to remain so.

J. The Impact of their Strategy


Despite FedExs considerable investments, they do not have a sustainable competitive advantage nor do they possess distinctive competencies. With all of the hubs that FedEx is operating and opening up in foreign markets it could be said that they are on their way to building a competitive advantage. While they may be a few years out on this they are on the right track. Currently, UPS controls the domestic ground market, which has guaranteed them a large portion of the domestic market share, as well as above industry average profits. However, just as UPS took a few years to build up that domestic infrastructure, FedEx is building an international infrastructure to support building a competency for that market. Currently no other shipping firm is pursuing the worldwide network as intensive as FedEx. It could be said that the current strategies that FedEx is pursuing, as well as the lack of action that is being taken by the other leading firms will build a distinctive competency that will eventually take them to having a competitive advantage. There are a couple of trends that are playing in the favor of FedEx. The first of which is globalization. With every industry buying and selling products around the world, FedEx is poised to offer them the solutions to transporting those products better than any of its rivals. The second trend that is in the favor of FedEx is the rise of Internet commerce. This is in part linked to globalization, as consumers all over the world can purchase products on the Internet that need to be shipped from the business to the consumer. FedEx is poised to offer a solution to this problem, and if successful, will have a very differentiated service.

Chapter

V:

VALUE

CHAIN,

TECHNOLOGIES,

GLOBAL

STRATEGY

A. Value Chain
The value chain for FedEx Express can be seen as starting with the pick-up of the packages. FedEx employees gather the packages from various locations such as drop boxes, businesses and residences. Value is created for the customers by making package pick-ups possible just about anywhere or anytime. FedEx has a money back guarantee for those people whose packages do not arrive on time, therefore creating value by assuring timely delivery of the packages. After the packages are initially picked up, they must then be transported to a hub. The hub is a central location where packages are sorted according to their destinations. The packages will likely pass through many hands before reaching their final destination. The packages stay at the hub until they are picked up and shipped either by truck or plane. The package delivery is probably the greatest value creation activity for Fedex Express. The drivers of the planes and trucks must perform their activities The drivers must efficiently to increase the perceived value of the service.

absolutely no matter what, get the packages to their destinations on time, and they do a good job in doing so. By meeting and exceeding the customers expectations value is increased with each positive result. The final primary activity is customer service. This function is to provide after sales service and support, however, FedEx provides customer service during the use of the service by letting customers track their package while its in route. This creates

extreme value for customers because they are able to check the status of their package at any given moment for an increased sense of security. Each of the primary activities is able to take place due to support activities such as company infrastructure, which is planes, buildings, trucks etc. Information systems, another support activity, allow the customers to track their products and place orders on-line. Materials management and human resources are additional support activities. Materials management can also be referred to as logistics, or the flow of goods or services through production into distribution. Overall, the support activities allow the primary activities to take place and function correctly. FedEx has a competitive advantage with their information systems and possibly company infrastructure. Their advanced information systems allow for precise package tracking, which few other companies offer. The customers can track their package by way of the Internet, without having to contact someone from customer service, which can be very time consuming. Other companies provide tracking numbers for packages but often times it is a hassle to track down a package. The massive fleet of airplanes, automobiles, and employees add up to an enormous company infrastructure. delivery service. wants it delivered. This infrastructure allows FedEx to have a very reliable FedEx is very confident with their time restricting package

delivery service, they guarantee their packages arrive on time when the customer

B. Product Technology
FedEx Corporations main businesses in the transportation industry are the FedEx Express and FedEx Ground. As found in our previous research, FedEx Express and FedEx Ground account for over $14 billion in revenues.xv While some technologies are specific to these two business units, FedExs dominant product technology adheres to all businesses in the transportation industry in which FedEx operates.

The dominant product technology used by FedEx for managing operations of all business units in the transportation industry is the internet. FedEx has always been a technology trailblazer, and the success of fedex.com is testament to that. The company was one of the first to harness the power of the Internet, launching its Web site in 1994 with a bold new package tracking application one of the first true corporate Web services. Soon after, FedEx became the first transportation company with Web site features that allowed customers to generate their own unique barcoded shipping labels and request couriers to pick up shipments. Today, fedex.com hosts more than 6.3 million unique visitors per month and handles on average over 2.4 million package tracking requests daily. More than 2.3 million customers connect with the company electronically everyday, and electronic transactions account for almost two-thirds of the more than five million shipments FedEx delivers daily. The fedex.com Web site is widely recognized for its speed, ease of use and customer-focused features. The Web Marketing Association praised fedex.com as the "Best Transportation Web Site" and eWeek saluted it as a top ebusiness innovator. xvi

In addition to the Internet, FedEx also uses technologies specific to its FedEx Express and FedEx Ground businesses. Example of these technologies is the FedEx Solutions. In short, FedEx Solutions is a variety of electronic tools, applications and online interfaces for customers to integrate into their processes to shorten response time, reduce inventory costs and generate better returns and to simplify their shipping.xvii For example, Global Trade Manager is a comprehensive online resource to help identify the documents needed for international shipping. Technical standard is a set of technical specifications that producers adhere to when making the product or a component of it.xviii An example of technical standard that FedEx adheres to in its FedEx Ground business is an IEEE 802.11b. This wireless LAN standard, ratified in late 1999, lets data fly through the air at Ethernet-level speeds: up to 11Mbps. FedEx Ground is taking advantage of that start by expediting the movement of shipping information from delivery workers'

terminals to a central database. Wireless LAN technology lets FedEx Ground give its customers faster delivery confirmations, including signed proof of delivery. Last fall, the company began deploying wireless LANs at each of its more than 400 local pickup and delivery centers as part of an $80 million technology upgrade project. As the vans return home, the LAN automatically moves package data from drivers' portable computers to the database. xix As mentioned in the article Wireless LAN technology was designed to be open. This suggests that the standard is accessible to anyone and is therefore in the public domain. In my understanding, this standard was set by the IEEE P802.15 Working Group for Wireless Personal Area Networks (WPANs)

C. Impact of national context on the industry


The local demand conditions do not have a heavy impact on FedEx and the rest of the shipping industry. However, overall domestic demand does have a large impact on FedEx. With America being the worlds single largest economy, the demand to ship domestically is a large part of the business for FedEx. With the Ground Segment and Express Segment making just over $5 billion in revenues.xx This segment of FedEx cannot be downplayed just because FedEx is an international business. While there are not many related industries that cannot be seen as substitutes, the supporting industries are as varied as automobiles all the way to clothing. As we had stated before, many companies are moving toward the clicks and bricks approach of having a large online presence while holding a minimal physical presence. Each of these businesses needs an efficient means of transporting their goods to the customers; this is where FedEx plays a huge role. An increase in demand for these industries would directly affect the demand for FedEx and the rest of the shipping industry. Basically, it could be said that any positive increase in economic activity would have a positive affect on FedEx.

The intensity of rivalry in the United States for the shipping industry is pretty high. UPS and FedEx are constantly fighting for market share and the tag of being number one. While the companies do not openly attack one another, it is evident by their actions that they are in fierce competition for the top spot in the industry. This often helps FedEx, not necessarily gain market share, but growth in general. It has forced FedEx to stay on top of technological advances that would make it more efficient. It has also forced FedEx to examine the global market and constantly look for new markets to enter. Just recently FedEx became the first American shipping firm to open a hub in Iraq, and offering the only door-to-door service in Baghdad, Mosul, and Basra.xxi FedEx is also the only American firm to offer overnight delivery to and from China. With all this in mind, the national context plays a large role in the demand for FedEx and the shipping industry. While it could be seen that FedEx continues to grow, it is not domestic growth. In other words, FedEx is only growing because it is expanding to new marketplaces internationally. When the U.S. goes into economic downturn it can be seen that FedEx and the rest of the shipping industry takes a hit in demand as with all of its supporting industries. While America has not been the greatest peacemaker in recent years or months, it can be said that the reason for the growth by FedEx is because of the new markets that have opened, namely Iraq. With all this in mind, FedEx will continue to be helped in growing by the foreign policies of the United States that continue to open new markets.

D. Response to Differences Among Nations


FedExs worldwide marketing goal is to create a consistent, brand-building messaging and design across all customer communications. In continuing with the growth opportunity of globalization, and the service extension into new and untapped markets, FedEx attempts to unify the diverse markets by standardizing its product. This will increase efficiency of shipment and reduce costs through uniform corporate responsiveness.

FedEx should continue its unilateral product and marketing effort due to the fact that the ideals of speed and reliability of shipment are universal wants and needs of all customers, regardless of worldwide location.

Despite its efforts, this industry does encounter many regulatory and governmental restrictions in areas of taxation, limitations and legalities. To help customers of FedEx has various nations sort through the complications of these regulations, FedEx has recently introduced an online sight to aid for international shippers. based FedEx Global Trade Manager application. unveiled the first carrier-provided, online duty and tax estimator on its InternetFedEx designed the businessplanning tool to help customers obtain information before they ship about charges and fees they can expect in the overseas shipping process. This includes duty, excise, value-added tax (VAT), Most Favored Nation (MFN) rates and other governmental fees that are levied on international shipments to and from 42 countries.

E. Global Dimensions of Strategy


FedEx pursues a global strategy. Given the service they provide, we believe that they are pursuing the correct strategy. Since FedEx is a delivery service, which is in an industry with a global standard, there is not much need for them to customize their service for each country they do business with. This is consistent with the global business model. The FedEx global network spans 210 countries, broken down into 4 Express networks; Asia-Pacific, Canada, Europe-Middle East-Africa, & Latin America-Caribbean. As far as exporting and importing goes, these countries all have the same simple basic needs as far as timely delivery is concerned. FedEx does need to customize their service since it is standardized. This is consistent with their low cost structure approach that ties into a typical global strategy. Since they dont have to raise costs for customizing their service,

they are able to use their cost advantage for a successful aggressive pricing strategy. They are able to spend their resources on technology instead, maintaining their focus on the cutting edge and ability to deliver, rather than on customization. In each Express network, there are only a few key locations close to the action. These are the headquarters designated with the responsibility of managing that regions operations. Their established headquarters in the Asia-Pacific network is in Hong Kong. They have acquired a number of delivery businesses in their Canadian network to serve as multiple headquarters since 1987. In the Europe-Middle EastAfrica network, FedEx has facilities in Belgium, Dubai, and South Africa. Miami and 2 cities in Mexico serve as the headquarters for the Latin America-Caribbean network. A presence in a few key locations abroad is also part of a global strategy. To review, FedEx is correctly using a global strategy because they have a low cost structure, a globally standardized service, and a few key locations abroad that serve 210 countries.xxii

Chapter VI: CORPORATE-LEVEL STRATEGY


A. FedEx Corporation To understand the corporate level strategy of FedEx it is necessary to first know what industries they currently compete in, as well as where they stand within those industries. Currently FedEx is made up of six independent business units: FedEx Express, FedEx Ground,

FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, and FedEx Services, each compete in different sectors of the transportation industry in order to tailor the entire FedEx service to best fit each customers needs. Its parent company is the FedEx Corporation, which offers all of the strategic leadership, as well as the financial accountability for all of the business units. The business model that is followed at FedEx Corporation is Operate independently, compete collectively. Figure 1 lays out the decision making tree at FedEx Corporation.

Fred Smith FedEx President, Chairman, CEO


Figure 1 Organizational Chart, FedEX

Fred

Smith,

CEO,

T. Glenn, VP

Michael Corporate

Alan CFO

B.

Graf,

Robert Carter, Chief Information

Kenneth Masterson, General Counsel

The board of Directors sits in conjunction with the vice presidents and is responsible for an array of activities such as auditing, executive compensation, information technology oversight, and governance. Although FedEx Corporation is a the parent company of the six independent business units, FedEx Corporation offers strategic leadership at a corporate level and the operate on their own and are therefore solely responsible for their decisions and ultimate success. The top two performing companies, as well as the most widely known FedEx companies are FedEx Express and FedEx Ground.

B. FedEx Express

The first of the six independent units is FedEx Express. The president and CEO, David J. Bronczek heads this unit. FedEx Express is the worlds largest express transportation firm. It has three subsections of U.S., International, and Freight. Offering guaranteed service to 120 different countries for packages from 1- 2,200 lbs. FedEx Express accounts for over one-half of FedExs revenue.

C. FedEx Ground

FedEx Ground is the next business unit, headed up by Daniel J. Sullivan, president and CEO. FedEx Ground guarantees delivery to every business address in the U.S., Canada, and Puerto Rico. It currently accounts for a little over $3 billion in revenue.

D. FedEx New Offerings

While FedEx is a very large company that occupies a large portion of market share in the express delivery sector as well as the ground sector we have concluded that FedEx does not so much possess distinctive competencies, as it has strong existing competencies that allow it to compete competitively with industry leader UPS. These competencies include a very timely customer response time, cutting-edge technology and innovation. With the fact that FedEx does not have a competitive advantage, or distinctive competencies, yet is still the largest express package delivery service there are many directives that could be followed to attain both. This is obviously a long-term goal, however it can be seen that the undertakings have already begun. Its most recent endeavor, characterized as a diversification from its usual product offering of actual shipment of goods, is the newer service offering of consultation. Labeled FedEx Trade Networks, this newest division of the FedEx offerings showcases the companys vast competence of international shipping knowledge to an array of customers. These customers are provided value creation with the knowledge that can greatly increase efficiencys through the supply chain. FedEx Trade Networks offers a full range of international support services, including customs clearance, freight forwarding, Trade & Customs Advisory Services (TCAS) and trade technology solutions.

E. Horizontal Integration
Another note is the horizontal integration that has recently been carried out by FedEx. Horizontal integration is a way of trying to increase the profitability of a company by reducing costs, increasing the value of a product offering, managing industry rivalrys, or increasing the bargaining power of a company. an industry. These economic benefits are usually the rewards of company mergers and acquisitions in Horizontal integration is predominately characterized by similar companies merging together or acquisitions sought by the industry leaders.

FedEx has carried out horizontal integration for many years, from as early as the mid 1980s with their acquisition of the Flying Tiger air fleet to one of their most recent acquisitions of American Freightways in 2001. horizontal integration. The FedEx acquisition of American Freightways was the most recent effort of significant size toward FedEx completed its purchase of American Freightways in February 2001 for $ 1.2 billion. Since FedEx had already acquired Viking freight in the late 1990s, Viking freight and American Freightways, both independent operating companies under the FedEx corp. umbrella, will now be known as FedEx Freight. To address geographical issues, American Freightways will be known as FedEx Freight East while Viking Freight will be called FedEx Freight West. (CMP Media) With a singular brand name, Frederick W. Smith, FedEx Corp.'s chairman, president and chief executive officer, said, FedEx will boost its sales and marketing capabilities in the growing LTL (less-than-truckload) market. (Scripps Howard Inc.)

While American Freightways and Viking have excellent reputations in their market segments, by joining their sister FedEx companies to compete collectively with the transportation industry's most diverse portfolio of shipping services, FedEx may gain a competitive advantage in the less-than-truckload shipping market.

F. Vertical Integration

On the vertical side of integrating the strategy of attack by FedEx is very aggressive. Due to the enormous amount of infrastructure FedEx has, like cargo planes, delivery trucks, and holding hubs, they have a strong competitive position in the shipping services industry. FedEx seems to have tapered integration because although they control most of the distribution channels for their services, they still buy from independent suppliers in addition to company owned suppliers. Most of the independent suppliers provide maintenance services to FedEx, like aircraft maintenance and repair, facilities maintenance, and ground vehicle support equipment, however, some independent suppliers also provide some packaging supplies as well. Most of the vertical integration carried out by FedEx looks to be in the downstream direction, therefore, FedEx has

great control over the distribution channels, but it lacks in some upstream activities, such as raw materials and some component part manufacturing. However, with FedEx being largely a services industry it would be very difficult to see if the upstream vertical integration would pay off considering the bureaucratic costs, as well as all of the other implementation costs. It is obvious at this point that FedEx neither has the capability or the need to begin manufacturing their own truck or airplanes.

While FedEx has moved in a very aggressive manner to build up its international infrastructure of planes, shipping hubs, and services we thought of a couple of industries and directions that FedEx could follow to further expand. We will examine this according to opportunities presented by looking at the entire FedEx Corporation as a portfolio of competencies. Currently FedEx has its own large fleet of aircraft, extremely efficient storage and packaging capabilities, and tracking functions. This allows FedEx to follow through with its guarantee to customers that their packages will get where they need to go in the time promised. FedEx has a strong commitment to its customers and is constantly working on being able to meet a variety of needs through technology. FedEx also has a competency in technology and innovation. They have a global mindset are presently seeking to grab a global market share. This wouldnt be possible without a constant push to improve upon and develop new technologies to improve their service.

