Labour Act will be tweaked further

THE Ministry of Labour is expected to make a number of changes to the new Labour Act before it fully comes into operation next year, following fierce lobbying by the Namibia Employers Federation (NEF) for amendments.

A major change that will be made is to afford all workers annual leave totalling four working weeks, taking into account the number of days they normally work per week. The current law provides for a minimum of 24 consecutive days of leave, which affected calculations of whether weekends should be included or not, while the new law prescribes annual leave of 24 consecutive working days.The NEF has argued that the new provision would have different consequences for employees who work either more or less than the standard five days a week.Last week, the Minister of Labour Alpheus !Naruseb said Government attached primary importance to the tripartite discussions in policy formulation, but that ultimately the responsibility for policy and the well-being of the nation rested with Government.The first parts of the new law, which would establish the Committee on Dispute Prevention and Resolution and the Committee on Essential Services, came into effect last week.Before the bill was passed a year ago, the NEF said it feared the economic consequences of certain new provisions, especially those relating to more annual and compassionate leave and improved maternity leave benefits.The Namibia Policy Research Unit (Nepru) was enlisted by the NEF to investigate the economic consequences of the proposed changes.The first provisions of the new Labour Act came in to effect last week.Government hopes to repeal the old law in its entirety by July next year.Government also plans to redraft a provision on the payment of outstanding leave upon resignation or retrenchment, changing it back to the way it was in the Labour Act of 1992.The NEF raised alarm that the new provision would either result in a significant increase in sick payments to workers or a decrease in payments, depending on how the formula in the new Act was interpreted.NEF Secretary General Tim Parkhouse told The Namibian on Friday that he was pleased that some of their proposals were being accepted, but that the NEF would only meet this week to study the Government’s responses to their complaints.But he said the changes to the annual leave provision and the payment of outstanding leave upon resignation or retrenchment would already have a big impact on employers.Smaller technical changes to the new law are also being considered which, as they currently stand, could give rise to different interpretations.In his response to the NEF, !Naruseb said the Labour Ministry was not convinced by Nepru’s calculations of the extent to which the new labour law will affect productivity.Government argues that civil servants already receive 24 working days’ leave a year, and that other employers also provide better leave benefits than the minimum required by the Labour Act.Further, in practice it is unlikely that all employees will take their leave in consecutive working days.However, Government does not plan to reduce or withdraw a new provision entitling employees to a minimum of 5 days’ compassionate leave, although it was not discussed by the Labour Advisory Council before being included in the new act.Nepru has estimated that this new provision could result in a loss of production equivalent to 0,9 per cent of Gross Domestic Product.In response to this, Government said this calculation was “grossly exaggerated” and that the inclusion of this additional leave was in line with Namibia as a human African society and the unfortunate reality the nation finds itself in.Already public servants have a 10-day compassionate leave benefit and some employers in the private sector also grant compassionate leave.Although the cost to the Social Security Commission has not yet been determined, Government is sticking to a new provision that will entitle women on maternity leave to receive their full salary from their employer during this time.Employers will be able to claim the basic wage from the SSC, but will have to foot the costs of the benefits.The current law provides for a minimum of 24 consecutive days of leave, which affected calculations of whether weekends should be included or not, while the new law prescribes annual leave of 24 consecutive working days.The NEF has argued that the new provision would have different consequences for employees who work either more or less than the standard five days a week.Last week, the Minister of Labour Alpheus !Naruseb said Government attached primary importance to the tripartite discussions in policy formulation, but that ultimately the responsibility for policy and the well-being of the nation rested with Government.The first parts of the new law, which would establish the Committee on Dispute Prevention and Resolution and the Committee on Essential Services, came into effect last week.Before the bill was passed a year ago, the NEF said it feared the economic consequences of certain new provisions, especially those relating to more annual and compassionate leave and improved maternity leave benefits.The Namibia Policy Research Unit (Nepru) was enlisted by the NEF to investigate the economic consequences of the proposed changes.The first provisions of the new Labour Act came in to effect last week.Government hopes to repeal the old law in its entirety by July next year.Government also plans to redraft a provision on the payment of outstanding leave upon resignation or retrenchment, changing it back to the way it was in the Labour Act of 1992.The NEF raised alarm that the new provision would either result in a significant increase in sick payments to workers or a decrease in payments, depending on how the formula in the new Act was interpreted.NEF Secretary General Tim Parkhouse told The Namibian on Friday that he was pleased that some of their proposals were being accepted, but that the NEF would only meet this week to study the Government’s responses to their complaints.But he said the changes to the annual leave provision and the payment of outstanding leave upon resignation or retrenchment would already have a big impact on employers.Smaller technical changes to the new law are also being considered which, as they currently stand, could give rise to different interpretations.In his response to the NEF, !Naruseb said the Labour Ministry was not convinced by Nepru’s calculations of the extent to which the new labour law will affect productivity.Government argues that civil servants already receive 24 working days’ leave a year, and that other employers also provide better leave benefits than the minimum required by the Labour Act.Further, in practice it is unlikely that all employees will take their leave in consecutive working days.However, Government does not plan to reduce or withdraw a new provision entitling employees to a minimum of 5 days’ compassionate leave, although it was not discussed by the Labour Advisory Council before being included in the new act.Nepru has estimated that this new provision could result in a loss of production equivalent to 0,9 per cent of Gross Domestic Product.In response to this, Government said this calculation was “grossly exaggerated” and that the inclusion of this additional leave was in line with Namibia as a human African society and the unfortunate reality the nation finds itself in.Already public servants have a 10-day compassionate leave benefit and some employers in the private sector also grant compassionate leave.Although the cost to the Social Security Commission has not yet been determined, Government is sticking to a new provision that will entitle women on maternity leave to receive their full salary from their employer during this time.Employers will be able to claim the basic wage from the SSC, but will have to foot the costs of the benefits.