Minimum Wage Increase in Namibian Construction Sector Becomes Law

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The minimum wage payable in the construction industry of N$17.38 per hour is now applicable and mandatory for everyone operating in the sector, after the collective agreement between the Construction Industries Federation (CIF) and the Metal and Allied Namibian Workers Union (MANWU) became law on 2 November.

The two parties earlier this year reached an agreement on the increase of minimum wage payable in the construction industry to N$17.38 per hour, from the current N$16.94 per hour.

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Other benefits for employees in the sector, as per the employment categories listed in the collective agreement, include a service allowance equal to 150 hours of his or her wage, which is to be paid as part of the December remuneration before the commencement of annual leave during December.

Bärbel Kirchner, general manager of the CIF said the increase is within reason considering the current economic environment.

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“It would simply make no sense to increase the minimum wage payable beyond the negotiated level if employers cannot longer afford an increase. There is a fine line to consider, where an increase can improve the livelihood of one, yet might lead to the retrenchment of another. From the CIF’s perspective, we feel, that at current times, we need to ensure that as many persons possible remain employed. Therefore we think that since there had been no increase since 2018, that a 2.6% increase, is reasonable,” Kirchner said.

She further said conditions for both the employer and the employee will improve once the industry has been regulated through the establishment of a construction council.

Justina Jonas-Emvula, secretary-general of MANWU said the limitation of not awarding projects to local contractors is increasing high unemployment and precarious work in the sector.

“We therefore calling all contractors and their employees to collectively work together, we understand the frustration of lack of jobs or jobs which are not sustainable, but this increase will make a difference, while we are busy to engage those in power to start prioritising local contractors and the immediate implementation of the Construction Council,” Jonas-Emvula said.

Furthermore, it is mandatory that all employees, for whom minimum wages payable are prescribed as per the agreement, are registered by the employer with the Namibian Building Workers Pension Fund (NBWPF). Alternatively, employers can offer pension and retirement benefits that provide for the same as the NBWPF, or indeed better benefits.

Read the original article on Namibia Economist.

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