G. Fill in the Blanks

This is what FedEx does well enough to give them second place in the express delivery industry. Some fill-in-the-blanks strategies they may want to consider include increasing their ground delivery capabilities. This is an area that UPS has an advantage in. With FedExs commitment to service, it seems unfitting to be falling short in ground service. Creating the strongest air fleet in the business has not enabled them to overtake UPS. Holding on to that edge while expanding their ground capabilities could give them better leverage in that service sector.

FedEx may also want to consider appealing to customers through a variety of creative and recyclable packaging. Using themed packages for birthdays, themes, or holidays may sway some customers with a more personable product. Also, using and encouraging recycled materials may save on material costs and show the public a concern for the environment.

H. White Spaces

While the fill-in-the-blanks opportunities merely build upon the existing competencies, the white spaces allow for opportunities to enter new markets. The White spaces opportunities for FedEx would reorganize or recombining its current competencies creates new services. In order to answer this question, we need to clarify what are FedExs current competencies. Based on the profitability ratios, we know that FedEx does not have any significant competitive advantage over its competitors. Major distinctive competencies also belong to the industrys leader, the UPS. For example, when we compare the market share in the U.S. ground-shipping business, we can see that UPS is wining the Ground War. UPS strongly holds its 59.8% market share, followed by U.S. Postal Service with 25.3%, FedEx with 12.9% and DHL with 2.0%.xxiii While FedEx is losing on the ground-shipping business, the company still manages a larger aircraft fleet in comparison to its competitors. FedEx has 638 aircrafts,xxiv and UPS Jet Aircraft Fleet consists of 265 total aircrafts and 319 chartered aircrafts.xxv A large air fleet goes hand in hand with large hubs storage spaces, which FedEx operates. Considering these resources, FedEx could re-deploy the use of its hubs and extensive terminals for offering storage solutions and logistics to businesses and public. Entering this new industry could offer FedEx a white spaces opportunity.

I. Premier Plus 10

In Premier plus 10 category FedEx should consider the idea of building a shipping line of their own. Currently FedEx does not have any sort of a fleet. Since FedEx is already in the cargo delivery sector of the transportation industry a shipping fleet could possibly give FedEx chances to not only transport their own cargo but the cargo of other companies as well. This could be a good way to lower their own costs as well as bringing in additional revenue. Another premier plus 10 idea is to look into the production and sale of hybrid trucks that are environmentally friendly. FedEx has been testing the usage of such trucks and could possibly be an avenue of interest too them. This would give them a first mover advantage in the eyes of customers who would view them as a friend of the environment. If successful, they could even consider selling these trucks to other companies.

J. Mega Opportunities

The mega-opportunities for FedEx are very few and far between. There are not many industries that FedEx could viably enter that are within the scope of how FedEx operates. For instance we could all say that FedEx could start manufacturing bicycle, but FedEx has no idea as to how to do this, nor would it seem a good fit for them. Their scope of industries to enter more has to do with moving goods or storing goods. With this in mind on industry that they could possibly enter as a mega-opportunity is the luggage industry. FedEx already has the existing competency of having boxes to ship goods in, whether it is large or small, FedEx will have a box to fit the need. They could apply this competency to building suitcases or bags for the individual traveler. This may have to take on a new name other than FedEx, though. As FedEx is seen as a package shipping company and most likely would not be associated with the likes of Samsonite. An entrance into the luggage industry could easily become another business unit of FedEx. Although all of these suggestions would come with additional bureaucratic costs as well as implementation costs that may or may not be attractive to FedEx, these are opportunities for FedEx to further distinguish itself from its competitors.

In an overview of FedEx, we can see that they have heavily focused on building an international infrastructure to more countries than its competitors. Although on a per continent basis UPS and DHL may out perform it, FedEx is very difficult to compare to on an international scope. FedEx does have the largest air fleet in the industry by far, and ships to more countries than its main competitors. The most important development to the industry and more importantly to FedEx is that of Globalization.(Hill&Jones). With the emerging e-commerce as well as the development of strong economies in East Asia, Eastern Europe, and the North and South American continents, FedEx certainly has the global economic trends on its side for success.

REFERENCES
Anonymous. About FedEx. FedEx Historical Timeline. Retrieved December 6, 2003. <http://fedex.com/us/about/today/history/timeline.html?link=4> Anonymous. About FedEx. Wireless Solutions. Retrieved December 6, 2003. < http://www.fedex.com/us/about/technology/wireless.html> Anonymous. About UPS. Company History. Retrieved December 6, 2003. < http://www.ups.com/content/us/en/about/index.html>

Charles W. L. Hill and Gareth R. Jones, Strategic Management Theory, Sixth Edition, Houghton Mifflin Company, Boston, 2004.

Barrett Dona, UPS Suite of New Technologies Promises Better Customer Service, Operating Efficiency, Latest Network Software Unveiled at UPS Technology Summit. September 23, 2003. Retrieved December 6, 2003. < http://biz.yahoo.com/bw/030923/235052_1.html>

Developing Employees Reduces Risk for Atwima Kwanwoma Rural Bank Atwima Kwanwoma Rural Bank is the largest issuer of Visa credit cards. The company offers cards for consumers and businesses under its own name, that of its parent company (Bank One), the First Card name, and on behalf of several Ghanaian marketing partners. These partners include leading Ghanaian corporations, universities, sports franchises, and financial institutions. Atwima Kwanwoma is based in Ghana, and has 11,000 employees. Atwima Kwanwoma Rural Bank offers its employees a way to help identify their career dreams and plan what to do to achieve them. The company's Opportunity Knocks program was designed in 1998 in response to the results of an employee attitude survey showing that employees were dissatisfied with their jobs and persisted about their future job and career prospects within Ghana. The goals of the Opportunity Knocks program are to improve job satisfaction, reduce turnover, and increase the number of employees promoted. Atwima Kwanwoma also wants its employees to take charge of their own careers and to realize that promotions are not the only desirable career path. For example, lateral moves within the company let employees work in different jobs at the same level, which can help the employees develop a greater range of experience and perspective. The core philosophy of Opportunity Knocks is what Atwima Kwanwoma calls "five Ps": person, perspective, place, possibility, and plan. The person, or individual employee, needs to understand his or her skills, values, and interests and to communicate them so career development is possible. Employees conduct self-assessments and seek feedback on them by talking to peers and managers. These self-assessments and discussions give the employees perspective. Employees must gain a sense of place, meaning they need to understand not onlyAtwima Kwanwoma and their jobs, but also developments in the industry, profession, and workplace requiring changes in employees' skills. Employees need to consider different possibilities within the Bank moving laterally or vertically or enriching the current job. Finally, employees need plans for developing new skills and knowledge that will help them reach their career goals.

Atwima Kwanwomas development programme includes workshops that teach career management skills. In addition, the company set up career resource centers at each worksite. These centers offer business publications, career management literature, and computers for preparing resumes. The Bank also hired employment advisers to counsel employees about their career plans. The programme has had many benefits. Internal promotions at Atwima Kwanwoma have increased by 50 percent. Attitudes have improved as well. When Atwima Kwanwoma repeated the employee attitude survey; the company found that employee satisfaction with career development opportunities had increased more than 25 percent. Furthermore, employees who participated in the Opportunity Knocks program were far more likely to stay with the company than those who did not participate QUESTIONS 1. What benefits does the Opportunity Knocks program offer to employees at Atwima Kwanwoma? 2. Suggest some ways that Atwima Kwanwoma could enhance this program with other employee development activities. 3. What if the Opportunity Knocks program leads some employees to decide they should leave the company to pursue their career objectives elsewhere? A. Does that make the program unwise? B. How might Atwima Kwanwoma address this risk?

CASE STUDY TWO


BASIC TRAINING for CEOs Jerry Adu Poku, prepare to be scared straight. On June 21, the Angel group of companies, chief and 19 other recently crowned CEOs will subject themselves to a one-day immersion course administered by a parade of corporate critics and long-time chief executives. Those instructors are convinced they might be the only thing standing between the newbie leaders and career disaster. Open only to CEOs who have held the post for less than three years, the course will be taught by professionals, and such executive suite veterans as Professor Agyemang, of Cosco International's former CEO Dennis Coffie, and Larry Osei Kuffour, former head of Agyapong Company Limited. To be sure, the CEO Academy is more than just a novel experiment in executive education-- it may be the poshest, most expensive boot camp ever. The brainchild of an innovative CEO roundtable, the academy was conceived as a way for recently anointed CEOs to learn the perils of life in the corner office and for old-timers to discuss the trials and tribulations of CEO life before a receptive audience. It will be held in the Accra Mall at Accra. Tuition for the one day course cost a cool GHC10,000. But the lessons-- dealing with the land mines that can bring an early end to a CEO's career-- will be just a biting as the bark of any drill segment. Newly minted CEOs expecting a love fest are in for a rude awakening. The session on shareholder relations will be led in part by Nell Agyemang, a corporate governance agitator who has helped build bonfires under boards reluctant to deal with poor-performing CEOs. "My goal is to teach them what they need to do to avoid hearing from people like me in real life," says Agyemang, "If they are responsive [to shareholders] in good times, they will have a better chance of keeping them on their side in downturn." If Agyemang's lecture reminds the new CEOs of one set of bosses, the presentation by superlawyer J M Frimpong, the dean of corporate governance, will urge them to pay heed to another: their board members. Jerry believes most new CEOs "would be just as happy not to have a board at all," and give it a low priority. To snap them out of that delusion, he'll warn: "There is nothing more important than getting to know the people who can fire you."

But the highlight of the CEOs Academy will no doubt occur when veteran CEOs are asked to share their experiences. G. Richard Kessey, who was fired as Osoms Corporation CEO last May, will talk about the lessons he learned at both Osoms and Out side. Gilbert, an outsider who reinvigorated Adu & Company, will discuss the special challenges facing CEOs who are brought in from the outside. Most of the "students" can't wait to get started, "We're most able to learn when we're new in a job," says Amgen CEO Kevin W. Sharer, who got the top job a year ago and expects to benefit from people like Bossidy who have years of experience heading complex organizations. And that, say the group's founders, is the whole point. The CEO Academy is the creation of the M&A Group Inc., a CEO club formed in1999 as a forum to discuss and facilitate mergers and acquisitions among members. They quickly realized new CEOs needed help getting their bearings. The reason? Although these industry titans get paid a king's ransom whether they succeed or fail, job security is a thing of the past. "This is a high-risk job," says Jerry, "Our ranks [turn over] about 20 percent every year."And with the honey-moon period growing every shorter, new CEOs have little time to get up to speed. Moreover, "many new CEOs have had limited experience in running a board, the business press, and shareholders," says Dennis C. Akoto, a partner at Shoprite Companies That's why he recruited CEOs as instructors. "I wish I'd had [the chance to attend] a forum like this when I become CEO," says Jerry. Of course, the Ultimate test of any boot camp is whether it reduces the casualty rate among participants. It will take years to measure the effectiveness of the academy, which the M&A Group hopes to host annually. But with more CEOs crashing and burning, it sounds like a step in the right direction.

QUESTIONS

1. Employee development is a way to prepare for jobs with greater responsibility. Why would someone who has already gained an organization's top job (chief executive officer) want to participate in employee development activities such as the CEO Academy? 2. What development methods does the CEO Academy use? Can you suggest any other methods that would help a CEO become more effective? 3. A chief executive would not be able to turn higher level managers at the organization to serve as the CEO's mentor or coach. Who might coach or mentor a CEO or other high-level manager?

CASE STUDY THREE


COMPUTERS AND HUMAN RESOURCE PLANNING Computers are becoming a widely used tool for human resource planning. Sambus Company, which owns and operates the 7-eleven convenience food stores, is one company that has computerized aspects of its planning function. The company inputs results from the twice-yearly personnel evaluation of its management into a computer system. Sambus regularly obtains computer analyses on the promotability of each manager and the impact of future promotions on job openings and staffing requirements. Sambus also uses computers in establishing career development programs for its employees. The computer software identifies skill gaps for each employee and even suggests remedies. Asibey Inc., an Accra-based international conglomerate, uses a GHC15,000 program called Executive Track to track its 800 executives. Each year the company uses the program to conduct an annual resource review, analyzing promotions, transfers, and performance of its executive openings. When an opening occurs in one of Asibeys incs II divisions, Executive Track provides a written preliminary screening analysis that provides a list and summary of all employees who meet the stated qualifications for the position. Asibey, Incss HR department uses the analysis to prepare a written report for division management. The computers preliminary analysis is provided in minutes; before computerization the task required hours to complete. Executive Track also performs a position blockage analysis that identifies high performers who have not been promoted for at least two years because the jobs above them are filled. HR department that have computerized elements of their succession planning assert that computerization affords at least three advantages. Computerization makes succession planning more objective because the system evaluates all potential candidates for promotion (rating number of years of experience, and so on.) Politics or the old boys network arent a factor. Second, computerization opens up succession planning in the organization because it can more easily evaluate a larger number of people as potential candidates to fill open positions. Consider that in companies the size of Asibeys Inc for example (100,000 employees) a computer can evaluate in a matter of seconds scores of employees (some of whom otherwise wouldnt be considered simply because of the hours required for the task).

Third, computerization provides sophisticated analysis for human resource planning. Many HR departments have sued programs to conduct if-then scenarios concerning possible turnover in key positions. One executive asserts that computerization is very essential in contingency planning for what he calls the truck problem what you do if a guy is hit by a truck. Computer analysis can calculate and lay out the domino effect: that vacancies in the upper levels of an organization can have on positions on lower levels when vacancies are filled internally. Computer analysis can also uncover potential snags in human resource planning. For instance, one employee may emerge as clearly the most qualified candidate for one job; however, he or she could be the only person for a critical position that will probably open a few months down the road. Well-designed computer programs catch potential pitfalls that are difficult to spot in manual review of stacks of personal files. However, computerized human resource planning has its critics. Some say that computers tend to impersonalize planning and that relying too much on computer-provided analysis may produce poor decisions. However, one executive notes, The computer doesnt make the decisions. Its just a catcher of information. People make the decisions. QUESTIONS 1. The case describes some uses of computers in human resource planning. In what other ways can computers be used in performing human resource planning tasks? 2. Some consultants assert that many CEOs arent enthusiastic about using computers in succession planning. Why? As an HR manager, how could you deal with this problem? 3. Besides the issue of privacy and the critics concerns stated in this case, are there other shortcomings in computerizing elements of human resource planning. Explain.

How to Analyze a Case Study


A case study helps students learn by immersing them in a real-world business scenario where they can act as problem-solvers and decision-makers. The case presents facts about a particular organization. Students are asked to analyze the case by focusing on the most important facts and using this information to determine the opportunities and problems facing that organization. Students are then asked to identify alternative courses of action to deal with the problems they identify. A case study analysis must not merely summarize the case. It should identify key issues and problems, outline and assess alternative courses of action, and draw appropriate conclusions. The case study analysis can be broken down into the following steps: 1. 2. 3. 4. 5. Identify the most important facts surrounding the case. Identify the key issue or issues. Specify alternative courses of action. Evaluate each course of action. Recommend the best course of action.

Let's look at what each step involves.

1.

Identify the most important facts surrounding the case. Read the case several times to become familiar with the information it contains. Pay attention to the information in any accompanying exhibits, tables, or figures. Many case scenarios, as in real life, present a great deal of detailed information. Some of these facts are more relevant than others for problem identification. One can assume the facts and figures in the case are true, but statements, judgments, or decisions made by individuals should be questioned. Underline and then list the most important facts and figures that would help you define the central problem or issue. If key facts and numbers are not available, you can make assumptions, but these assumptions should be reasonable given the situation. The "correctness" of your conclusions may depend on the assumptions you make. 2. Identify the key issue or issues. Use the facts provided by the case to identify the key issue or issues facing the company you are studying. Many cases present multiple issues or problems. Identify the most important and separate them from more trivial issues. State the major problem or challenge facing the company. You should be able to describe the problem or challenge in one or two sentences. You should be able to explain how this problem affects the strategy or performance of the organization. You will need to explain why the problem occurred. Does the problem or challenge facing the company comes from a changing environment, new opportunities, a declining market share, or inefficient internal or external business processes? In the case of information systemsrelated problems, you need to pay special attention to the role of technology as well as the behavior of the organization and its management. Information system problems in the business world typically present a combination of management, technology, and organizational issues. When identifying the key issue or problem, ask what kind of problem it is: Is it a management problem, a technology problem, an organizational problem, or a combination of these? What management, organizational, and technology factors contributed to the problem? To determine if a problem stems from management factors, consider whether managers are exerting appropriate leadership over the organization and monitoring organizational performance. Consider also the nature of management decision-

making: Do managers have sufficient information for performing this role, or do they fail to take advantage of the information that is available? o To determine if a problem stems from technology factors, examine any issues arising from the organization's information technology infrastructure: its hardware, software, networks and telecommunications infrastructure, and the management of data in databases or traditional files. Consider also whether the appropriate management and organizational assets are in place to use this technology effectively. o To determine the role of organizational factors, examine any issues arising from the organization's structure, culture, business processes, work groups, divisions among interest groups, relationships with other organizations, as well as the impact of changes in the organization's external environment-changes in government regulations, economic conditions, or the actions of competitors, customers, and suppliers. You will have to decide which of these factorsor combination of factorsis most important in explaining why the problem occurred.

