• September 26th, 2018
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Tough Wage Negotiations Ahead

By Wezi Tjaronda WINDHOEK Although the labour situation in Namibia is calm, the rise in the cost of living may put pressure on wage negotiations this year, commentators have said. Following President Hifikepunye Pohamba's recent concern about labour unrests in the country, where he urged the National Union of Namibia Workers to improve the labour relations, New Era approached experts on the issue. With the overall increase in international food prices arising from emerging markets, drought spells and conversion of crops into biofuels, the Bank of Namibia last month said food inflation would remain high at least for the first half of the year. This, according to Labour Research and Resource Institute's Herbert Jauch, would put pressure on struggling households, which could result in higher wage demands. "Unions are under pressure to ensure that their members are not poorer," said Jauch in an interview recently. Economist and Chief Executive Officer of the Rand Merchant Bank, Martin Mwinga, said because of the higher cost of living, workers on the one hand would demand higher salary adjustments. But on the other hand, employers would find it difficult to agree, leading to disputes, which would lead to work stoppages, production disruptions and a rise in the cost to the employer. "So the unrest would cause production and GDP to contract, eventually leading to high unemployment," said Mwinga. These would also lead to rising inflation due to supply shortages. Apart from the Unam and NBC cases that were resolved after the parties reached a wage agreement recently, labour unrest cases remain isolated. "We are reasonably calm and the NEF wants to keep it that way," said Tim Parkhouse, Secretary General of the Namibia Employers Federation (NEF). According to Jauch, labour unrests are caused by a number of factors including poor labour relations at several companies, poor ways of collective bargaining and lack of transparency. He also agreed that strikes were not unusually high in Namibia compared to international standards, to which workers resorted to in the absence of any other way of reaching an agreement. He said in some instances, companies overplayed their hand by entering negotiations with an attitude that there would be no pay increase, which already set the stage for a strike. In other cases, Jauch said employers did not openly share information on their financial books with the unions during bargaining. Although strikes result in loss of income on workers and productivity on companies, they seem to lead to agreements fairly quickly, looking at the Unam situation, which saw the parties reach agreements even before the strike was effected. In the case of the NBC, an agreement was reached fairly quickly after a crippling strike. Strikes result in loss of income to workers and loss of productivity on companies, which could be avoided if companies negotiated in good faith, such as opening financial books and keeping promises that are made. "If a company says there is no money for a pay rise, they should be able to prove that there is no money," said Jauch. Apart from loss of productivity and unemployment, labour unrest situations also undermine the investment climate. Mwinga said no investor was prepared to invest their money in a country with too many labour unrests. "Investors want a stable and certain environment. The increase in labour unrest would therefore scare off investment," Mwinga said. However, Parkhouse said Namibia's main problem was absenteeism and productivity. "Namibians need to establish work ethics before expecting more pay," he said, adding: "If you increase salaries without increasing productivity, the cost of products rises." One way of improving productivity would be for workers and management to work smarter than they sometimes do. "We need to look at ways of becoming more effective. If we are paid to work eight hours then we should work eight hours," said Parkhouse. Although this should be the case, the trend is that people report late for work and leave early.
2008-02-27 00:00:00 10 years ago
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