Govt, 120 employers in legal stalemate over Covid-19

By Hilary Mare

AT least 120 employers are taking government to court to challenge some of the labour directives that have amended the Labour Act in response to the global Covid-19 pandemic amid claims that the emergency regulations have left some companies in dire straits and facing imminent bankruptcy.

The secretary-general of the Namibia Employers Federation, Daan Strauss, told Confidente this week that although employers through the NEF had set out a legal opinion in a letter to Judge President Justice Damaseb of the High Court seeking a mediated approach to the matter involving a government attorney, the process hit a brick wall when the response was not mutually agreed.

In the same letter, penned by Köpplinger Boltman legal practitioners on behalf of both the Namibia Employers Association (NEA) and NEF, they argued that the amendments to the Labour Act during the state of emergency were unconstitutional, null and void, and in their view, of no force.

As a result, the aggrieved company owners are proceeding with an application to the High Court this week to compel government to set aside some of the labour directives that have left employers on a tight-rope, Strauss revealed.

“The legal team is working hard to complete all the affidavits. As you know, we are not an actual employer but a representative of the employers so we had to get actual employers who run the risk of suffering irreparable damage,” he said. Their argument is that some companies simply cannot afford to operate without options such as pay-cuts, no-work no-pay, and even retrenchments.

“Many of the businesses will actually close down, just like what is happening in South Africa. The economic relief packages that have been promised have to some extent not become a reality. The offer for the wage assistance will also not protect the employers enough, considering now that the labour directives are making it hard to adjust.”

Apart from banning retrenchments, other directives the NEF says are stifling employers include the order that for wages and salaries to be reduced representative trade unions’ and/or employees’ consent will be needed in writing. It is also prohibited to reduce employee compensation if they work a full day – whether at the office or at home.

The new directives also prohibit a reduction of more than 50 percent in employees’ pay. Any reduction in benefits must, by law, be reflected by a reduction in working hours.

Strauss also acknowledged that some employers had gone their own way and acted against government directives, which he acknowledges is not the thing to do.

A representative of NEA, Henry Brewer, confirmed news of the imminent legal challenge to the government’s labour directives, telling Confidente that the Association was addressing the issue on behalf of the members. “As soon as papers are served, the media will be notified, he said.

A strongly worded letter to Damaseb seen by Confidente argued that a number of the proclamations issued by President Hage Geingob created crimes, which did not exist at the time certain labour-related steps were taken by employers.

“Our clients (employers) face a dilemma. They should either adhere to the law (and go insolvent thereby, with the effect that the entire workforce loses their jobs) or ignore the law based on our advice that the provisions are null and void – with its concomitant volatile consequences well known in the labour market. Our clients have given us instructions to approach the High Court on an urgent basis for the necessary urgent relief.

“The matter is not only of interest for our clients but may have a ripple effect on the already struggling Namibian economy. The next pay day – should some of our clients be compelled to retain their entire workforce against their better business acumen and be forced to pay those they are forced to retain under pain of criminal penalties – will be the end of May 2020,” they noted.

Labour Commissioner Bro-Matthew Shinguandja told Confidente this week that government was aware of the employers’ intention to lodge a legal challenge, saying they had a received a letter to that effect and had pushed it to the government attorneys.

“When they say the regulations are unfair, is it fair for them to send workers home without discussion… without talking to them first? Is it fair to force workers to take unpaid leave? We believe the regulations and measures are legal and we are ready to defend them in court.

“The measures were first sent to us as directive and we discussed with the employers’ federation and two workers’ unions and it was agreed to, so for them to now backtrack, we feel like it’s a betrayal and we demand to know why,” he said.

Labour researcher and chairman of the Economic and Social Justice Trust (ESJT) Herbert Jauch was recently cited, saying that a key issue during the coronavirus-induced economic crisis is to “ensure survival”.

“There is no doubt that the economic consequences will be severe, but unlike during the global financial and economic crisis of 2008, the focus this time has to be on household support and not on bailing out corporations,” Jauch told a local daily.

“Employers should be required to continue paying their staff and in cases where they are financially unable to do so, they must provide proof to government as a precondition to be assisted through tax exemptions, etc. A particular focus will have to be on small and medium-size enterprises who will face the greatest challenges in maintaining and paying workers,” Jauch argued.