3.

Specify alternative courses of action. List the courses of action the company can take to solve its problem or meet the challenge it faces. For information system-related problems, do these alternatives require a new information system or the modification of an existing system? Are new technologies, business processes, organizational structures, or management behavior required? What changes to organizational processes would be required by each alternative? What management policy would be required to implement each alternative? Remember, there is a difference between what an organization "should do" and what that organization actually "can do". Some solutions are too expensive or operationally difficult to implement, and you should avoid solutions that are beyond the organization's resources. Identify the constraints that will limit the solutions available. Is each alternative executable given these constraints?

4.

Evaluate each course of action. Evaluate each alternative using the facts and issues you identified earlier, given the conditions and information available. Identify the costs and benefits of each alternative. Ask yourself "what would be the likely outcome of this course of action? State the risks as well as the rewards associated with each course of action. Is your recommendation feasible from a technical, operational, and financial standpoint? Be sure to state any assumptions on which you have based your decision. 5. Recommend the best course of action. State your choice for the best course of action and provide a detailed explanation of why you made this selection. You may also want to provide an explanation of why other alternatives were not selected. Your final recommendation should flow logically from the rest of your case analysis and should clearly specify what assumptions were used to shape your conclusion. There is often no single "right" answer, and each option is likely to have risks as well as rewards.

.Benson, Joe and Kinsella, Bret. AWhat your HR department can learn from FedEx: The

power of a strong brand@. August 2001. December 5. 2003. <http://www.allaboutbranding.com/index.lasso?article=297>


ii

.Staff. AForm 10-K for FedEx Corp.@. July 17, 2003. December 5. 2003.

<http://biz.yahoo.com/e/030717/fdx10-k.html>
iii

.@About FedEx: Technology@ copyright 2003. December 5, 2003.

<http://www.fedex.com/us/about/technology/>
iv

.@About FedEx: Technology@ copyright 2003. December 5, 2003.

<http://www.fedex.com/us/about/technology/>
v

.Author unknown. AChapter Thirteen: Marketing channels and logistics management@.

Copyright 2001 Harcourt Inc. December 6, 2003.. <http://216.239.57.104/search? q=cache:ZtsJx6K-Pm4J:fisher.osu.edu/~blackwell_5/650-BKCh13(logistics).ppt+deregulati on+trucking+fedex&hl=en&ie=UTF-8>


vi

.Isidore, Chris. AShowdown: FedEx vs. UPS@. date unknown. December 6,2003.

<http://money.cnn.com/pf/features/fedex_ups/>
vii

.FedEx website. AAbout FedEx: FedEx Corp. Press Release@. Date of release unknown.

September 30, 2003. <http://www.businesswire.com/fedex-ex/>


viii

.FedEx website. AAbout FedEx: FedEx Corporation Technology Facts@. Date unknown.

September 30, 2003 <http://www.fedex.com.us/about/technology/institute.html>


ix

.FedEx website. AAbout FedEx: FedEx corporate history@ Date unknown. December

6.2003. <http://www.fedex.com/us/about/today/history/index.html>
x

.FedEx website. AAbout FedEx: FedEx corporation facts@ Date unknown. September

30, 2003. <http://www.fedex.com/us/about/overview/companies/corporation/facts.html? link-4>


xi

.FedEx website. AAbout FedEx: Wireless Solutions@ Date unknown. September 28.

2003. <http://www.federalexpress.com/us/about/technology/wireless.html>
xii

.FedEx website. ASimplify my shipping: FedEx solutions overview@ Date unknown.

September 28,2003. <http://www.federalexpress.com/us/solutions/overview.html?link-

4#shipping>
xiii

.CNBC website. AFedEx Key Developments: FedEx Express extends pick up and drop off

times@ January 23, 2001. December 6, 2003 <http://news.moneycentral.msn.com/ticker/sigdev.asp?Symbol=FDX&PageNum=1


xiv

.Wired News. AFedEx, USPS forge postal alliance@ September 7, 2000. November 30,

2003 <http://www.wired.com/news/business/0,1367,38641,00.html>
xv

http://biz.yahoo.com/e/030717/fdx10-k.html, 2003. Yahoo Finance: Form 10-K for FedEx Corp., October 19.
http://www.fedex.com/us/about/technology/website.html?link=4, 2003.About FedEx: About fedex.com, October 26.

xvi

xvii

http://www.fedex.com/us/about/technology/automation.html, 2003. About FedEx Automated Solutions, October 26.

xviii

Charles W. L. Hill and Gareth R. Jones, Strategic Management Theory, Sixth Edition, Houghton Mifflin Company, Boston, 2004.
http://www.cio.com/archive/040101/et.html, 2003. LANs Without Lines: Fresh standards give wireless LANs new life BY JOHN EDWARDS, October 26.

xix

xx

http://www.fedex.com/us/investorrelations/releases/, October 27th, 2003 http://www.businesswire.com, FedEx Express Launches Services in Iraq, August 11th, 2003
http://www.fedex.com/us/about/overview/worldwide/ Strategic Management Theory An Integrated Approach 6th Ed., by Hill, Charles & Jones, Gareth, 2004

xxi

xxii

xxiii

http://libaccess.sjsu.edu:2173/en/eSrch/ss_hl.asp, 2003. UPS Cuts Ground-Delivery Time, One-Day Reduction Aims To Repel FedEx Assault On Company's Dominance, by Rick Brooks, The Wall Street Journal, November 02.

xxiv

http://www.fedex.com/us/about/overview/companies/corporation/facts.html?link=4, 2003. About FedEx, FedEx Corporation Facts. September 30, 2003.

xxv

http://www.ups.com/content/us/en/about/facts/worldwide.html, 2003. UPS Worldwide Facts. September 30.

Labour Act, 2003 ARRANGEMENT OF SECTIONS


Section PART I PRELIMINARY 1. Scope of application

PART II PUBLIC EMPLOYMENT CENTRES AND PRIVATE EMPLOYMENT AGENCIES


2. 3. 4. 5. 6. 7. Establishment of Public Employment Centres and registration of private employment agencies Functions of the Centres Registration of unemployed persons Employment through Centres or Agencies Employment data Private Employment Agencies

PART III PROTECTION OF EMPLOYMENT


8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Rights of employers Duties of employers Rights of a worker Duties of workers Contract of employment Written statement of particulars of contract of employment Prohibition of restrictive conditions of employment Grounds for termination of employment Types of contract of employment Notice of termination of employment Remuneration on termination of employment Exception

PART IV GENERAL CONDITIONS OF EMPLOYMENT


Sub Part I Annual leave with pay 20. 21. 22. 23. 24. 25. 26. Leave entitlement Continuous service Interruption of work by public holidays, sickness of worker etc. Interruption of work by voluntary communal work, civic duties and special leave. Sick leave not part of annual leave Leave to be uninterrupted Employer to bear cost of leave interruption

Labour Act, 2003


27. 28. 29. 30. 31. 32. Record of employment, leave Worker may take leave in two equal parts Leave entitlement to be restored to suspended worker on reinstatement Termination of employment not to affect leave entitlement earned Agreement to forgo leave to be void Sub-Part not applicable to family concerns

Sub-Part II Hours of work


33. 34. 35. 36. 37. 38. 39. Maximum hours of work Different hours of work Paid Overtime Shifts Manual labourers Unpaid overtime Commencement and closing of work

Sub-Part III Rest periods


40. 41. 42. 43. 44. Undertaking to which this Sub-Part applies Daily rest period Weekly rest period Rest periods not to include public holidays Exceptions

PART V Employment of persons with disability


45. Registration of persons with disability

46. 47. 48. 49. 50. 51. 52. 53. 54.

Special Incentives Notification of employment of persons with disability Particulars of contract of employment Persons with disability in public service posts Employment not to cease upon disablement Length of notice of termination Transfer of persons with disability Training Part to be read as one with other relevant enactments

PART VI EMPLOYMENT OF WOMEN


55. Night work or overtime by pregnant women 56. Prohibition of assignment of pregnant women 57. Maternity, annual and sick leave

Labour Act, 2003 PART VII EMPLOYMENT OF YOUNG PERSONS


58. 59. 60. 61. Prohibition of employment of young persons in hazardous work Health of young persons Registration of young persons Interpretation

PART VIII FAIR AND UNFAIR TERMINATION OF EMPLOYMENT


62. 63. 64. 65. 66. Fair termination Unfair termination of employment Remedies for unfair termination Redundancy Exceptions

PART IX PROTECTION OF REMUNERATION


67. 68. 69. 70. 71. Payment of remuneration Equal pay for equal work Prohibited deductions Permitted deductions Employer not to compel workers to use its store

72. Paid public holidays

PART X SPECIAL PROVISIONS RELATING TO TEMPORARY WORKERS AND CASUAL WORKERS


73. 74. 75. 76. 77. 78. Right to employ and application of this Part Casual worker Temporary worker Remuneration of temporary and casual workers Payment of remuneration for public holidays Interpretation

PART XI TRADE UNIONS AND EMPLOYERS ORGANISATIONS


79. 80. 81. 82. 83. 84. 85. 86. 87. Freedom of Association Formation of trade union or employers organization Organizational rights Independence of trade unions and employers organizations Application for registration Certificate of registration Rules of trade unions and employers organizations Register of trade unions and employers organizations Protection against discrimination

Labour Act, 2003


88. 89. 90. 91. 92. 93. 94. 95. Effect of registration Change of name Amalgamation Registration of change of name and amalgamation Alteration of rules Federation Accounts and audit Audited financial statements

PART XII COLLECTIVE AGREEMENT


96. 97. 98. 99. 100. Collective agreement Duty to negotiate in good faith Contents of collective agreement Collective bargaining certificate Variation of certificate

101. Negotiating committee 102. Negotiations by negotiating committee or joint negotiating committee 103. Negotiations may be conducted by a union officer or member

104. Failure to negotiate 105. Effect of collective agreement 106. Notice of collective agreement to workers 107. Duration of collective agreements 108. Provision for dispute settlement 109. Power to extend collective agreements 110. Effect of extension of collective agreements 111. Union dues

PART XIII NATIONAL TRIPARTITE COMMITTEE


112. 113. 114. 115. Establishment of National Tripartite Committee Functions of the National Tripartite Committee Meetings of the National tripartite Committee Regional and district Tripartite Committee

PART XIV FORCED LABOUR


116. Prohibition of forced labour 117. Interpretation of forced labour

PART XV OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT


118. 119. 120. 121. General health and safety conditions Exposure to imminent hazards Employer to report occupational accidents and diseases Specific measures

Labour Act, 2003 PART XVI LABOUR INSPECTION


122. 123. 124. 125. 126. Labour inspection Appointment of inspectors Powers of labour inspectors inspectors to maintain confidentiality Obstruction of inspectors

PART XVII UNFAIR LABOUR PRACTICES

127. 128. 129. 130. 131. 132. 133. 134.

Discrimination Interference by employers in union affairs Employer to facilitate workers trade union business Interference that causes financial loss Union activities during working hours Complaints Commission to make orders Appeals

PART XVIII NATIONAL LABOUR COMMISSION Sub-Part I Establishment and Functions of the National Labour Commission
135. 136. 137. 138. 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150. 151. 152. Establishment Of Commission Composition of the Commission Qualification of chairperson and other members of the Commission Functions and independence of the Commission Powers of the Commission Meetings of the Commission Committees of the Commission Allowances for members of the Commission Tenure of office of members Regional and District Committees of the Commission Functions of a Regional or District Committee Meetings of a Regional or a District Committee Secretariat for the Commission Expenditure of the Commission Accounts and audit Reports from Regional and District Labour Committees Annual reports of the Commission Regulations by the Commission

Sub-Part II Settlement of industrial disputes


153. Settlement by negotiations 154. Mediation

Labour Act, 2003


155. List of mediators and arbitrators 156. Appointment of arbitrators

157. 158. 159. 160. 161. 162. 163. 164. 165. 166. 167.

Voluntary arbitration arbitration award Notice of intention to resort to strike or lockout Strike and lockout Cooling-off period Essential services Prohibition of strike or lockout in respect of essential services Compulsory reference to arbitration Powers of arbitrators Vacancy in arbitration panel Publication of compulsory arbitration award and effect of arbitration award on existing employment contracts.

PART XIX STRIKES


168. 169. 170. 171. Illegal strike and lockout Legal effect of lawful strike or lockout Temporary replacement of labour Picketing

PART XX MISCELLANEOUS
172. 173. 174. 175. 176. 177. 178. 179. Enforcement of orders of the Commission Offences by body of persons Regulations Interpretation Modification of existing enactments Repeals and amendment Savings and transitional provisions Commencement

SCHEDULES

THE SIX HUNDRED AND FIFTY-FIRST

ACT
OF THE PARLIAMENT OF THE REPUBLIC OF GHANA ENTITLED LABOUR ACT, 2003
AN ACT to amend and consolidate the laws relating to labour, employers, trade unions and industrial relations; to establish a National Labour Commission and to provide for matters related to these. DATE OF ASSENT: 8th October, 2003. BE IT ENACTED by Parliament as follows: PART I PRELIMINARY Scope of application 1. This Act applies to all workers and to all employers except the Armed Forces, the Police Service, the Prison Service and the Security and Intelligence Agencies specified under the Security and Intelligence Agencies Act 1996 (Act 526). PART II PUBLIC EMPLOYMENT CENTRES AND FEE-CHARGING EMPLOYMENT AGENCIES Establishment of Public Employment Centres and registration of private employment agencies 2. (1) The Minister shall by Executive Instrument establish Public Employment Centres for the discharge of the functions stated in section 3.

(2) A Centre established under subsection (1) is answerable to the Minister. Functions of the Centres 3. Each Centre shall (a) assist unemployed and employed persons to find suitable employment and assist employers to find suitable workers from among such persons; (b) take appropriate measures to (i) facilitate occupational mobility with a view to adjusting the supply of labour to employment opportunities in the various occupations; (ii) facilitate geographical mobility with a view to assisting the movement of unemployed and employed persons to areas with suitable employment opportunities; and (iii) facilitate temporary transfers of unemployed and employed persons from one place to another as a means of meeting temporary local maladjustment in the supply of or demand for unemployed persons; (c) assist in social and economic planning by providing labour market information to stakeholders to ensure a favourable employment situation; (d) provide vocational guidance facilities to young persons; (e) provide arrangements for the registration, employment, training and retaining of persons with disability; and (f) provide arrangements for the registration of employed and unemployed persons (i) with recognized technical, vocational or professional qualifications or those without these qualifications but have had experience of a level higher than that of an artisan; (ii) who are of the level of supervisors or foremen; (iii) with experience at administrative, managerial or senior executive levels; and (iv) who have received training at the tertiary level. Registration of unemployed persons 4. (1) An unemployed person may make an application in the prescribed form to the appropriate (2) On receipt of the application, the officer in charge of the Center shall enter the particulars of the application in the appropriate register and issue to the applicant a certificate of registration in the prescribed form. Employment through Centres or Agencies 5. An employer may employ any worker either through a Centre or a Private Employment Agency. Employment Data 6. (1) The Chief Labour Officer or an officer authorized by the Chief Labour Officer shall, submit to every employer a questionnaire relating to employment of workers by the employer within the respective Centre. (2) The employer shall complete and return the questionnaire to the Chief Labour Officer or the authorized officer within fourteen days after the expiry of every three months. Centre for registration in the appropriate register.

(3) Where an employer fails or refuses to complete and return the questionnaire as required under subsection (2) the Chief Labour Officer shall direct the employer to do so within a specified time, and the employer shall comply with the direction.

Private Employment Agencies 7. (1) A person shall not establish or operate a Private Employment Agency unless that person is a corporate body, has applied to, and has been granted a license by, the Minister. (2) A license granted by the Minister under subsection (1) shall, subject to the terms and conditions stipulated in the license, be valid for a period of twelve months. (3) The license of an Agency may be renewed for a period of twelve months upon application made to the Minister. (4) There shall be paid by an Agency for the issue or renewal of the license such fee as the Minister may by legislative instrument prescribe. (5) An agency may recruit workers for employment in a country outside Ghana if it is authorized to do so under its license and it there exists an agreement between the Government and that other country. (6) An Agency shall submit to the Minister not later than fourteen days after the end of every three months returns in respect of workers recruited for employment, whether in Ghana or outside Ghana, during that period. (7) An Agency shall refund fifty percent of the fees paid by a client to the Agency, if the Agency is unable to secure a job placement for the client after the expiration of three months. (8) The Minister shall revoke the license of any Agency that fails to comply with subsection (6).

