Reason returns to construction minimum wages. Union and Federation agree on 5.6%
After demanding minimum wage increases in the construction industry that would have equalled a 70% rise, the union has now settled for a 5.6% increase but the implementation date has not been set.
On Thursday the Construction Industries Federation of Namibia announced it has signed a Collective Agreement with the Metal and Allied Namibian Workers Union which includes the future increase in minimum wage. The increase has been agreed on 5.6% for selected job categories but will only become effective once the labour minister has promulgated the extension to the Collective Agreement.
“As the Collective Agreement becomes effective on the date of promulgation, the date of increase of minimum wages payable, is not determined as of yet,” the Federation stated.
“The duration of the process; i.e. from the signing of the Collective Agreement to the date of promulgation normally takes some time. It can be anticipated that the increase 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” the Federation advised.
According to the Federation, the deadlock between the negotiating parties is resolved. Earlier this year when the union demand a flat 15% increase on minimum wage, and further increases constituting a combined 70% raise, the industry baulked and negations between the Construction Industries Federation and the union came to a standstill.
According to the Federation, the construction sector has been hit severely by the economic downturn and since September 2016 has seen large-scale retrenchment in the entire supply chain with close to 47% of employees having lost their jobs.
The Federation said it maintained the position that instead of hiking up the increase of only a few remaining employees, as many as possible jobs must be saved pointing out the irony that an irrational minimum wage increase will only destroy more jobs.
The Federation’s consulting General Manager, Bärbel Kirchner 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.”