3 May 2012

Namibia: End of Labour Hire

LABOUR hire in Namibia has "effectively been banned" with the strict regulations controlling the practice which came into effect recently, the Namibia Employers' Federation (NEF) said yesterday.

The Labour Amendment Act of 2012, which contains the regulations, was gazetted on April 12. At the Workers' Day celebrations in Rundu on Tuesday, President Hifikepunye Pohamba called on the Ministry of Labour and Social Welfare to put the law into operation to give "more protection to Namibian workers".

The new regulations stipulate that when a company uses a casual worker from a labour hire agency, that worker becomes an employee of the company. As such, the worker enjoys the same rights as other employees of the company under the Labour Act, including protection against unfair dismissal and the choice to belong to a trade union.

The act further stipulates that the company has to hire the worker on the same terms and conditions as its other employees. It also introduces a presumption of indefinite employment for any worker, unless the company can justify a fixed term contract.

NEF secretary general Tim Parkhouse yesterday told The Namibian that the new regulations are so strict that it is "hardly worthwhile" for companies to venture into labour-hire.

Parkhouse said the NEF has no problem with the principle behind the amendments as there has been "some abuse by some [labour hire] companies". However, the NEF is disappointed that the changes are so restrictive, he said.

Parkhouse said there is no doubt that the new regulations will lead to casual job losses. The NEF estimates the casual workforce in the country to be as high as 16 000.

Illustrating the impact of the new regulations, Parkhouse said one of the NEF's members had about 80 permanent employees and used to employ up to 150 casual workers on an ad hoc basis. With the amendments becoming law, the company could only employ 50 of its previously casual workforce permanently.

Bennie Buys, general manager of Africa Personnel Services (APS), the biggest labour broking company in Namibia, agreed that the new regulations will spark job losses.

"It certainly can and will have a negative impact for both client companies and brokers operating outside the confines of the law," he said.

However, Elias Manga, president of the National Union of Namibian Workers (NUNW), told The Namibian that the job-loss argument was a "fallacy".

He welcomed the gazzeting of the amendments, saying that the impact on job losses will a "temporary one".

"The jobs people got through labour hire were temporary in any case," he said. Namibia as a nation should rather tackle the unemployment issue to seek a permanent solution, he said.

Buys said the new regulations won't change APS' existing operations much, as it has already put measures in place to comply with the changes, focussing on value-addition to both its employees and clients.

"We have invested heavily in transforming our business to be able to assure a very select clientele of a competitive, sustainable and financially rewarding service," he said.

When Labour and Social Welfare Minister Immanuel Ngatjizeko introduced the amendment bill in Parliament last November, he said it wasn't meant to in any way prevent labour hire companies from doing business.

The Ministry embarked on the amendments after the Supreme Court in December 2009 ruled that Article 128 of the 2007 Labour Act, which banned labour hire, was unconstitutional.

The Labour Resource and Research Institute (LaRRI) found that labour hire workers on average earned between N$3 and N$6 an hour.

Most worked between 37 and 46 hours a week and had very little benefits.

LaRRI also questioned whether labour hire contributed to employment creation, saying "it is hardly a springboard to permanent jobs" and that "labour hire companies seem to utilise widespread unemployment to their own advantage".

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