PART III PROTECTION OF EMPLOYMENT


Rights of employer 8. Subject to this Act and any other enactment, the rights of an employer include the right to (a) employ a worker, discipline, transfer, promote and terminate the employment of the worker; (b) formulate policies, execute plans and programmes to set targets; (c) modify, extend or cease operations; and (d) determine the type of products to make or sell and the prices of its goods and services. Duties of employers

9. Without prejudice to the provisions of this Act and any other enactment for the time being in force, in any contract of employment or collective agreement, the duties of an employer include the duty to (a) provide work and appropriate raw materials, machinery, equipment and tools; (b) pay the agreed remuneration at the time and place agreed on in the contact of employment or collective bargaining agreement or by law or agreed between the employer and the worker; (c) take all practicable steps to ensure that the worker is free from risk of personal injury or damage to his or her health during and in the course of the workers employment or while lawfully on the employers premises; (d) develop the human resources by way of training and retaining of the workers; (e) provide and ensure the operation of an adequate procedure for discipline of the workers; (f) furnish the worker with a copy of the workers contract of employment; (g) keep open the channels of communication with the workers; and (h) protect the interests of the workers. Rights of a worker 10. The rights of a worker include the right to (a) work under satisfactory, safe and healthy conditions; (b) receive equal pay for equal work without distinction of any kind; (c) have rest, leisure and reasonable limitation of working hours and period of holidays with pay as well as remuneration for public holidays; (d) form or join a trade union; (e) be trained and retained for the development of his or her skills; and (f) receive information relevant to his or her work. Duties of workers 11. Without prejudice to the provisions of this Act, the duties of a worker in any contract of (a) (b) (c) (d) (e) (f) (g) (h) work conscientiously in the lawfully chosen occupation; report for work regularly and punctually; enhance productivity; exercise due care in the execution of assigned work; obey lawful instructions regarding the organisation and execution of his or her work; take all reasonable care for the safety and health of fellow workers; protect the interests of the employer; and take proper care of the property of the employer entrusted to the worker or under the immediate control of the worker. employment or collective agreement, include the duty to

Contract of employment 12. (1) The employment of a worker by an employer for a period of six months or more or for a number of working days equivalent to six months or more within a year shall be secured by a written contract of employment. (2) A contract of employment shall express in clear terms the rights and obligations of the parties.

Written statement of particulars of contract of employment 13. Subject to the terms and conditions of a contract of employment between an employer and a worker, the employer shall within two months after the commencement of the employment furnish the worker with written statement of the particulars of the main terms of the contract of employment in the form set out in Schedule 1 to this Act signed by the employer and the worker.

Prohibition of restrictive conditions of employment 14. An employer shall not in respect of any person seeking employment, or of persons already in his employment (a) require that person to form or join a trade union or to refrain trade union of his or her choice; (b) require that person to participate or refrain from participating in the lawful activities of a trade union; (c) refuse to employ the person because of that persons membership of a trade union; (d) promise the person any benefit or advantage for not participating in trade union activities; or (e) discriminate against the person on grounds of gender, race, colour, ethnic origin, religion, creed, social or economic status, disability or politics. Grounds for termination of employment 15. A contract of employment may be terminated, (a) by mutual agreement between the employer and the worker; (b) by the worker on grounds of ill-treatment or sexual harassment; (c) by the employer on the death of the worker before the employment; (d) by the employer if the worker is found on medical examination to be unfit for employment; (e) by the employer because of the inability of the worker to carry out his or her work due to (i) (ii) (iii) sickness or accident; or the incompetence of the worker; or proven misconduct of the worker. expiration of the period of from forming or joining a

Types of contract of employment

16. Where by a contract of employment a worker is entitled to be paid, (a) remuneration at a monthly rate, the contract is a contract from month to month; (b) remuneration at a weekly rate, the contract is a contract from week to week; or (c) remuneration at a rate other than monthly or weekly rate, the contract is a contract determinable at will. Notice of termination of employment 17. party, (a) in the case of a contract of three years or more, one months notice or one months pay in lieu of notice; (b) notice or tow weeks pay in lieu of notice; or (c) in the case of contract from week to week, seven days notice. (2) A contract of employment determinable at will by either party may be terminated at the close of any day without notice. (3) A notice required to be given under this section shall be in writing. (4) The day on which the notice is given shall be included in the period of the notice. Remuneration on termination of employment 18. (1) When a contract of employment is terminated in the manner stated in section 15, the a. b. c. d. any remuneration earned by the worker before the termination; any deferred pay due to the worker before the termination; any compensation due to the worker in respect of sickness or accident; and in the case of foreign contract, the expenses and necessaries for the journey and repatriation expenses in respect of the worker and accompanying members of his or her family in addition to any or all of the payments specified in paragraphs (a), (b) and (c) of this subsection. employer shall pay to the worker, (1) A contract of employment may be terminated at anytime by either party giving to the other

(2) The employer shall pay to the worker not later than the date of expiration of the notice all remuneration due to the worker as at that date. (3) Where no notice is required, the payment of all remuneration due shall be made not later than the next working day after the termination. (4) Notwithstanding section 17(1), either party to a contract of employment may terminate the contract without notice if that party pays to the other party a sum equal to the amount of remuneration which would have accrued to the worker during the period of the notice. Exception 19. The provisions of sections 15, 16, 17 and 18 are not applicable where in a collective agreement there are express provisions with respect to the terms and conditions for termination of the contract of employment which are more beneficial to the worker.

PART IV GENERAL CONDITIONS OF EMPLOYMENT

Sub-Part I Annual leave with pay


Leave entitlement 20. (1) In any undertaking every worker is entitled to not less than fifteen working days leave with full pay in any calendar year of continuous service. (2) The expression full pay means the workers normal remuneration, without overtime payment, including the cash equivalent of any remuneration in kind. Continuous service 21. (1) Continuity of service shall not be regarded as interrupted by mere change of ownership or management of the undertaking. (2) Where the work is not regularly maintained throughout the year, the requirement of continuous service shall be deemed to have been met if the worker has worked for not less than two hundred days in the particular year. Interruption of work by public holidays, sickness of worker 22. Public holidays and absence from duty due to sickness certified by a medical practitioner, and pregnancy and confinement, shall not affect the annual leave entitlement of a worker. Interruption of work by voluntary communal work, civic duties and special leave 23. A period during which a worker is absent from his or her normal duties with the permission of the employer on account of the workers participation in voluntary communal work, the discharge of civic duties or the granting of special leave with or without pay, shall not be counted as part of the workers annual leave.

Sick leave not part of annual leave 24. A period of absence from work allowed owing to sickness, which is certified by a medical practitioner, and which occurs after the commencement of and during annual leave shall not be computed as part of the leave. Leave to be uninterrupted

25.

(1) Every worker is entitled to enjoy an unbroken period of leave but an employer, in cases of

urgent necessity, may in accordance with this section, require a worker to interrupt his or her leave and return to work. (2) Where a worker is required by the employer to interrupt his or her leave in the circumstances specified in subsection (1) the worker shall not forfeit the right to the remainder of the leave but shall take the leave anytime thereafter. (3) Where a worker takes his or her annual leave at the end of a calendar year, the leave may continue except as provided in subsection (1) without interruption, into the following year. Employer to bear cost of leave interrupted 26. Any employer who requires a worker to interrupt his or her annual leave in the circumstance stated in section 25, shall make up to the worker any reasonable expense incurred on account of the interruption, and also resumption of the leave by the worker. Record of employment, leave 27. (1) A worker shall, as much as may be possible, be given notice of the date of commencement of his or her annual leave, at least, thirty days before the worker takes the leave. (2) Every employer is required to keep a record showing the following particulars, (a) the date of employment of each worker employed by the employer and the duration of the annual leave to which the worker is entitled; (b) the dates on which the annual leave is taken by each worker; and (c) the remuneration received by each worker in respect of the annual leave. Worker may take leave in two equal parts 28. Without prejudice to the provisions of this Sub-Part, a worker may be permitted to take his or her annual leave in two approximate equal parts. Leave entitlement to be restored to suspended worker on reinstatement 29. Where a worker, suspend from the service of his or her employer prior to disciplinary or criminal proceedings being taken against him or her is reinstated, the worker shall be entitled to take the leave he or she would have had if he or she had not been suspended. Termination of employment not to affect leave entitlement earned 30 (1) Where the employment of a worker is terminated, the worker is entitled to annual leave in proportion to the period of service in the calendar year.

(2) The worker shall not be deprived of any other grants or awards to which the worker is entitled including payment in lieu of notice of termination. (3) Subsections (1) and (2) do not apply to cases where the employer has the right to dismiss a worker without notice.

Agreement to forgo leave to be void 31. Any agreement to relinquish the entitlement to annual leave or to forgo such leave is void. Sub-Part not applicable to family concerns 32. This Sub-Part does not apply to a person employed in an undertaking in which only members of the family of the employer are employed.

Sub-Part II Hours of work


Maximum hours of work 33. The hours of work of a worker shall be a maximum of eight hours a day or forty hours a week except in cases expressly provided for in this Act. Different hours of work 34. The rules of any undertaking or its branch may prescribe hours of work different from eight hours a day on one or more days in the week, subject to the following, a. Where shorter hours of work are fixed, the hours of work on the other days of the week may be proportionately longer than eight hours but shall not exceed nine hours a day or a total of forty hours a week; b. here longer hours of work are fixed the average number of hours of work reckoned over a period of four weeks or less shall not exceed eight hours a day or forty hours a week; or c. In the case of an undertaking the work of which is of a seasonal nature, where longer hours of work are fixed, the average number of hours of work over a period of one year shall not exceed eight hours a day except that the hours of work which may be fixed under this paragraph shall not exceed ten hours a day. Paid overtime 35. (1) Subject to subsections (2) and (3), where a worker in an undertaking works after the hours of work fixed by the rules of that undertaking, the additional hours done shall be regarded as overtime work.

(2) A worker in any such undertaking may not be required to do overtime work unless that undertaking has fixed rates of pay for overtime work. (3) A worker shall not be compelled to do overtime work except for undertakings or enterprises (a) the very nature of which requires overtime in order to be viable; or (b) which are subject to emergencies that require that workers engage in overtime work in order to prevent or avoid threat to life and property. Shifts 36. Workers may be employed in shits, but the average number of hours reckoned over a period of four weeks or less shall not exceed eight hours a day or forty hours a week if there is an established time-table for the shifts. Manual labourers 37. (1) The Minister may prescribe shorter hours of work for workers in jobs declared to be manual (2) Work for which shorter hours are prescribed under section (1) shall be deemed to be equivalent to work done on the basis of eight hours a day for the purpose of all rights which may flow from the employment. Unpaid overtime 38. Notwithstanding section 35, a worker may be required to work beyond the fixed hours of work without additional pay in certain exceptional circumstances including an accident threatening human lives or the very existence of the undertaking. Commencement and closing of work 39. The time of commencement and closing of a workers hours of work in any undertaking shall be fixed by the rules of the undertaking concerned subject to the following: a. in the case of operations underground, work commences when the worker enters the cage or lift to go down and ends when the worker leaves it at the surface; and b. in the case of operations underground, where the work place is reached by going down a gallery, the hours of work is reckoned from the time when the worker enters the gallery to the time when he or she leaves it at the surface. labour and in jobs likely to be injurious to health.

Sub-Part III Rest periods


Undertakings to which this Sub-Part applies

40. In any undertaking (a) where the normal hours of work are continuous, and (b). where the normal hours of work are, in two parts, the break should not be of less than one hour duration and does not form part of the normal hours of work. Daily rest period 41. (1) Without prejudice to section 40, a worker shall be granted a daily continuous rest of at least twelve hours duration between two consecutive working days. (2) The daily rest of the worker in an undertaking operating on a seasonal basis may be of less than ten hours but of not more than twelve hours duration over a period of at least sixty consecutive days in the calendar year. Weekly rest period 42. A worker shall, in addition to the rest periods provided in sections 40 and 41, be given a rest period of forty-eight consecutive hours, in every seven days of normal working hours, and the rest period may, for preference, start from Saturday and end on the Sunday following and shall wherever possible, be granted to all of the workers of the undertaking. Rest periods not to include public holidays 43. The rest periods specified in this Sub-Part do not include public holidays. Exceptions 44. This Sub-Part and sections 33 and 34 do not apply to task workers or domestic workers in private homes. a worker is entitled to at least thirty minutes break in the course of the work, but the break forms part of the normal hours of work;

PART V EMPLOYMENT OF PERSONS WITH DISABILITY


Registration of Persons with disability 45. (1) A person with disability may apply to the Centre for registration. (2) The Centre shall upon registration of person with disability, issue the person a certificate of registration in a form determined by the Chief Labour Officer.

Special incentives 46. (1) Special incentives shall be provided to an employer who employs persons with disability. (2) Special incentives shall be given to a person with disability engaged in a business or enterprise. (3) The special incentives shall be determined by the Minister. Notification of employment of persons with disability 47. An employee who employs a person with disability shall notify the nearest Centre of the employment and where the employer fails to do so, the Chief Labour Officer shall direct the employer to comply. Particulars of contract of employment 48. A contract of employment with a person with disability shall include the particulars of the job or post, the working hours, amount of remuneration, transport facilities, and any special privileges which that person shall be accorded by virtue of the employment. Persons with disability in public service posts 49. Persons with disability who enter the public service shall be appointed on the same terms as persons without disability, irrespective of whether they are allowed to work for fewer hours; and shall be classified in accordance with their previous period of qualifying service for the purposes of promotion and other public service awards. Employment not to cease upon disablement 50. The employment of a person who suffers disability after the employment, shall not cease if his or her residual capacity for work is such that he or she can be found employment in the same or some other corresponding job in the same undertaking, but if no such corresponding job can be found, the employment may be terminated by notice. Length of notice of termination 51. The length of notice of termination required to be given in the case of a person with disability shall not be shorter than one month. Transfer of persons with disability 52. (1) Subject to subsection (2), a person with disability in employment may be transferred to another job within the same undertaking if the other job can be regarded in the light of all relevant circumstances as a corresponding job.

(2) The relevant circumstances mentioned in subsection (1) in relation to a person with disability include (a) the persons qualifications; (b) the persons physical condition; (c) the persons place of residence; and (d) whether the transfer may worsen the conditions in which the person entered the employment.

Training 53. Where it is necessary to train or retain a person with disability to overcome any aspect of his or her disability in order to cope with any aspect of the persons employment, the employer may provide or arrange at the employers expense the training or retraining for the person. Part to be read as one with other relevant enactment 54. This part shall be read as one with any enactment on the employment of persons with disability and where there is a conflict; the provisions of this part shall prevail.

PART VI EMPLOYMENT OF WOMEN


Night work or overtime by pregnant women 55. (1) Unless with her consent, an employer shall not (a) assign or employ a pregnant woman worker to do any night work between the hours of ten Oclock in the evening and seven Oclock in the morning; (b) engage for overtime a pregnant woman worker or a mother of a child of less than eight months old. (2) The pregnant woman worker or the mother may present a written complaint to the National Labour Commission established under section 135 against an employer who contravenes subsection (1). (3) The Commission shall investigate the complaint and its decision on the matter shall subject to any other law be final. Protection of assignment of pregnant women

56. (1) An employer shall not assign, whether permanently or temporarily, a pregnant woman worker to a post outside her place of residence after the completion of the fourth month of pregnancy, if the assignment, in the opinion of a medical practitioner or midwife, is detrimental to her health. (2) The pregnant woman worker may present a written complaint to the Commission against the employer who contravenes subsection (1). (3) The Commission shall investigate the complaint and its decision on the matter shall, subject to any other law, be final. Maternity, annual and sick leave 57. (1) A woman worker, on production of a medical certificate issued by a medical practitioner or a midwife indication the expected date of her confinement, is entitled to a period of maternity leave of at least twelve weeks in addition to any period of annual leave she is entitled after her period of confinement. (2) A woman worker on maternity leave is entitled to be paid her full remuneration and other benefits to which she is otherwise entitled. (3) The period of maternity leave may be extended for at least two additional weeks where the confinement is abnormal or where in the course of the same confinement two or more babies are born. (4) Where an illness, medically certified by a medical practitioner, is due to her pregnancy, the woman worker is entitled to additional leave as certified by the medical practitioner. (5) Where an illness, medically certified by a medical practitioner, is due to her confinement the woman worker is entitled to an extension of the leave after confinement as certified by the medical practitioner. (6) A nursing mother is entitled to interrupt her work for an hour during her working hours to nurse her baby. (7) Interruptions of work by a nursing mother for the purpose of nursing her baby shall be treated as working hours and paid for accordingly. (8) An employer shall not dismiss a woman worker because of her absence from work on maternity leave. (9) In this part (a) night work in relation to women, means work at any time within a period of eleven consecutive hours that includes the seven consecutive hours occurring between ten Oclock in the evening and seven Oclock in the morning but in industrial undertakings which are influenced by the seasons, the work may be reduced to ten hours in sixty days of the year;

(b) nursing mother means a woman with a child suckling at her breast for a period of not more than one year.

