Screws tighten on labour hire

CABINET has endorsed a decision to tighten the screws on the labour-hire system in Namibia through a range of amendments to the Labour Act of 2007.

Labour hire in Namibia was banned in its entirety in the 2007 Labour Act. However, the Act’s section 128, through which labour hire was outlawed in Namibia, did not survive a challenge to its constitutionality late last year.In a unanimous decision, five judges of the Supreme Court struck down section 128 as unconstitutional on December 14 last year. While ruling that the outright ban on labour hire was ‘disproportionately severe compared to what is necessary in a democratic society’, the court also expressly left open options for labour hire to be regulated instead.In the wake of the court’s ruling, Cabinet has now decided that the Labour Act should be amended to eliminate exploitative aspects of the labour-hire system, the Ministry of Information announced on Friday. The Cabinet’s decision to endorse amendments to the Labour Act was taken at its first meeting for the year, on January 26, it was announced.In the media statement issued by the Ministry, it is stated: ‘To address the problems inherent in the labour-hire system, the Constitution will have to be amended to authorise the banning of labour hire or, alternatively, stringent new legislation must be enacted to eliminate the exploitative aspects of the system.’New legislation appears to be the practical solution to the problem in the short term, the Ministry stated.The Minister of Labour and Social Welfare, Immanuel Ngatjizeko, declared after the Supreme Court’s ruling that Government would not allow the labour-hire system to continue to exist in its current form in Namibia.In terms of the Cabinet decision, the Labour Act should be changed to enforce equal pay for labour-hire employees and permanent employees doing the same sort of work. Labour-hire employees should also be entitled to the same fringe benefits as permanent employees.A second envisaged change to the law will entitle labour-hire employees to written employment contracts that are signed by both the labour-hire company that the employees are attached to and the user company to which the labour-hire company provides the employees to perform work.The Labour Act will further be changed to prohibit the use of labour hire during strikes or lockouts in which non-labour-hire employees have been retrenched, it was announced.The intended amendments to the Act must also clarify the position of seasonal and temporary employees, the Cabinet decided.It further decided that with the change in the law labour hire must be properly defined to apply only to employees in the labour-hire system and not to bona fide subcontractors and independent contractors as well.The changes to the Labour Act that have been endorsed by Cabinet appear to be in line with alternatives to an outright ban on labour hire that were also discussed in the Supreme Court’s judgement of December 14.The court noted that the International Labour Organisation, which is recognised in Namibia’s Constitution, in its Private Employment Agencies Convention of 1997 and Private Employment Agencies Recommendation of 1997 urged the regulation of labour hire – or ‘agency work’, as the court termed it – and not the prohibition of it.Among the recommendations of the ILO are that labour-hire companies should have written employment contracts with labour-hire employees, that labour-hire employees should not be made available to replace workers on strike, and that labour-hire companies may not prevent their clients from employing labour-hire employees as permanent employees, the court noted.The court also pointed out that several countries – such as Australia, France, Italy, the Netherlands, Portugal and Spain – have laws guaranteeing pay parity for labour-hire employees and similar permanent employees working in the same host organisation.In several countries concerns over the use of labour-hire company services have also been addressed by laws specifying the permissible length of agency work contracts, restrictions on the purposes for which labour-hire employees may be engaged, and ensuring labour-hire employees the right to trade union membership and representation.In regulating labour hire, some categories of workers – such as skilled and highly-paid professions, in which employees generally have more bargaining power – can be excluded from a regulatory framework, while unskilled workers, who are more vulnerable to exploitation and constrained by economic necessity to work, would be more in need of protection under regulation of the labour-hire system, the court further reasoned.The court also indicated that it would be permissible to prohibit the replacement of full-time employees with labour-hire employees on a permanent basis. It stated: ‘Agency work may be prohibited in sectors where it will lead to the replacement of permanent employees, unless required to temporarily replace permanent employees on maternity, sick, compassionate or annual leave or until a candidate has been found to fill a vacancy occasioned by resignation.’The court also reasoned that if it is properly regulated within the scope of the Constitution and the ILO’s Private Employment Agencies Convention, labour-hire work ‘would typically be temporary of nature; pose no real threat to standard employment relationships or unionisation and greatly contribute to flexibility in the labour market. It will enhance opportunities for the transition from education to work by workers entering the market for the first time and facilitate the shift from agency work to full-time employment.’

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