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Questions That Need Answers A while ago, an investment company featured an advertisement on television, where a young man dedicated his life to finding the truth. The advertisement was of course based on the well-known riddle : if you come to a crossroads and you are met by the two guardians of the respective roads, one of whom always tells the truth and the other always tells lies (you do not know which one is which), and you do not know which road to take to reach your desitination, what question would you ask the guardians so as to ensure you take the right road? The answer is : “What would the other guardian say if I asked him?” Whichever guardian you asked you would know that the answer is false, discard it and take the opposite route. We are about to see the end of another year with the new year bringing many opportunities, challenges, happy times and sad times, fortune and misfortune; and the burning question comes to mind. “What will 2006 have in store for me?” We at The Management Advantage Consultancy do not have the answers but we do wish you well and much success, whichever road you choose to take. If, however, the question of who your preferred labour and HR consultant ought to be, the answer should not become a company-wide riddle. Questions Regarding the New Labour Act Quite recently, the Namibian Employers’ Federation as well as the Institute of People Management had a gathering to discuss the progress and/or impact of the soon-to-be implemented new Labour Act. We realise that some of you may not have had the opportunity to attend either of these meetings and hereby wish to provide you with the latest feedback. “It’s elementary, my dear Watson” Holmes would say after having solved a mind-baffling mystery. I would venture to say the same with regard to the implementation of the new Labour Act. For it to be elementary, however, we need to understand the “rules of the game”. Undoubtedly so, one of the burning questions is “what is government doing about the objections raised by the employers” and more specifically, “will the 24 continuous working days annual leave and the five days compassionate leave become law, despite the empirical proof that it is extremely costly to implement”? Before we answer this question, we will attempt to look at the rules of the game and possibly put the debates on these questions into context. Charles Nupen from the ILO office in Pretoria was one of the guest speakers at the NEF meeting and whilst his involvement in the drafting of the new Labour Act was confined to redefining the dispute resolution process, he did give his opinions on other matters as well; as did the Labour Commissioner of Namibia, Mr. Bro-Matthew Shinguadja. From the discussions, comments, remarks, and opinions made at the meeting, it became quite evident that the new Labour Act and its imminent enactment, was seen from two differing angles. Which one is, however, the right one? From the picture below, what do you see? An old woman or a young girl? And yet, are we not looking at the same picture? Are we operating in an economic market (as suggested by the employer) or in a social market (as suggested by the government representative)? STOP PRESS!! During the meeting it was put that any labour act should create a forum where the employer and employee should determine their own conditions of employment through consultation and negotiation rather than the law imposing conditions of employment, which may be detrimental to the economy. To this, Charles Nupen said that self-governance on conditions of employment would be nice, if the capacity exists to do so. In the Namibian context, it was implied, this capacity does not exist. Hence the need for setting minimum standards for conditions of employment. Whether they were appropriate, he did not want to elude to. The Labour Commissioner added to this that the basic conditions of employment as set out in the new Labour Act were based on relevant, basic human rights and that these were set from the view of an employee who does not have the capacity to negotiate his/her terms of employment. Further, whether the basic conditions of employment under the new Act have been improved rather than maintained is debatable; especially where these minimum conditions were set with social justice, rather than economic justice in mind, the Labour Commissioner explained. In light of the above statements, consider the fact that The Public Servant’s Act provides for 26 working days annual leave (and there are an estimated 75 000 public servants), all of the major para-statals (NamPower, NamWater, etc) already provide for more than 24 working days annual leave as would the most of the smaller para-statals (but in the latter part I am talking under correction), some mines, if not all in the mining industry already provide in excess of 24 working days annual leave (and they employ a major portion of the Namibian work force), and then some more. It could be that close to half of the Namibian workforce is already getting more than the current minimum annual leave days. Indications are that annual leave entitlement will be based on the employee receiving four weeks annual leave (For 5-day a week employees this amounts to 20 days, for 6-day a week employees this amounts to 24 days, etc.) I fully agree that the smaller employer in the private sector, who may employ maybe 30% of the workforce, will not be able to match the conditions of employment as offered above and yet, it is this very same employer who is encouraged to create jobs, produce more effectively and efficiently, and is struggling to remain competitive in a global market. Which of the two roads will be followed we cannot predict; but I am sure that the NEF will continue to put pressure on the government to rethink their position and that the government will try to please all parties to the debate. Our advice would be to budget for the additional annual leave and compassionate leave days in any event. STOP PRESS! A further question that comes to mind is “when will the Act be enacted”? Initially the dates were August 1, 2005, then October 1, 2005 and the envisaged date for enactment has now been identified as March 1, 2006. We also know that there is much political pressure to have the Act enacted and the Labour Commissioner had indicated that the action plans to meet the due date, are still on track. He did, however, say so “with caution”. Indications are that the date of full enactment is to be July 1, 2006. In the meantime, however, some parts of the Act will be enacted as was evident with the gazetting of the administrative section of the Act, which apply to the establishment of Labour Institutions and in particular, the Committees on Dispute Resolution and Essential Services. Our advice in this regard would be to say that the date of enactment is less important than the need to prepare for the eventual date of enactment. Whilst legal debates and economic calculations will continue, the time is now for the employer to become involved. The new Act provides for labour institutions (Essential Services Committee, Dispute Prevention and Resolution Committee, Wages Commission, etc.) that require the involvement and input of the employer, the employee, and the government. The employer must become involved in shaping and influencing the committees by direct participation. The new Act provides for a world-class mechanism for employer-employee dispute resolution. The first prize, however, would still be to stay away from such mechanism. To this end the employer must become involved in training the managers and supervisors to deal with disciplinary enquiries and negotiations with the employees in an effective manner. The new Act provides for new definitions (employee, remuneration, etc.) and the employer must become involved ensuring that contracts of employment comply with the new statutory requirements The new Act gives special powers to the conciliators and arbitrators and the employer needs to become involved in understanding what the consequences could be by not participating in a dispute or negotiating in bad faith. The new Act provides for the concept of “unfair employment practices” and the employer needs to become involved in understanding what these are and whether it can face a charge of unfair employment practices, e.g. failure to disclose relevant information, child or forced labour, etc. The time has now arrived to put in place a system of good people management and once this is in place, it will be easier to negotiate your way should you have taken the wrong road. For this newsletter, one final question that needs to be considered is “what will the cost implications of the new Act be?” We suppose that you would get different answers to this question, depending on whom you ask. We look at it from a direct and indirect costing angle. Direct costs would be
The clause regarding the payment of outstanding leave on termination; will be amended as part of the 'cleaning' of the Act "...to provide for payment of accrued unused leave benefits upon termination on a pro rata basis with the same approach as in the 1992 Act". Indirect costs could be endless, but may also be subjectively calculated. These costs are normally associated with those under the water line in the ice berg analogy and could include the following :
When you know the rules of the game, it’s elementary. A Gentle Word on Behalf of The MACWhen you need help in putting in place a system of good people management, developing your managers and supervisors skills in the interpretation of the labour laws and understanding the rules, conducting disciplinary and appeal enquiries, planning the content and context of information disclosure, etc. give us a call.
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