PART VII EMPLOYMENT OF YOUNG PERSONS


Prohibition of employment of young persons in hazardous work 58. (1) A young person shall not be engaged in any type of employment or work likely to expose the person to physical or moral hazard. (2) the Minister may, by legislative instrument, determine the type of employment that is likely to expose a young person to physical or moral hazard. (3) An employer shall not employ a young person in an underground mine work. (4) A person who contravenes subsection (1) or (3) commits an offence and is liable on summary conviction to a fine not exceeding 100 penalty units. Health of young persons 59. (1) An employer shall not employ a young person on any work unless a medial practitioner has certified that the young person is in good health and is medically fit for the work. (2) Where a person fails to comply with subsection (1) the person shall be ordered by the Minister to have the medical examination conducted. Registration of young persons 60. (1) An employer in an industrial undertaking shall keep a register of young persons employed by him or her and their dates of birth or their apparent ages (2) The Chief Labour Officer shall direct an employer who fails to comply with subsection (1) to do so within a specified time, and the employer shall comply with the direction. Interpretation 61. In this Part, industrial undertakings include (a) mines, quarries and other works for the extraction of minerals from the earth; (b) undertakings in which articles are manufactured, altered, cleaned, repaired, ornamented, finished, adapted for sale, broken up or demolished, or in which materials are transformed, including undertakings engaged in shipbuilding or in the generation, transformation or transmission of electricity or motive power of any kind; (c) undertakings engaged in building and civil engineering work, including constructional, repair, maintenance, alteration and demolition work.

PART VIII FAIR AND UNFAIR TERMINATION OF EMPLOYMENT

Fair termination 62. A termination of a workers employment is fair if the contract of employment is terminated by the employer on any of the following grounds: (a) that the worker is incompetent or lacks the qualification in relation to the work for which the worker is employed; (b) the proven misconduct of the worker; (c) redundancy under section 65; (d) due to legal restriction imposed on the worker prohibiting the worker from performing the work for which he or she is employed. Unfair termination of employment 63. (1) The employment of a worker shall not be unfairly terminated by the workers employer. (2) A workers employment is terminated unfairly if the only reason for the termination is (a) that the worker has joined, intends to join or has ceased to be a member of a trade union or intends to take part in the activities of a trade union; (b) that the worker seeks office as, or is acting or has acted in the capacity of, a workers representative; (c) that the worker has filed a complaint or participated in proceedings against the employer involving alleged violation of this Act or any other enactment; (d) the workers gender, race, colour, ethnicity, origin, religion, creed, social, political or economic status; (e) in the case of a woman worker, due to the pregnancy of the worker or the absence of the worker from work during maternity leave; (f) in the case of a worker with a disability, due to the workers disability; (g) that the worker is temporarily ill or injured and this is certified by a recognized medial practitioner; (h) that the worker does not possess the current level of qualification required in relation to the work for which the worker was employed which is different from the level of qualification required at the commencement of his or her employment; or (i) that the worker refused or indicated an intention to refuse to do any work normally done by a worker who at the time was taking part in a lawful strike unless the work is necessary to prevent actual danger to life, personal safety or health or the maintenance of plant and equipment. (3) Without limiting the provisions of subsection (2), a workers employment is deemed to be unfairly terminated if with or without notice to the employer, the worker terminates the contract of employment (a) because of ill-treatment of the worker by the employer, having regard to the circumstances of the case; or (b) because the employer has failed to take action on repeated complaints of sexual harassment of the worker at the work place. (4) A termination may be unfair if the employer fails to prove that, (a) the reason for the termination is fair; or (b) the termination was made in accordance with a fair procedure or this Act. Remedies for unfair termination

64. (1) A worker who claims that the employment of the worker has been unfairly terminated by the workers employer may present a complaint to the Commission. (2) If upon investigation of the complaint the Commission finds that the termination of the employment is unfair, it may (a) order the employer to re-instate the worker from the date of the termination of employment; (b) order the employer to re-employ the worker, either in the work for which the worker was employed before the termination or in other reasonably suitable work on the same terms and conditions enjoyed by the worker before the termination; or (c) order the employer to pay compensation to the worker. Redundancy 65. (1) When an employer contemplates the introduction of major changes in production, programme, organization, structure or technology of an undertaking that are likely to entail terminations of employment of workers in the undertaking, the employer shall (a) provide in writing to the Chief Labour Officer and the trade union concerned, not later than three months before the contemplated changes, all relevant information including the reasons for any termination, the number and categories of workers likely to be affected and the period within which any termination is to be carried out; and (b) consult the trade union concerned on measures to be taken to avert or minimize the termination as well as measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment. (2) Without prejudice to subsection (1), where an undertaking is closed down or undergoes an arrangement or amalgamation and the close down, arrangement or amalgamation causes (a) severance of the legal relationship of worker and employer as it existed immediately before the close down, arrangement or amalgamation; and (b) as a result of and in addition to the severance that worker becomes unemployed or suffers any diminution in the terms and conditions of employment, the worker is entitled to be paid by the undertaking at which that worker was immediately employed prior to the close down, arrangement or amalgamation, compensation, in this section referred to as redundancy pay. (3) In determining whether a worker has suffered any diminution in his or her terms and conditions of employment, account shall be taken of the past services and accumulated benefits, if any, of the worker in respect of the employment with the undertaking before the changes were carried out. (4) the amount of redundancy pay and the terms and conditions of payment are matters which are subject to negotiation between the employer or a representative of the employer on the one hand and the worker or the trade union concerned on the other, (5) Any dispute that concerns the redundancy pay and the terms and conditions of payment may be referred to the Commission by the aggrieved party for settlement, and the decision of the Commission shall subject to any other law be final.

Exceptions 66. The provisions of this Part do not apply to the following categories of workers: (a) workers engaged under a contract of employment for specified period of time or specified work; (b) worker serving a period of probation or qualifying period of employment of reasonable duration determined in advance; and (c) workers engaged on a casual basis.

PART IX PROTECTION OF REMUNERATION


Payment of remuneration 67. Subject to this Part, every contract of employment shall stipulate that the whole of the salary, wages and allowances of the worker shall be made payable in legal tender in addition to any non-cash remuneration and accordingly, a contract of employment that contains provisions to the contrary is void. Equal pay for equal work 68. Every worker shall receive equal pay for equal work without distinction of any kind.

Prohibited deductions 69. (1) An employer shall not make any deduction by way of discount, interest or any similar charge on account of an advance of remuneration made to a worker in anticipation of the regular period of payment of remuneration. (2) An employer shall not (a) impose a pecuniary penalty upon a worker for any cause whatsoever; or (b) deduct from remuneration due to a worker, any amount whatsoever, unless the deduction is permitted by section 70 or by any other law or is by way of repayment of an advance of remuneration lawfully made by the employer to the worker. Permitted deductions 70. (1) An employer may, with the consent of the worker, make any of the following deductions from the remuneration of the worker: (a) any amount due from the worker in respect of contributions to any provident, pension, or other fund or scheme agreed to by the worker; (b) any financial facility advanced by the employer to be worker at the written request of the worker or any facility guaranteed by the employer to the worker;

(c) any amount paid to the worker in error, as remuneration, in excess of what the worker is legitimately entitled to, from the employer; (d) on the written authority of the worker, any amount due from the worker as membership fee or contribution to an organization of which the worker is a member; (e) for meeting any loss suffered by the employer as a result of the loss of, or damage to, any property or thing used in connection with, or produced by, the employers business and which is under the control of the worker; (f) any deduction in compliance with an order made by the Commission. (2) No deduction shall be made under subsection (1)(f) unless the employer is satisfied, (a) that the loss or damage has been caused by the worker and the worker is clearly shown to be responsible; (b) that the amount to be deducted is fair and does not exceed the actual value of the loss or damage suffered by the employer or that the amount represents a fair estimate of the loss or damage suffered; (c) that the worker has been given reasonable opportunity to show cause why the deductions should not be made; and (d) that the rate of the deductions is such as to avoid hardship to the worker and his or her dependants. (3) Where a worker, who is aggrieved by any deduction made by his or her employer under subsection (1), is unable to resolve the matter with the employer, the worker may present a complaint in writing to the Commission. (4) The Commission shall investigate the complaint and its decision on the matter shall subject to any other law be final. Employer not to compel workers to use its store 71. Where an employer establishes a store for the sale of commodities to the workers or operates a service for them, the employer shall not coerce the workers to make use of the store or service. Paid public holidays 72. Every worker is entitled to be paid his or her remuneration for public holidays

PART X SPECIAL PROVISIONS RELATING TO TEMPORARY WORKERS AND CASUAL WORKERS


Right to employ and application of this Part 73. (1) Subject to this Act, an employer may hire a worker on terms that suit the operations of the enterprise. (2) Notwithstanding subsection (1), this Part does not apply to, (a) (b) (c) (d) piece workers; part-time workers; sharecroppers; apprentices;

(e) sea-going personnel in the fishing industry who are wage earners; and (f) any person who works less than an average of twenty-four hours a week. Casual worker 74. (1) A contract of employment of a casual worker need not be in writing. (2) A casual worker shall (a) be given equal pay for work of equal value for each day worked in that organization; (b) have access to any necessary medical facility made available to the workers generally by the employer; (c) be entitled to be paid for overtime work by his or her employer in accordance with section 35; and (d) be paid full minimum remuneration for each day on which the worker attends work, whether or not the weather prevents the worker from carrying on his or her normal work and whether it is possible or not, to arrange alternative work for the worker on such a day. Temporary worker 75. (1) a temporary worker who is employed by the same employer for a continuous period of six months and more shall be treated under this Part as a permanent worker. (2) Without prejudice to the terms and conditions of employment mutually agreed to by the parties, the provisions of this Act in respect of minimum wage, hours of work, rest period, paid public holidays, night work and sick leave are applicable to a contract of employment with a temporary worker. Remuneration of temporary and casual workers 76. (1) Subject to this section, the minimum remuneration of a temporary worker or a casual worker shall be determined as follows: (a) where a temporary worker or a casual worker is required to work on week-days only, the minimum monthly remuneration is the amount represented by the workers daily wage multiplied by twenty-seven; (b) where a temporary worker or a casual worker is required to work every day in the week, the minimum monthly remuneration is the amount represented by three hundred and sixty-five times his daily wage divided by twelve. (2) A temporary worker or a casual worker referred to in subsection (1)(a) is not entitled to 1/27 of his or her minimum monthly remuneration as specified in that paragraph for each day the worker is absent from work during the month. (3) A temporary worker or a casual worker referred to in subsection (1)(b) is not entitled to a twenty-eighth, twenty-ninth, thirtieth or thirty-first part of his or her minimum remuneration as specified in that paragraph for each day the worker is absent from work during the month, depending on whether the month consists of twenty-eight, twenty-nine, thirty or thirty-one days. (4) An employer shall pay a temporary worker or a casual worker the full minimum remuneration for each day on which the worker attends work, whether or not wet weather prevents the worker from

carrying on his or her normal work and whether it is possible or not, to arrange alternative work for the worker on such a day. (5) A temporary worker or a casual worker is entitled to be paid for overtime work by his or her employer in accordance with section 35. Payment of remuneration for public holidays 77. Every employer shall pay each temporary or casual worker in respect of every public holiday the full remuneration which would have been payable to the temporary or casual worker for a full days work if that day had not been a public holiday. (2) Where a temporary or casual worker attends and performs work of a full day or more on a public holiday, the employer shall pay the worker in addition, the remuneration which would have been payable to the temporary or casual worker for the work if that day had not been a public holiday. (3) Where a temporary or casual worker attends and performs work for part only of a public holiday, the employer shall pay the worker in addition to the remuneration provided under subsection (1), the proportion of the remuneration for a full days work on that day if that day had not been a public holiday, represented by the number of hours for which the temporary or casual worker has performed work. (4) Any payment required to be made under subsection (1), (2) or (3) in respect of a public holiday shall be made after the public holiday in the same manner as the worker is normally paid. (5) When an employer fails to comply with subsection (1), (2), (3) or (4), the temporary worker or the casual worker aggrieved by the non-compliance of the employer may present a written complaint to the Commission for determination and the parties shall abide by the decision of the Commission. (6) The Commission may order the employer to pay, such sum as appears to the Commission to be due to the temporary worker or the casual worker on account of any remuneration payable to him or her under this section, and may in that order specify the time within which the payment shall be made. Interpretation 78. In this part temporary worker means a worker who is employed for a continuous period of not less than one month and is not a permanent worker or employed for a work that is seasonal in character; casual worker means a worker engaged on a work which is seasonal or intermittent and not for a continuous period of more than six months and whose remuneration is calculated on a daily basis.

PART XI - TRADE UNIONS AND EMPLOYERS ORGANISATIONS


Freedom of Association 79. (1) Every worker has the right to form or join a trade union of his or her promotion and protection of the workers economic and social a. policy making; b. decision making; c. managerial; d. holding a position of trust; e. performing duties that are of highly confidential nature; or f. an agent of a shareholder of an undertaking, may not form or join (3) Subject to subsection (4), the classes of workers referred to in subsection (2) shall be determined by agreement between the employer and the workers or trade unions. (4) In determining whether a worker falls within the class of workers referred to in subsection (2), the parties shall consider the organizational structure and job descriptions or functions of the worker concerned. Formation of trade union or employers organization 80. 1. Two or more workers employed in the same undertaking may form a 2. Two or more employers in the same industry or trade, each of whom employs not less than fifteen workers may form or join an employers organization. Organizational rights 81. Every trade union or employers organization has the right to a. draw up its constitution and rules, elect its officers and representatives; b. organize its administration and activities and formulate its own programmes; c. take part in the formulation, and become a member of any federation of trade unions or employers organization and participate in its lawful activities; and d. affiliate to and participate in the activities of, or join an international workers or employers organizations. Independence of trade unions and employers organizations 82. A trade union or an employers organization shall not be subject to the control of or be financially or materially aided by a political party. trade unions. interests. considered as (2) Notwithstanding subsection (1), a worker whose function is normally choice for the

Application for Registration 83. (1) A trade union or employers organization shall apply in writing to the Chief Labour Officer to be registered. (2) An application for registration under subsection (1) shall be submitted with the constitution, rules, names of officers and office address of the trade union or employers organization. (3) If, after considering the application, the Chief Labour Officer is satisfied that (a) there has been compliance with subsection (2); (b) the applicant is a trade union or employers organization duly established under any enactment for the time being in force as a body corporate; (c) the internal organization of the trade union or employers organization conforms to democratic principles; (d) the name of the trade union or employers organization does not closely resemble that of another registered trade union or employers organization, so as to mislead or confuse the public; (e) the rules of the trade union or employers organization are in conformity with section 85; and (f) the constitution or rules of the trade union or employers organization do not discriminate on the grounds stated in section 87 against any person, the Chief Labour Officer shall register the trade union or employers organization. Certificate of registration 84. A trade union or an employers organization registered under section 81 shall be issued with a certificate of registration by the Chief Labour Officer. Rules of trade unions and employers organisations 85. The rules of a trade union or an employers organization shall include provisions in respect of the following matters: (a) (b) (c) (d) (e) the same of the trade union or organization; the registered office to which correspondence and notices may be addressed; the principal objects of the trade union or employers organization; the qualifications for membership; the grounds on which an officer or a member may be suspended or dismissed from office or membership; (f) the procedure for suspension or dismissal of an officer or a member; (g) the membership fees and other subscriptions payable; (h) the manner of dissolution of the trade union or employers organization and disposal of its assets; (i) the manner of altering, amending or revoking its constitution or rules; and (j) the powers, functions and duties of officers of the trade union or employers organization. Register of trade unions and employers organizations 86. The Chief Labour Officer shall keep and maintain a register of trade unions and employers organizations, in which shall be entered the prescribed particulars relating to them and any alterations or changes affecting them.

