Vanuatu Labor Law: Comprehensive and Updated Guide

Published on October 30, 2025 and written by Cyril Jarnias

Vanuatu, a tropical archipelago in the South Pacific, is a developing country striving to reconcile its ancestral traditions with the demands of the modern world. This duality is reflected in its labor law, which attempts to balance customary practices with international standards. Let’s delve into the specifics of Vanuatu’s labor law, an ever-evolving field that shapes professional relationships in this island paradise.

Employment Contracts: The Cornerstone of Professional Relationships

In Vanuatu, employment contracts are governed by the Employment Act of 1983, which forms the legal basis for relationships between employers and employees. This law provides for two main types of contracts: fixed-term contracts and indefinite-term contracts. Fixed-term contracts are typically used for specific projects or seasonal jobs, while indefinite-term contracts are the standard for permanent positions.

The particularity of Vanuatu law lies in its flexibility. Indeed, contracts can be concluded orally or in writing, although the written form is strongly recommended to avoid any disputes. This flexibility reflects the country’s traditional oral culture while adapting to modern requirements for legal security.

An important aspect to note is the obligation for employers to include certain essential clauses in contracts, such as:

• Job description and tasks to be performed
• Salary amount and payment frequency
• Work schedules
• Duration of the probation period (generally a maximum of 3 months)
• Contract termination conditions

Social Obligations: A Developing System

The social security system in Vanuatu is still in the development phase, but significant progress has been made in recent years. The Vanuatu National Provident Fund (VNPF) is the central institution responsible for managing social contributions and retirement benefits.

Employers are required to contribute to the VNPF at a rate of 4% of their employees’ salaries, while employees also contribute at a rate of 4%. These contributions mainly cover retirement benefits, but the Vanuatu government is currently working to expand social coverage to include health insurance and other benefits.

Regarding leave, Vanuatu legislation provides for:

• 21 days of paid annual leave
• 21 days of paid sick leave
• 12 weeks of maternity leave (including 6 weeks mandatory after childbirth)

It is important to note that Vanuatu has not yet established an unemployment insurance system. This absence reflects both the country’s economic challenges and the traditional structure of Vanuatu society, where the extended family often plays a role as a social safety net.

Minimum Wage: A Tool for Worker Protection

Vanuatu has established a national minimum wage to protect workers from exploitation and ensure a decent standard of living. Since January 1, 2022, the minimum wage in Vanuatu has been set at 220 vatu per hour, equivalent to approximately US$1.90. This amount is regularly reviewed by the government in consultation with social partners to account for changes in the cost of living.

It is important to note that this minimum wage applies to all sectors of activity, with the exception of certain jobs in agriculture and fishing that may benefit from exemptions. This uniformity aims to reduce inequalities between different economic sectors.

However, the enforcement of the minimum wage remains a challenge, particularly in rural areas and in the informal economy. The Vanuatu government, aware of these difficulties, has strengthened controls and sanctions for employers who do not comply with this legal obligation.

Average Wages: A Reflection of the Local Economy

Average wages in Vanuatu vary considerably depending on the sector of activity and the skill level of employees. According to data from the Vanuatu National Statistics Office, the average monthly salary in the formal sector was approximately 45,000 vatu (about US$390) in 2024.

However, there are significant disparities between different sectors:

• The public sector generally offers higher salaries, with an average of approximately 60,000 vatu per month
• The tourism sector, a pillar of the Vanuatu economy, offers average salaries around 50,000 vatu per month
• Agriculture, which employs a large portion of the population, has lower average salaries, around 30,000 vatu per month

It is important to note that these figures do not account for the informal economy, which plays a significant role in the country. Many ni-Vanuatu combine formal employment with traditional activities like subsistence farming or fishing, which supplements their income.

Salary Skills: An Evolving Labor Market

The labor market in Vanuatu is evolving rapidly, with growing demand for specific skills. The tourism, information technology, and finance sectors are particularly dynamic and offer interesting opportunities for skilled workers.

In the tourism sector, language skills, particularly in English and French (the country’s two official languages), are highly sought after and can justify higher salaries. Management positions in hospitality can reach salaries of 100,000 to 150,000 vatu per month.

The information technology sector, although still emerging, offers promising prospects. Web developers and cybersecurity specialists are particularly in demand, with salaries that can exceed 200,000 vatu per month for the most experienced profiles.

In the financial field, qualified accountants and compliance experts are highly sought after, particularly due to the development of the offshore sector in Vanuatu. These professionals can expect salaries ranging from 80,000 to 150,000 vatu per month, depending on their experience and qualifications.

It is important to note that the Vanuatu government actively encourages the development of local skills through vocational training programs and partnerships with foreign educational institutions. This policy aims to reduce dependence on expatriate workers and create opportunities for the local population.

Unions: Actors Seeking Recognition

The union movement in Vanuatu is relatively young and still developing. The Constitution of Vanuatu guarantees freedom of association, including the right to form and join unions. However, the practical implementation of this right remains a challenge in many sectors.

The main union in the country is the Vanuatu National Workers Union (VNWU), which represents workers from various sectors, including the public sector, hospitality, and transportation. The VNWU plays an important role in collective bargaining and in defending workers’ rights.

Despite these advances, the union movement in Vanuatu faces several obstacles:

• The fragmentation of the labor market, with a large portion of the workforce in the informal economy
• Lack of resources and training for union representatives
• Reluctance of some employers to recognize unions

The Vanuatu government, aware of the importance of social dialogue for economic development, has taken measures to strengthen the role of unions. For example, the creation of the Vanuatu Tripartite Labour Advisory Council in 2019 institutionalized dialogue between the government, employers, and unions on labor-related issues.

Workers’ Rights: Between Legal Protection and Practical Challenges

The legal framework in Vanuatu offers significant protection for workers’ rights, although its practical application can sometimes pose challenges. The Employment Act of 1983, supplemented by various subsequent regulations, forms the foundation of worker rights protection in the country.

Among the fundamental rights guaranteed by law are:

• Protection against discrimination based on gender, race, religion, or ethnic origin
• Prohibition of forced labor
• Limitation of working hours to 44 hours per week, with provisions for overtime
• Right to a safe and healthy work environment
• Protection against wrongful dismissal

Regarding occupational health and safety, Vanuatu adopted a new law in 2017 strengthening employers’ obligations. This law notably requires the establishment of safety committees in companies with more than 20 employees and obliges employers to provide personal protective equipment.

Despite these legal protections, the effective enforcement of workers’ rights remains a challenge, particularly in rural areas and in the informal economy. The Vanuatu government has strengthened labor inspections in recent years, but lack of resources sometimes limits the effectiveness of these controls.

A positive aspect to note is Vanuatu’s growing commitment to international labor standards. The country has ratified several fundamental conventions of the International Labour Organization (ILO), demonstrating its willingness to align its practices with international standards.

Conclusion: An Evolving Labor Law

Labor law in Vanuatu reflects the duality of a country in transition, seeking to reconcile its traditions with the demands of a modern economy. Although significant progress has been made in protecting workers and developing social dialogue, challenges persist, particularly in the effective enforcement of laws and coverage of workers in the informal economy.

Employers and potential investors must be aware of these specificities and ongoing developments. Respect for local labor law is not only a legal obligation but also a key factor for the long-term success of businesses operating in Vanuatu.

As the country continues to develop and integrate into the global economy, its labor law is likely to undergo further evolution to adapt to the changing realities of the labor market and international standards. Staying informed of these changes will be crucial for any company wishing to establish or expand in Vanuatu.