The Namibian Employers Federation (NEF) charges that a ministry of labour decision to submit a Wage Order to Cabinet for a national minimum wage could have severe employment implications for some workers. 

Cabinet has subsequently endorsed the wage order to introduce a National Minimum Wage (NMW), effective 01 January 2025. According to the wage order, the National Minimum Wage has been set at N$18 per hour, and is subject to review after two years of implementation.

Once implemented, the NMW is expected to help improve wages of the lowest-paid workers; reduce income inequality; improve individual and household income; and achieve a decent standard of living for all. 

However, last week, the NEF stated that the introduction of a National Minimum Wage (NMW) “is received with utter disappointment and extreme frustration”. This is because the NEF feels discussions, subsequent to the release of the report by the Wage Commission, were far from being concluded, and that submissions of the NEF, outlining material concerns, had not been taken into consideration. 

The NEF thus described the decision by labour minister Uutoni Nujoma as “premature and unilateral”. 

“We call for a reversal of the wage order by the minister of labour. There is need for further deliberations, and we would want to see the employers’ submission through the NEF being taken into consideration…Following that, after effective tripartite consultations and negotiations, we would like to see that a bill be drafted and tabled in Parliament, once it has been seen by Cabinet and by the Cabinet Committee for Legislation,” stated NEF president Elia Shikongo.

“One of the very coveted international principles of decision-making about labour matters and industrial relations is the principle of tripartism and social dialogue. The essence of that is that governments, employer organisations and workers’ organisations should collaborate, and be actively involved in shaping policies, legislation and practices that effect the world of work. Sadly, the unilateral decision and announcement by government undermines the highly-valued principle of tripartism enshrined in international labour standards,” Shikongo stated. 

“It does not only relate to the fact that once again the employers’ position has not been sufficiently integrated or, effectively ignored, but the fact is that it will have massive impact on our labour market. This must be prevented,” Shikongo added. The NEF noted that it previously agreed to an introduction of a NMW, in principle, provided it was supported with extensive meaningful consultations and negotiations. 

“The NEF is in support of an hourly minimum wage, with the provision that it should be considered for those employees that were not covered by sectoral minimum wages and employment conditions. In addition, the NEF had proposed there be a scope for exemptions,” read a statement from the federation. 

It added that a NMW, without the consideration of the very large differences between various economic sectors, can have severe repercussions for the labour market. 

“A likely consequence of a blanket introduction of a NMW across industries and areas is further retrenchments due to unaffordability. A blanket NMW across industries does also not take into account the minimum required productivity levels of employees in respective sectors,” the NEF added. 

The federation called for further tripartite deliberations and consultations, in the interest of a stable labour market. 

“Incomplete consultations can lead to less buy-in, with the consequence of the NMW being undermined. Next to possible retrenchments, it can lead to greater informality of the labour market, and also to the displacement of workers by technology,” the NEF stated.  According to a ministerial statement, labour minister Nujoma appointed a Wages Commission on NMW in February 2021 that conducted a nation-wide investigation on all relevant industries.  This commission reported and recommended a NMW to the minister, which will apply to all employees, except to related categories of employees specifically exempted by the minister in a Wage Order, and on related supplementary minimum conditions of employment.

In a statement dated Sunday, 2 June 2024, executive director in the labour ministry Lydia Indombo noted that the introduction of the NMW does not replace the bargaining power as it simply aims to set a floor wage, particularly for lowest-paid employees.