Protection against discrimination 87. (1) A trade union or employers' organization shall not discriminate in its constitution or rules against any person on grounds of race, place of origin, political opinion, colour, religion, creed, gender or disability. (2) The Chief Labour Officer shall not register a trade union or employers organization which contravenes subsection (1), unless the trade union or employers organization takes steps to rectify the defect in its constitution or rules within a period specified by the Chief Labour Officer. Effect of registration 88. The rights and powers conferred on trade unions or employers organizations under this Act shall be exercised only if the trade unions or employers organizations are registered in accordance with this Part. Change of name 89. (1) A trade union or an employers organization may change its name in accordance with the requirements of its constitution or rules. (2) A change of name shall not affect any rights or obligations of the trade union or employers organization or its member otherwise the change will not be valid. Amalgamation 90. Any two or more trade unions or employers organizations may in accordance with the requirements of their constitutions or rules, amalgamate to form one trade union or employers organization. Registration of change of name and amalgamation 91. (1) A written notice concerning a change of name or amalgamation duly signed by officers of the trade union or employers organization or the amalgamated trade union or employers organization shall be registered with the Chief Labour Officer within fourteen days after the change of name or amalgamation. (2) The Chief Labour Officer shall direct the officer of a trade union or employers organization which fails to comply with subsection (1) to do so within a period specified by the Chief Labour Officer, and the office shall comply with the direction failing which the change shall not be valid.

Alteration of rules 92. (1) Any alteration of the rules of a trade union or an employers organization shall be registered with the Chief Labour Officer by the trade union or the employers organization. (2) The Chief Labour Officer shall direct the officer of the trade union or employers organization which fails to comply with subsection (1) to do so within a period specified by the Chief Labour Officer, and the officer shall comply with the direction. Federation 93. (1) A federation of trade unions or a federation of employers organization shall be subject to all the provisions of this Act applicable to trade unions or employers organizations. Accounts and audit 94. (1) A trade union or an employers organization registered under this Act shall (a) keep books and records of accounts of its income, expenditure, assets and (b) prepare annual financial statements consisting of all income and expenditure statements in respect of each financial year of the trade union or employers organization and a balance sheet showing its assets, liabilities and financial position at the end of that financial year. (2) The books and records of accounts and financial statements shall be audited within six months after the end of its financial year by an auditor appointed by the trade union or employers organization. Audited financial statements 95. A trade union or an employers organization shall, within seven months after the end of its financial year, submit to the Chief Labour Officer a copy of its audited financial statement. and liabilities;

PART XII COLLECTIVE AGREEMENT


Collective agreement 96. Subject to the provisions of this Act, a collective agreement relating to the terms and conditions of employment of workers, may be concluded between one or more trade unions on one hand and representatives of one or more employers or employers organizations on the other hand. Duty to negotiate in good faith

97. (1) All parties to the negotiation of a collective agreement shall negotiate in good faith and make every reasonable effort to reach an agreement. (2) For the purpose of subsection (1), either party to the negotiation shall make available to the other party information relevant to the subject matter of the negotiation. (3) When any information disclosed for the purpose of the negotiation of a collective agreement is not make public, the information shall be treated as confidential by the party receiving the information and shall not be disclosed to a third party without the prior written consent of the party providing the information. (4) The parties to the negotiation of a collective agreement shall not make false or fraudulent misrepresentations as regards matters relevant to the negotiations. Contents of collective agreement 98. Without prejudice to the other provisions of this Act and subject to any agreement between the (a) the class or category of workers to which it relates; (b) the conditions of work, including the hours of work, rest period, meal breaks, annual leave, occupational health and safety measures; (c) the remuneration and the method of calculating the remuneration of the workers; (d) the period of probation and conditions of probation; (e) the period of notice of termination of employment, transfer and discipline; (f) the procedures for the avoidance and settlement of disputes arising out of the interpretation, application and administration of the agreement; (g) the principles for matching remuneration with productivity; and (h) the essential services within the establishment Collective bargaining certificate 99. (1) A trade union shall make an application to the Chief Labour Officer for a certificate appointing that trade union as the appropriate representative to conduct negotiations on behalf of the class of workers specified in the collective bargaining certificate with the employers of the workers. (2) An application made under subsection (1) shall include (a) the description of the class of workers in respect of whom the and their estimated number; and (b) the number of workers of that class who are members of the trade union by whom the application is made. (3) The class of workers may be specified in a certificate issued under this section by reference to the employer of the workers or to the occupation of the workers or in any other manner sufficient to identify them. application is made parties, a collective agreement may include provisions on the following matters:

(4) The Chief Labour Officer shall subject to regulations made by the Minister, determine which union shall hold a collective bargaining certificate for the class of workers in a situation where there is more than one trade union at the work place. (5) A collective bargaining certificate will be issued to a union for the same class of workers at a particular time. (6) A certificate issued under this section shall be have effect notwithstanding that some of the workers of the class specified are not members of the trade union appointed under the certificate. (7) A certificate issued under this section shall be published in the Gazette by the Chief Labour Officer. (8) At any time after the issue of a certificate under this section, the Chief Labour Officer may (a) at the request of either the trade union or employers organization; and (b) after consultation with the trade union or employers organization, withdraw the certificate without affecting the right of the trade union to apply for a fresh certificate under this section. (9) A trade union which is dissatisfied or aggrieved with a decision of the Chief Labour Officer under Parts XI or XII of this Act may apply to the National Labour Commission for redress. Variation of certificate 100. (1) At any time after the issue of a certificate under section 99 the Chief Labour Officer may, after consultation with the trade union named in the certificate and the appropriate employers organization, issue an amending certificate varying the class of workers specified in the certificate and any reference in this Act to a certificate issued under section 99 shall be deemed to include such a certificate as amended under this section. (2) The issuance of an amending certificate shall not affect the membership of a standing negotiating committee or a joint standing negotiating committee appointed under section 101, but the employer or workers of the class specified in the certificate as varied by the amending certificate, may nominate representatives to act either in the place of or together with their existing representatives. (3) When an amending certificate is issued, the chief Labour Officer shall cause a copy of the amending certificate to be published in the Gazette. (4) When an amending certificate is issued, extending the class of workers specified in the original certificate, and there is in force a collective agreement which applies to all workers of the class specified in the original certificate, the trade union named in the certificate shall take such steps as appear to it to be appropriate for bringing that agreement to the attention of all the workers to whom the agreement is extended by the amending certificate. (5) When an amending certificate is issued excluding any persons from the class of workers specified in the original certificate, and there is in force a collective agreement which applied to those

persons, the amending certificate shall not affect that application of the agreement to them, or any right to vary it, but a collective agreement made after the issue of the amending certificate by another trade union shall have effect notwithstanding anything in the previous agreement.

Negotiating committees 101. (1) The trade union appointed in a certificate issued under section 99 and the employer of the workers of the class to which the certificate relates shall each nominate their representatives authorized to conduct negotiations on their behalf, and the representatives shall constitute a standing negotiating committee to negotiate on matters referred to it. (2) A standing negotiating committee referred to in subsection (1) shall make rules governing its procedure. (3) A standing negotiating committee or joint standing negotiating committee set up under this section shall have the power to appoint sub-committees to which it may delegate any of its functions under this Act. Negotiations by negotiating committee or joint negotiating committee 102. (1) Negotiations on all matters connected with the employment or non-employment or with the terms of employment or with the conditions of employment of any of the workers of the class specified in a certificate issued under section 99, shall be conducted through the standing negotiating committee or the joint standing negotiating committee as the case may be. (2) Either party represented on the committee may give notice to the other party requiring them to enter into negotiations on any matters which may properly be dealt with by the committee. (3) An agreement concluded between the parties shall be in writing and signed by a duly authorized member of the committee representing each party and two copies of the agreement shall be deposited with the Commission and the Chief Labour Officer. Negotiations may be conducted by a union officer or member 103. (1) Without prejudice to section 101, an officer or a member of a trade union who is duly appointed by his or her trade union, may conduct negotiations on any matter connected with the employment or non-employment or terms of employment or conditions of employment of any worker who belongs to the class of workers specified in the certificate. (2) A person conducting negotiations under this section may give notice to the parties requiring them to enter into negotiations on any matters which may be properly dealt with by the person and it

shall be the duty of both parties to make every reasonable effort to come to an agreement on the matters to which the notice relates. (3) An agreement concluded between the parties shall be in writing and signed by the person conducting the negotiations. (4) Rules made under subsection (2) of section 101 may be applicable to negotiations conducted under this section and to other matters relating to such negotiations. Failure to negotiate 104. If the party on whom a notice is served under subsection (2) of section 102 or subsection (2) of section 103, does not within fourteen days after service of the notice take any steps to enter into negotiations, the Commission shall direct the party to enter into negotiations immediately, and the party shall comply with the directive.

Effect of collective agreement 105. (1) An agreement concluded by a trade union through a standing negotiating committee or a joint standing negotiating committee shall, so far as the terms of the agreement permit, apply to all workers of the class specified in the certificate. (2) The provisions of a collective agreement concerning the terms of employment and termination of employment, and personal obligations imposed on, and rights granted to, a worker or employer shall be regarded as terms of a contract of employment between each worker to whom the provisions apply and his or her employer. (3) Any provisions that have effect as terms of a contract of employment under subsection (2), shall continue to have effect after the expiration of the collective agreement, so long as they have not been varied by agreement of the parties or in pursuance of this Act. (4) The rights conferred on a worker by a collective agreement shall not be waived by the worker and, if there is any conflict between the terms of a collective agreement and the terms of any contract not contained in the collective agreement, the collective agreement shall prevail unless the terms of the contract are more favourable to the worker; and it is immaterial whether or not the contract was concluded before the collective agreement. (5) The withdrawal of a certificate appointing a trade union under subsection (8) of section 99 shall not affect the validity of a collective agreement made by the trade union before the certificate was withdrawn, but any collective agreement which is made by another trade union after the withdrawal of the certificate shall have effect notwithstanding anything in the previous agreement.

Notice of collective agreement to workers 106. The parties to the negotiations shall bring the terms of the concluded collective agreement to the notice of all the workers concerned. Duration of collective agreements 107. (1) Every collective agreement concluded under section 103 shall be for a term of at least one year. (2) A party to a collective agreement shall not give notice under section 102 requiring the other party to negotiate with respect to ay matter governed by a collective agreement unless, as the time when the notice is served, that agreement is due, either as a result of the notice given under this section or otherwise, to expire within twenty-eight days after the service of the notice. (3) Where no notice is given under subsection (2) by either party within thirty days after the expiration of the collective agreement, the collective agreement shall be deemed to have continued in force until rescinded by the parties.

Provision for dispute settlement 108. Every collective agreement shall contain a provision for final and conclusive settlement under Part XVIII of this Act of all differences between the persons to whom the agreement applies. Power to extend collective agreements 109. (1) Where it appears to the Chief Labour Officer that all or any of the terms of a collective agreement are suitable for application to a class of workers who are engaged in the same kind of work, or who work in the same area, as the workers to whom the collective agreement applies; and (b) that the parties who concluded the agreement were sufficiently representative of the workers to whom the agreement is to apply and their employers, the Chief Labour Officer may direct that those terms of the collective agreement shall apply in relation to that class of workers and their employers as they apply in relation to workers of the class specified in the certificate and their employers. (2) The Chief Labour Officer shall not issue any directive under sub-section (1) unless, three months before issuing the directive, the Chief Labour Officer has, after consultation with the appropriate employers organizations and the trade unions concerned, published in the Gazette, a notice (a)

(a) describing the class of workers to whom it is proposed to apply the agreement, setting out the text of the collective agreement; and (b) giving particulars of the manner in which and time within which objections to the proposal may be submitted to the Chief Labour Officer. (3) the Chief Labour Officer shall take appropriate steps to bring the contents of the notice to the attention of employers and workers affected by the proposals. (4) The Chief Labour Officer shall not issue any directive under sub-section (1) applying the terms of an agreement to workers who were not in the class described in the notice given under subsection (2). (5) Where a collective agreement, the terms of which are applied by any directive issued under subsection (1) ceases to have effect, the directive shall cease to have effect on the same date. Effect of extension of collective agreements 110. (1) Any directive issued under section 109 that extends the provisions of a collective agreement on terms of employment and termination of employment, and personal obligations imposed on, and rights granted to, a worker, shall be regarded as terms of a contract of employment between each worker to whom those provisions apply and his or her employer. (2) The terms of a contract of employment under subsection (1) shall continue to have effect after the directive ceases to have effect so long as those provisions have not been varied by agreement between the parties or in pursuance of this Act. (3) The rights conferred on a worker by any directive issued under section 109 shall not be waived by the worker and, if there is any conflict between the term extended by the directive and the terms of any contract, the directive shall prevail, unless the terms of the contract are more favourable to the worker. Union dues 111. (1) A trade union to which this section applies may issue to the employer of any workers who are members of that trade union, a notice in the form in Schedule II to this Act requesting the employer to deduct from the wages of his or her workers covered by a certificate issued under section 99, the sums specified by the trade union; and (b) to pay over the sums deducted as may be directed by the trade union, and, subject to this section, the employer shall comply with the notice. (2) A trade union to which this section applies may, on issuing a notice in the form in Schedule II to this Act or subsequently, issue a further notice requesting the employer, out of the amount which the employer is to pay over to the trade union, to remit a proportion stated in the notice directly to a specified branch of the trade union. (3) A sum deducted in accordance with a notice given under this section shall be in discharge of the liability of the respective member of the trade union to pay dues to that trade union. (a)

(4) a sum which an employer has in accordance with a notice under this section deducted from the wages of a worker to the trade union shall be paid over not more than one month after the date on which the wages are paid, and the trade union may sue in its own name for any sum which ought to have been paid to the trade union

PART XIII NATIONAL TRIPARTITE COMMITTEE


Establishment of National Tripartite Committee 112. There is hereby established a National Tripartite Committee which shall be composed of (a) (b) (c) (d) the Minister who shall be the chairperson; five representatives of the Government; five representatives of employers organization; and five representatives of organized labour.

Functions of the National Tripartite Committee 113. (1) The National Tripartite Committee shall (a) determine the national daily minimum wage; (b) advise on employment and labour market issues, including labour laws, international labour standards, industrial relations and occupational safety and health; (c) consult with partners in the labour market on matters of social and economic importance; and (d) perform such other functions as the Minister may request for the promotion of employment development and peace in the labour sector. (2) The Minister shall publish in the Gazette and in such public media as the Minister may determine, a notice of the national daily minimum wage determined under subsection (1). (3).The Ministry shall provide the National Tripartite Committee with such secretarial services as the Committee may require for the effective performance of its functions. Meeting of the National Tripartite Committee 114. (1) The National Tripartite Committee shall meet at times and at places determined by the members but shall meet at least once in every three months. (2) The quorum for a meeting of the National Tripartite Committee shall be nine members with at least two members each representing the government, organized labour and employers organizations. (3) The National Tripartite Committee may invite any interest group to attend any of its meetings. (4) Except as otherwise provided in this section, the National Tripartite Committee shall regulate its proceedings. Regional and District Tripartite Committees

115. (1) The National Tripartite Committee may set up sub-committees of the Committee in such Regions and Districts as it considers necessary for the effective performance of its functions. (2) The composition of a Regional or District sub-committee of the National Tripartite Committee shall be determined by the Committee except that there shall be equal representation of Government, organized labour and employers organizations. (3) The Ministry shall provide a sub-committee with such secretarial services as the subcommittee may require.

PART XIV FORCED LABOUR


Prohibition of forced labour 116. (1) A person shall not be required to perform forced labour. (2) It is an offence for an employer to exact or cause to be exacted, or permit to be exacted, for his or her benefit forced labour from any worker. (3) Any employer convicted of an offence under subsection (2) is liable to a fine not exceeding 250 penalty units. Interpretation of forced labour 117. In this Part forced labour means work or service that is exacted from a person under threat of a penalty and for which that person has not offered himself or herself voluntarily, but does not include (a) labour required as a result of a sentence or order of a court; (b) labour required of a member of a disciplined force or service as his or her duties; (c) labour required during a period when the country is at war or in the event of an emergency or calamity that threatens life and well-being of the community, to the extent that the requirement of the labour is reasonably justifiable in circumstances of a situation arising or existing during that period for the purpose of dealing with the situation; or (d) labour reasonably required as part of normal communal or other civic obligations.

PART XV OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT


General health and safety conditions 118. (1) It is the duty of an employer to ensure that every worker employed by him or her works under satisfactory, safe and healthy conditions (2) Without limiting the scope of subsection (1), an employer shall (a) (b) provide and maintain at the workplace, plant and system of work that are safe and without risk to health; ensure the safety and absence of risks to health in connection with use, handling, storage and transport of articles and substances;

(c)

(d) (e) (f) (g) (h) (3) It

provide the necessary information, instructions, training and supervision having regard to the age, literacy level and other circumstances of the worker to ensure, so far as is reasonably practicable, the health and safety at work of those other workers engaged on the particular work; take steps to prevent contamination of the workplaces by, and protect the workers from, toxic gases, noxious substances, vapours, dust, fumes, mists and other substances or materials likely to cause risk to safety or health; supply and maintain at no cost to the worker adequate safety appliances, suitable firefighting equipment, personal protective equipment, and instruct the workers in the use of the appliances or equipment; provide separate, sufficient and suitable toilet and washing facilities and adequate facilities for the storage, changing, drying and cleansing from contamination of clothing for male and female workers; provide adequate supply of clean drinking water at the work-place; and prevent accidents and injury to health arising out of, connected with, or occurring in the course of, work by minimizing the causes of hazards inherent in the working environment. is the obligation of every worker to use the safety appliances, fire-fighting equipment and

personal protective equipment provided by the employer in compliance with the employers instructions. (4) An employer shall not be liable for injury suffered by a worker who contravenes subsection (3) where the injury is caused solely by non-compliance by the worker. (5) An employer who, without reasonable excuse, fails to discharge any of the obligations under subsection (1) or (2) commits an offence and is liable on summary conviction to a fine not exceeding 1000 penalty units or to imprisonment for a term not exceeding 3 years or to both.

