Windhoek — The Construction Industries Federation of Namibia (CIF) and the Metal and Allied Namibian Workers Union (MANWU) have signed a new collective agreement on wages.
The agreement includes the planned increase in minimum wage payable in the industry, which will be 5.6 percent for selected job categories in the construction sector.
At this stage it is not clear when the increase on the minimum wage payable will become effective.
CIF has requested the Minister of Labour, Industrial Relations and Employment Creation, Erkki Nghimtina, to promulgate the extension of the collective agreement in order to implement the increase of the new minimum wage and the minimum employment conditions that will apply to the entire construction sector.
Because the collective agreement becomes effective on the date of promulgation, the date when the increase of minimum wages becomes payable, is not set yet.
The duration of the process; i.e. from the signing of the collective agreement to the date of promulgation normally takes some time.
However, the parties to the agreement anticipate that the increase in the minimum wage payable will come into force during the first quarter of 2018.
Until that time, the currently gazetted minimum wage payable and minimum employment conditions as per Government Notice No.319 published in Government Gazette No. 5917 of 31 December 2015 will remain applicable; that means a minimum wage of 16.04 per hour.
However, with an agreed future increase of 5.6 percent on minimum wage payable the CIF and Manwu resolved the deadlock in negotiations.
The CIF, representing employers in the construction sector, was not in a position to agree to the demands of the union.
It took the position that the entire sector would be affected if subjected to an unreasonably high increase in the minimum wage.
Manwu's original demand was for an increase of 15 percent in the minimum wage.
Moreover, the CIF said additional demands for minimum employment conditions meant that the overall demand constituted an increase of over 70 percent.
The construction sector had been hit severely by the economic downturn and since September 2016, has seen large-scale retrenchment in the entire supply chain; close to 47 percent of employees in the industry have lost their jobs.
The CIF maintained the position that instead of hiking up the increase of only a few remaining employees that one needed to make every effort to keep as many persons employed as possible.
A drastic increase would have meant that construction companies would have needed to retrench even more employees, as they would not have been in the position to afford the increase.
After engaging its members, the members provided the CIF with a revised mandate. This provided the CIF the scope to increase their offer.
Taking into consideration the current economic climate, both parties to the negotiations felt it was important to reach an agreement in order to avoid industrial action; i.e. either a strike or indeed a lockout by the employers.
Thus they reached an agreement regarding a future increase of 5.6 percent minimum wage payable.
The terms of the agreement, which comes into effect only after promulgation of the collective agreement, covers a one-year period; i.e. 2018/2019.
Bärbel Kirchner, consulting general manager of the CIF said: "It is known how badly the construction sector was hit over the last 12 months. Many businesses in our industry needed to make large-scale retrenchments.
"A large part of our industry has come to a standstill. Some businesses either faced bankruptcy, some are dormant and others closed down. Yet, some employers, that are financially strong enough, kept their teams employed with the hope of work and projects in the near future.
"We are aware that an increase of minimum wage payable unfortunately still means that more persons will be retrenched if there is not an immediate upturn.
"However, we are hopeful and optimistic that government's commitment to pay outstanding invoices will increase the cash flow and also that Government's announcement of a Construction Fund with the Namibia Development Bank will indeed materialise," Kirchner added.