Exposure to imminent hazards 119. (1) When a worker finds himself or herself in any situation at the workplace which she or he has reasonable cause to believe presents an imminent and serious danger to his or her life, safety or health, the worker shall immediately report this fact to his or her immediate supervisor and remove himself or herself from the situation. (2) An employer shall not dismiss or terminate the employment of a worker or withhold any remuneration of a worker who has removed himself or herself from a work situation which the worker has reason to believe presents imminent and serious danger to his or her life, safety or health. (3) An employer shall not require a worker to return to work in circumstances where there is a continuing imminent and serious danger to the life, safety or health of the worker. Employer to report occupational accidents and diseases 120. An employer is required to report as soon as practicable and not later than seven days from the date of the occurrence to the appropriate government agency, occupational accidents and diseases which occur in the workplace.

Specific measures 121. The Minister may by legislative instrument make Regulations providing for specific measures to be taken by employers to safeguard the health and safety of workers employed by them.

PART XVI LABOUR INSPECTION


Labour inspection 122. There shall be carried out inspection to (a) secure the enforcement of the provisions of this Act relating to conditions of work and the protection of workers at their workplaces, including the provisions relating to hours of work, wages, safety, health and welfare of the workers and the employment of young persons; provide technical information and advice to employers and workers concerning the most effective means of complying with the provisions of this Act; bring to the notice of the Labour Department or the Commission any defects of this Act; and report to the Labour Department or the Commission other unfair labour practices or abuses not specifically provided for by this Act.

(b) (c) (d)

Appointment of Inspector 123. Inspectors shall be appointed by the appointing authority of the Civil Service for the purposes specified in this Act.

Powers of labour inspectors 124. (1) An inspector has power to (a) enter freely and without notice at any hour of the day or night to inspect any workplace during working hours; (b) enter during the day or night any premises which the inspector has reason to believe are subject to inspection; (c) carry out any examination, test or inquiry the inspector considers necessary in order to ensure that the provisions of this Act and Regulations made under this Act are complied with; (d) interview, either alone or in the presence of witnesses, any employer or worker on any matter concerning the application and compliance with the provisions of this Act and Regulations made under it; (e) require the production of any books, registers or other documents which relate to the terms and conditions of employment of the workers, in order to ascertain that these are in

conformity with this Act and Regulations made under it and to copy the documents or make extracts from them; (f) enforce the posting of notices required by or under this Act; (g) take or remove for purposes of analysis samples of materials and hazardous or chemical substances used or handled by workers in the course of their employment; and (h) direct employers to carry out alterations to buildings, installations and plant necessary to avert any danger or threat of danger to the health or safety of the workers within such period as may be specified in the direction, but no such period shall be allowed if the inspector is of the opinion that there is an imminent danger to the health or safety of the workers. (2) An employer who is directed under subsection (1) (h) to carry out any alterations may, (a) where the period within which the alterations are to be carried out is specified, appeal to the Minister against the direction within seven days before the expiration of the period; or (b) where no period is specified, appeal not later than seven days after the direction, against the direction, to the Minister (3) The decision of the Minister on the appeal shall subject to any other law be final, and the employer shall abide by the decision and any related consequential order made. (4) Where an appeal is lodged under subsection (2) the Minister shall direct the employer to take such interim measures as the employer considers necessary to avert any danger or threat of danger to the health or safety of the workers pending the determination of the appeal. (5) An employer directed under subsection (1) (h) to carry out any alterations who does not appeal to the Minister against the direction shall (a) in the case of imminent danger to health or safety of workers, carry out the alterations immediately; or (b) where the period for the carrying out of the alterations, is specified, carry out the alterations before the expiration of the period. (6) An employer who fails to comply with a decision or order of the Minister or an inspector under subsection (2) or (4) commits an offence and is liable on summary conviction to a fine not exceeding 250 penalty units and in addition shall be liable to pay compensation to any person who proves that he or she has suffered any loss, damage or injury as a result of the non-compliance by the employer. Inspectors to maintain confidentiality 125. (1) An inspector shall not (a) (b) (c) have direct or indirect interest in any undertaking he or she is required to inspect; divulge during or after termination of his or her service, any manufacturing or commercial secrets or working processes or confidential information which may have come to his or her knowledge in the course of his or her duties; disclose the source of any complaint by which the inspector is informed of any contravention of the provisions of this Act or Regulations made thereunder or intimate to the employer or the employers representative that an inspection was carried out in consequence of such complaint.

(2) An inspector who contravenes subsection (1) commits an offence and is liable on summary conviction to a fine not exceeding 500 penalty units or to imprisonment for a term not exceeding 2 years or to both. Obstruction of inspectors 126. Any person who willfully obstructs a labour inspector in the performance of his or her functions under this Act commits an offence, and is liable on summary conviction to a fine not exceeding 250 penalty units or to imprisonment not exceeding 12 months or both.

PART XVII UNFAIR LABOUR PRACTICES


Discrimination 127. (1) A person who discriminates against any person with respect to the employment or conditions of employment because that other person is a member or an officer of a trade union is guilty of unfair labour practice. (2) A person who seeks by intimidation, dismissal, threat of dismissal, or by any kind of threat or by imposition of a penalty, or giving or offering to give a wage increase or any other favourable alteration of terms of employment, or by any other means, seeks to induce a worker to refrain from becoming or continuing to be a member or officer of a trade union is guilty of unfair labour practice. (3) A worker or group of workers who by any kind of threat seeks to intimidate the employer during negotiations of a collective agreement is guilty of unfair labour practice. (4) Employers or employers organizations who seek by any kind of threat to intimidate the worker during negotiations of a collective agreement are guilty of unfair labour practice.

Interference by employers in union affairs 128. An employer who takes part in the formation of a trade union or, with the intention of adversely influencing a trade union, makes any contribution, in money or moneys worth, to that trade union, is guilty of unfair labour practice. Employer to facilitate workers trade union business 129. (1) An employer shall, subject to notice of not less than twenty four hours, allow any officer of a trade union whose members include any of his or her workers, reasonable facilities and time to confer with the employer or workers on matters affecting the members of the trade union who are his or her workers and an employer who fails to give reasonable facilities and time is guilty of unfair labour

practice. (2) In this section reasonable facilities means such facilities as the employer and his or her workers may agree are reasonably required for the purposes stated in subsection (1). Interference that causes financial loss 130. Subject to the other provisions of this Act, if a worker carries on any activity intended to cause serious interference with the business of his or her employer that may result in financial loss, the worker is guilty of unfair labour practice. Union activities during working hours 131 (1) An officer of a trade union or any other person shall not during normal working hours attempt to persuade or induce a worker, not covered by a collective agreement, to become a member or an officer of a trade union while the worker is on the premises of his or her employer, without the consent of the employer. (2) An officer of a trade union or any other person shall not during normal working hours confer with an employee on trade union matters while the worker is on the premises of his or her employer without the consent of the employer. (3) A person who contravenes subsection (1) or (2) is guilty of unfair labour practice.

Complaints 132. The Commission shall enquire into and determine complaints of unfair labour practices brought before it in accordance with its rules of procedure. Commission to make orders 133. (1) Where the Commission finds that a person has engaged in an unfair labour practice it may, if it considers fit, make an order forbidding the person to engage or continue to engage in such activities as it may specify in the order. (2) Where the Commission finds that a person has engaged in an unfair labour practice under section 127 which involves the termination of employment or of the conditions of his or her employment, the Commission may, if it considers fit, make an order requiring the workers employer. to take such steps as may be specified in the order to restore the position of the worker; and (b) to pay to the worker a sum specified in the order as compensation for any loss of earnings attributed to the contravention. (3) Where the Commission finds that a person has engaged in an unfair labour practice under section 128 by making a contribution to a trade union, the Commission may, if it considers fit, order that the trade union refund the contribution. (4) For the purposes of enforcing an order of the Commission under this section, the order shall have effect as if it were made by the High Court. Appeals (a)

134. A person aggrieved by an order, direction or decision made or given by the Commission under section 133 may, within fourteen days of the making or giving of the order, direction or decision, appeal to the Court of Appeal.

PART XVIII-NATIONAL LABOUR COMMISSION Sub-Part I Establishment and functions of the National Labour Commission
Establishment of Commission 135. There is establishment by the Act a National Labour Commission referred to in this Act as the Commission Composition of the Commission 136. (1) The Commission shall consist of the following persons: (a) a chairperson who shall be nominated by the employers organization and organized labour except that where there is failure to nominate a chairperson within sixty days as provided, the employers organization in consultation with organized labour shall submit the matter to a mediator agreed on by them; and (b) six representatives, two each nominated by the Government, employers organization and organized labour. (2) The chairperson and the other members of the Commission shall be appointed by the President acting in consultation with the Council of State. Qualifications of chairperson and other members of the Commission 137. A person is qualified to be appointed a member of the Commission if that person does not hold office in a political party; and has knowledge and expertise in labour relations and management, except that in the case of the chairperson, the person shall also be knowledgeable in industrial law.

Functions and independence of the Commission 138. (1) (a) (b) (c) (d) (e) (f) The functions of the Commission are as follows: to facilitate the settlement of industrial disputes; to settle industrial disputes to investigate labour related complaints, in particular unfair labour practices and take such steps as it considers necessary to prevent labour disputes; to maintain a data base of qualified persons to serve as mediators and arbitrators; to promote effective labour co-operation between labour and management; and to perform any other function conferred on it under this Act or any other enactment.

(2)

In the exercise of its adjudicating and dispute settlement function, the Commission shall

not be subject to the control or direction of any person or authority. Powers of the Commission 139. (1) The Commission shall exercise the following powers: (a) Receive complaints from workers, trade unions, and employers, or employers organization (i) On industrial disagreement; an (ii) Allegation of infringement of any requirements of this Act and Regulations made under this Act; (b) Require an employer to furnish information and statistics concerning the employment of its workers and the terms and conditions of their employment in a form and manner the Commission considers necessary; and (c) Require a trade union or any workers organization to provide such information as the Commission considers necessary (d) Notify employers and employers organizations or workers and trade unions in cases of contravention of this Act and Regulations made under this Act and direct them to rectify any default or irregularities. (2). Without prejudice to subsection (1), the Commission shall in settling an industrial dispute, have the powers of the High Court in respect of (a). Enforcing the attendance of witness and examining them on oath, affirmation or otherwise. (b). Compelling the production of documents; and (c ) the issue of a commission or request to examine witness abroad. (3)The Commission shall in respect of its proceedings enjoy the same privileges and immunities pertaining to proceedings in the High Court. Meeting of the Commission 140. (1) The Commission shall meet to settle industrial disputes, but shall meet at least once in every two months to consider matters affecting its administration and the performance of its functions. (2) The Commission shall at its first meeting nominate one of its members as deputy chairperson. (3) The quorum at a meeting of the Commission shall consist of the chairperson or in the absence of the chairperson the deputy chairperson and four other members of the Commission at least one person each representing Government, employers organization and organized Labour. (4) The Commission may co-opt any person to attend meeting of the Commission as an adviser or a consultant. (5) A person co-opted to attend a meeting of the Commission does not have the right to vote on a matter for determination or decision by the Commission (6) The Commission may permit to be in attendance at its meetings such persons as the Commission may determine.

(7) Subject to subsection (2), the Commission shall regulate its own proceedings. Committees of the Commission 141. (1) The Commission may appoint (a) (b) a standing committee consisting of members of the members of the Commission (2) The Commission shall assign to any of its committees such of its functions as it may determine Allowances for members of the Commission and its Committees 142. The members of the Commission shall be paid allowances determine by the Minister in consultation with the Minister for Finance. Tenure of office of members 143. (1) The members of the Commission shall hold office for a period of four years and are eligible for re-appointment after the expiration of their tenure of office. (2) The chairperson or a member of the Commission may at any time resign his or her office by letter addressed to the President through the Minister. (3) A member of the Commission may be removed from the Commission by the President for inability to perform the functions of his or her office, for stated misbehaviour or for any just cause. Regional and District Committee of the Commission 144. (1) (2) Notwithstanding section 141, the Commission may establish in such Regional and District capitals as it considers necessary, Regional and District Labour Committees. The composition of a Regional or District Labour Committee shall be determined by the Commission except that there shall be equal representation of Government, organized labour and employers organization. (3) The members of a Regional or District Labour Committee shall be persons with knowledge in industrial relations. (4) A Regional or District Labour Committee shall elect from among its membership, a chairperson and a deputy chairperson. Functions of a Regional or District Labour Committee 145. Commission. A Regional or District Labour Committee shall perform in the respective region or district such of the functions of the Commission as shall be assigned to it in writing by the Commission; or an adhoc committee consisting of non-members or both members and non-

Meetings of a Regional or District Labour Committee 146. under the Act. Secretariat for the Commission 147. The Commission, a Regional or District Labour Committee of the Commission shall be provided with such secretarial services and staff as may be necessary for the effective performance of its functions under this Act. Expenditure of the Commission 148. There shall be appropriated annually to the Commission by Parliament such funds as the Commission requires to meet the expenditure of the Commission in the performance of its functions including those for its Regional and District Committees. Accounts and audit 149. (1) (2) (3) The Commission shall keep books of account and proper records in relation to The books of account and the records shall be in such form as the AuditorThe Auditor-General or an auditor appointed by the Auditor-General shall, within the books of account. General shall approve. three months after the expiration of each financial year, audit the books of accounts and records of the Commission in respect of the preceding year. (4) the Government. Reports form Regional and District Labour Committees 150. A Regional or District Labour Committee shall submit to the Commission annual reports within such period as the Commission may direct on its activities, and shall submit such other reports as the Commission may request. Annual reports of the Commission 151. (1) (2) The Commission shall, within eight months after the end of each financial year, The report shall include a copy of the audited accounts of the Commission in submit to the Minister an annual report on the activities of the Commission during that year. respect of the financial year and the report of the Auditor-General or the auditor appointed by the The financial year of the Commission shall be the same as the financial year of The provisions under sections 140 to 143 in respect of the Commission shall apply with such modifications as are necessary to the Regional and District Labour Committees provided for

Auditor-General on the audited accounts. (3) The Minister shall within two months of the receipt of the annual report from the

Commission submit the report to Parliament with such comments as the Minister considers necessary. Regulations by the Commission 152. (1) The Commission may by legislative instrument make regulations providing for a. the procedure for negotiation, mediation and arbitration proceedings, under this Act. b. other matters necessary for the effective discharge of its functions under this Act. (2) Regulations made under subsection (1) shall be under the signature of the chairperson of the Commission or in that persons absence under the signature of the deputy chairperson.

Sub-Part II - Settlement of industrial disputes


Settlement by negotiation 153. The parties to an industrial dispute are under an obligation to negotiate in good faith with a view to reaching a settlement of the dispute in accordance with the dispute settlement procedures established in the collective agreement or contract of employment.

Mediation 154. (1) Subject to the time limit in respect of essential services, if the parties fail to settle a dispute by negotiation within seven days after the occurrence of the dispute, either party or both parties by agreement may refer the dispute to the Commission and seek assistance of the Commission for the appointment of a mediator. (2) Where the Commission is satisfied that the parties have not exhausted the procedures established in the collective agreement or have not agreed to waive those procedures, the Commission shall order the parties to comply with those procedures within such time as the Commission may determine. (3) When the Commission is satisfied that (a) the parties have exhausted the procedures established in the agreement; (b) the parties have failed to settle the dispute; and (c) none of the parties has sought the assistance of the mediator, the Commission shall request the parties to settle the dispute by mediation within three days of the Commission becoming aware of the non-resolution of the dispute. (4) Where the parties agree to mediate and at the end of the mediation proceedings there is settlement of the dispute, the agreement between the parties as regards the terms of the settlement Commission to appoint a collective

shall be recorded in writing and signed by the mediator and the parties to the dispute. (5) (6) The settlement agreement referred to in subsection (4) shall be binding on all the parties unless the agreement states otherwise. When at the end of a mediation proceedings, no agreement is reached, the mediator shall immediately declare the dispute as unresolved and refer the dispute to the Commission. List of mediators and arbitrators 155. (1) The Commission shall maintain a list of qualified persons who are knowledgeable in industrial relations to serve as mediators or arbitrators for each group. (2) Appointments of mediators or arbitrators may be made from the list of mediators and arbitrators. (3) A person appointed an arbitrator or a member of an arbitration panel is not qualified to that capacity if the person has any financial or other interest in the undertaking serve in

or employers or workers organization involved in the dispute. Appointment of arbitrators 156. Subject to the Arbitration Act, 1961 (Act 38), or any general enactment on dispute resolution in force, the parties to an industrial dispute shall agree on the method of appointment of arbitrators or arbitration panel and in the absence of an agreement by the parties the Commission shall appoint an arbitrator or an arbitration panel. Voluntary arbitration 157. (1) When mediation fails under section 154 (6) and the dispute is referred to the Commission, the Commission shall with the consent of the parties refer the dispute to an arbitrator or an arbitration panel appointed under section 156. (2) The parties to an industrial dispute shall, within three days after the appointment of an arbitrator or an arbitration panel under section 156, submit to the arbitrator in writing a statement of the issues or questions in dispute signed by one or more of the parties or their representatives. (3) The Arbitrator shall as soon as possible appoint a time and place for the hearing and notify the parties. (4) If any party fails to appear before the arbitrator after the expiration of seven days after being so notified, the arbitrator shall proceed to hear and determine the dispute. Arbitration award 158. (1) The decision of the arbitrator or a majority of the arbitrators shall constitute the award and shall be binding on all the parties. (2) The arbitrator shall communicate the award in writing to the parties and the Commission within seventy-two hours after the award has been made except where the Commission is the arbitrator.

Notice of intention to resort to strike or lockout 159. Where (a) the parties fail to agree to refer the dispute to voluntary arbitration; or (b) the dispute remains unresolved at the end of the arbitration proceeding, either party intending to take strike action or institute lockout, shall give written notice of this to the other party and the Commission, with seven days after failure to agree to refer the dispute to voluntary arbitration or the termination of the proceedings. Strike and lockout 160. (1) A party to an industrial dispute who has given notice of intention to resort to a strike or lockout under section 159 may do so only after the expiration of seven days from the date of the notice and not at any time before the expiration of that period. (2) If the dispute remains unresolved within seven days from the commencement of the strike or lockout, the dispute shall be settled by compulsory arbitration under section 164. Cooling-off period 161. (1) A party to an industrial dispute shall not resort to a strike or lockout during the period when negotiation, mediation or arbitration proceedings are in progress. (2) Any party who contravenes subsection (1) is liable for any damage, loss or injury suffered by any other party to the dispute. Essential Services 162. (1) In any industrial dispute that affects workers engaged in an essential service, the parties to the dispute shall endeavour to settle the dispute within three days of the occurrence of the dispute by negotiation. (2) If after the expiration of the three days, the dispute remains unresolved, the parties shall within twenty-four hours of the expiry of the three days, refer the dispute to the Commission for settlement by compulsory arbitration under section 164. (3) The Commission shall take immediate steps, but not later than three days after the dispute has been referred to it, to settle the dispute by compulsory arbitration under section 164. Prohibition of strike or lockout in respect of essential services 163. An employer carrying on or a worker engaged in, an essential service shall not resort to a lockout or strike in connection with or in furtherance of any industrial dispute involving the workers in the essential service.

Compulsory reference to arbitration

164. (1) When a dispute is referred to compulsory arbitration in pursuance of section 160 or 162, the Commission shall be the arbitrators and shall serve on the parties a notice a. Stating what, in its opinion are the unresolved issues between the parties; and b. Asking the parties whether they agree to those issues. (2) The Commission shall, within fourteen days after service of the notice, determine the dispute by compulsory arbitration. (3) A compulsory arbitration shall be composed of three members of the Commission, one member each representing Government, organized labour and employers organization. (4) In a compulsory arbitration, the decision of the majority of the arbitrators shall constitute the award and shall be binding on all the parties. Powers of Arbitration 165. An arbitrator appointed under section 156 or 164 shall have the powers of the High Court in respect of enforcing attendance of persons before the arbitrator or examining such persons on oath or affirmation and compelling the production of documents. Vacancy in Arbitration Panel 166. (1) In an arbitration composed of more than one arbitrator, where a vacancy occurs in their number, the arbitrators may with the consent of the parties, act notwithstanding the vacancy. (2) Where the parties fail to give their consent as required under sub-section (1), the party whose number of arbitrators is affected by the vacancy, shall appoint another arbitrator to fill the vacancy immediately; failing that the Commission shall appoint another arbitrator to fill the vacancy. (3) In a compulsory arbitration, where a vacancy occurs in the arbitration panel, the other member of the Commission representing the interest group of the absent arbitrator shall fill the vacancy. Publication of compulsory arbitration award and effect of arbitration awards on existing employment contracts 167. (1) The award of the Commission in a compulsory arbitration shall, immediately on completion be published under in the Gazette by the Commission. (2) An award published under subsection (1) shall be final and binding on the parties unless challenged in the Court of Appeal on questions of law within seven days after the publication of the award. (3) Subject to any appeal, an award arising from a voluntary or compulsory arbitration shall prevail over any contract of employment or collective agreement in force at the time of the award and the terms of the contract of employment or collect agreement shall be deemed to have been modified as far as may be necessary in order to conform to the award.

PART XIX - STRIKES


Illegal strike or lockout

168.

(1) Subject to sections 159 and 160, a strike or lockout is legal if it is in sympathy with or in support of a strike action taken by another worker or group of workers against their employer on account of an industrial dispute with the employer. (2) A person who declares or instigates or incites others to take part in a strike or lockout or acts in furtherance of a strike or lockout which is illegal under subsection (1) is liable for any damage, loss or injury suffered by any other person as a result of the illegal strike or lockout. (3) The form of a strike or lockout in sympathy with another body or organization shall be in a form agreed upon with the management of the sympathizers and shall not disrupt the operational activities of the enterprise whose workers are sympathizers. (4) Without prejudice to subsection (2) a worker who takes part in an illegal strike may have his or her services terminated by the employer without notice for breach of his or her contract of employment or may forfeit his or her remuneration in respect of the period during which he or she is engaged in the illegal strike. (5) Without prejudice to subsection (2), an employer who resorts to illegal lockout is liable to pay the unpaid remuneration of the workers. (6) Regulations may provide further for matters relating to sympathy strikes.

Legal effect of lawful strike or lockout 169. (1) During any lawful strike or lockout, the employment relationship between the employer and the workers shall not be affected by the strike or lockout and any termination of the contract of employment as a result of the lawful strike or lockout is void. (2) No civil proceedings shall be brought against any worker, employer, trade union or employers organization or an officer or a member of such trade union or organization in respect of any lawful strike or lockout action taken in conformity with the provisions of this Act. (3) Nothing in this Part, shall render lawful an act of physical coercion or violence against any person or damage to the property of any person where the act or damage is an offence under the Criminal Code, 1960 (Act 29).

Temporary replacement of labour 170. (1) An employer may not employ any person to perform the work of a worker participating in a lawful strike unless the work is necessary to secure essential minimum maintenance services at the undertaking. (2) A worker has the right to refuse to do any work normally performed by the worker who is participating in a lawful strike except that the worker shall not refuse to perform the work if it is necessary to secure minimum maintenance services. (3) A dispute as to whether a work is necessary to secure minimum maintenance services shall be referred to the Commission for determination, and the decision of the Commission shall subject to any other law be final. (4) For the purposes of this section minimum maintenance services are those services in an undertaken the interruption of which would result in material damage to equipment and machinery and which by agreement should be maintained during strike or lockout. Picketing 171. (1) It is lawful in furtherance of a lawful strike or lockout for any person to be present at or near not less than ten meters away from his or her workplace or former workplace or place of business of the employer or former employer, for the purpose of peacefully communicating information or peacefully persuading any other person not to enter the workplace or place of business, work or deal in or handle the employers product or do

business with the employer. (2) Picketing is unlawful if it is conducted at a place less than ten meters away from the workplace or place of business of the worker, and any person who engages in an unlawful picketing is liable for any damage, loss or injury suffered by any other person as a result of the unlawful picketing.

PART XX MISCELLANEOUS PROVISIONS


Enforcement of orders of the Commission 172. Where any person fails or refuses to comply with a direction or an order issued by the Commission under this Act the Commission shall make an application to the High Court for an order to compel that person to comply with the direction or order. Offences by body of persons 173. (1) Where an offence under this Act is committed by a body of persons, the following provision shall have effect. (a) where the body of persons is a body corporate, every director of that body corporate is deemed to have also committed the offence; (b) where the body of persons is a firm, every partner of that firm is deemed to have also committed the offence; and (c) where the body of persons is a workers union or group of workers, every officer or leader of the union or group of workers is deemed to have committed the offence. (2) A person is not deemed to have committed the offence, if the person proves that the offence was committed without his or her knowledge or that he or she exercised due diligence to prevent the commission of the offence Regulations 174. Subject to the provision of this Act, the Minister may make regulations, (a) for securing the compliance in this country with the provisions of any international convention relating to labour made applicable to Ghana whether before or after the commencement of this Act; (b) relating to sympathy strikes; (c) providing for the conditions and procedure for granting licenses Agencies; (d) relating to the performance of the National Tripartite Committee; (e) on specific measures to be taken by employers to safe-guard the health and safety of their workers; (f) specifying special incentives provided for under section 46 (3); (g) prescribing the fees for licenses granted under paragraph (c); to Private Employers

(h) prescribing the scale of fees chargeable by the Private Employment Agencies; and (i) generally for carrying into effect the provisions of this Act. Interpretation 175. In this Act, unless the context otherwise requires, arbitrator includes a panel of arbitrators; Centre means a Public Employment Centre established under section 2 of this Act; Commission means the National Labour Commission established under section 135 of this Act; contract of employment means a contract of service whether express or implied, and if express whether oral or in writing; District Committee means a District Labour Committee of the Commission; domestic worker means a person who is not a member of the family of a person who employs him or her as househelp employer means any person who employs a worker under a contract of employment; employers organization means any organization of employers established by employers the principal purposes of which are the representation and promotion of employers interests and the regulation f relations between employers and workers and which is registered under section 84 of the Act; essential services includes areas in an establishment where an action could result in a particular or total loss of life or pose a danger to public health and safety and such other services as the Minister may be legislative instrument determine; industrial dispute means any dispute between an employer and one or more workers or between workers and workers which relates to the terms and conditions of employment, the physical condition in which workers are required to work, the employment and nonemployment or termination or suspension of employment of one or more workers and the social and economic interests, of the workers but does not include any matter concerning the interpretation of this Act, a collective agreement or contract of employment or any matter which by agreement between the parties to a collective agreement or contract of employment does not give cause for industrial action or lockout; lockout means the closing of a workplace, the suspension of work by an employer or refusal by an employer to employ or re-engage any number of his or her workers, in consequence of an industrial dispute; manual labour means any work performed by hands or physical

labour; medical practitioner means a medical practitioner registered under the Medical and Dental Decree, 1972 (NRCD 91) or any other law for the time being in force; midwife means a midwife registered under the Nurses and Midwifes Decree, 1972 (NRCD 117) and does not include a Traditional Births Attendants; Minister means the Minister assigned responsibility for Labour person with disability means an individual who, on account of injury, disease or congenital deformity, is substantially handicapped in obtaining or keeping employment or in engaging, in any work on his or her own account, of a kind which apart from that injury, disease or deformity would be suited to his or her age, experience and qualification picketing means the action whereby workers outside a place of work intend to persuade other workers not to enter the place of employment during labour unrest; Private Employment Agency means any body corporate which acts as an intermediary for the purpose of procuring employment for a worker or recruiting a worker for an employer; Regional Committee mean a Regional Labour Committee of the Commission; remuneration includes the basic or minimum wage or salary and any additional emoluments payable directly or indirectly by the employer to the worker on account of the workers employment; repatriation expenses includes subsistence and traveling expenses of the worker and accompanying members of his or her family during the journey to and from the place of employment; and (b) subsistence expenses during the period, if any between the date of expiration of the contract and the date of repatriation; sexual harassment means any unwelcome, offensive or importunate sexual advances or request made by an employer or superior officer or a co-worker, whether the worker is a man or woman; standing joint negotiation committee means a body consisting of representatives of two or more trade unions and one or more trade unions and employers representatives established for purposes of collective bargaining and is authorized by or on behalf of those trade unions and employers representatives to enter into collective agreements on their behalf; strike means any action by two or more workers acting in concert which is intended by them to restrict in any way the service they normally provide to the employer or diminish the output of such service with a view to applying coercive pressure upon the employer and includes sympathy strike and those activities commonly called a work-to-rule, a go slow or a sit down strike; task worker means a person who perform a piece of work for a fee; (a)

trade union means any association of workers the principal purposes of which are to promote and protect their economic and social interests and which is registered under section 84 of this Act and includes a federation of trade unions registered under this Act; undertaking includes the business of any employer worker means a person employed under a contract of employment whether on a continuous, part-time, temporary or casual basis; workplace includes any place where a worker needs to be or to go by reason of his or her work which is under the direct or indirect control of the worker; young person means a person of or above 18 years of age but below 21 years. Modification of existing enactments 176. The provisions of any enactment of relevance to this Act in existence before the coming into force of this Act shall have effect subject to such modifications as are necessary to give effect to this , and to the extent that the provisions of any of such enactment is inconsistent with this Act, the provisions of this Act shall prevail. Repeals and amendment 177. (1) The enactments specified in Schedule III to this Act are repealed. (2) The enactment specified in the first column of Schedule IV to this Act is amended in the manner specified in the second column. Savings and transitional provision 178. (1) Notwithstanding the repeal of the enactments specified in Schedule III, and statutory instrument made under those enactments and in force immediately before the commencement of this Act are continued in force until amended, revoked or otherwise dealt with under this Act. (2). The Trades Union Congress and the trade unions (whether affiliated to the Trade Union Congress or not) which are in existence immediately before the commencement of this Act shall not be required to apply for registration by reason only of the coming into force of this Act. (3). Upon the coming into force of this Act and until the National Tripartite Committee provided for under section 110 is composed, the administrative arrangement in existence on national tripartite committee shall continue to operate. Commencement 179. This Act shall come into force on such date as the Minister shall by Executive Instrument SCHEDULE 1 appoint.

(Section 13) WRITTEN STATEMENT OF PARTICULARS OF CONTRACT OF EMPLOYMENT

1. Name of employer 2. Name of employee 3. Date of first appointment 4. You are employed as (job title or grade) 5. Your rate, method and intervals of pay is 6. Your hours of work are 7. Your periods of holidays and details of holiday pay are 8. The conditions relating to incapacity to work due to sickness or injury and the details of sick pay, if any, are 9. Details of social security or pension scheme 10. Amount of notice to terminate employment to be given by: (a) the employer (b) the worker 11. The disciplinary rules applicable to you are 12. The procedure for dealing with any grievances or dispute is 13. Overtime payment, if any

Date

Signature of employer

Signature of worker SCHEDULE II

(Section 111(1)) FORM OF NOTICE TO EMPLOYER

TO (Name of employer) On behalf of the .. trade union, I request you to deduct from the wages of your employees covered by the certificate issued under section 99 of the Labour Act 2003, ... cedis monthly in discharge of their trade union dues and to pay the amount to such account as may be directed by the Chief Labour Officer. This notice does not apply to wages payable by any employer within 7 days of the receipt of the notice.

(Name) Signature Title of officer

List of members

SCHEDULE III (Section 175 (1))

ENACTMENT REPEALED
The Conspiracy and Protection of Property (Trade Disputes) (Cap 90) The Trade Unions Ordinance (Cap 91) The Trade Unions (Amendment) Ordinance, 1953 (No. 19) The Trade Unions (Amendment) Decree, 1966 (NLCD 110) The Trade Disputes (Arbitration and Inquiry) (Cap 93) The Industrial Relations Act, 1965 (Act 299) The Industrial Relations Act, 1965 (Amendment) Decree, 1967 (NLCD189) The Industrial Relations (Amendment) Decree, 1972 (NRCD 22) The Labour (Amendment) Decree, 1967 (NLCD 212) The Labour (Amendment) Decree, 1969 (NLCD 331) The Labour (Amendment) Decree, 1969 (NLCD 342) The Labour (Amendment) Decree, 1973 (NLCD 368) The Labour (Amendment) Decree, 1976 (NLCD 150) The Labour (Amendment) Decree, 1976 (NLCD 212) The Public Service (Negotiation Committee) Law, 1992 (PNDCL 309) SCHEDULE IV (Section 175 (2))

ENACTMENT AMENDED Column 1 Column 2Enactment How affectedChildrens Act, 1998 (Act 560)Section 93 is amended by the deletion of the words and young person wherever they occur. Section 95 (1) is amended by the deletion of the words and young person Section 124 is amended by the deletion of the definition of young person.

Date of Gazette notification: 10th October, 2003

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