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Supreme Court rubbishes no retrenchment appeal

2022-09-06  Roland Routh

Supreme Court rubbishes no retrenchment appeal

Three judges of the Namibia Supreme Court on Friday declared the controversial Regulation 19 instituted by President Hage Geingob during the national lockdown during the Covid-19 pandemic as unconstitutional.

Deputy Chief Justice Petrus Damaseb, who wrote the judgment in concurrence with Judges of Appeal Sylvester Mainga and Dave Smuts, held that Regulation 19 was “both unreasonable and irrational”.

The regulation made it a criminal offence to unilaterally retrench employees or decrease their remuneration.

The Namibian Employers Federation (NEF), the Namibian Employers Association, Huab Safari Ranches, John Meinert Printing, FP du Toit Transport, Jet X Couriers and Skycore Aviation lodged an urgent application after the promulgation of the regulations to declare it unconstitutional and High Court Judges Shafimana Uitele, Thomas Masuko and Hannelie Prinsloo declared the regulations unconstitutional and set it aside.

The government then lodged an appeal to Supreme Court to set aside the ruling of the High Court.

However, Judge Damaseb, who wrote the unanimous judgment, found that the government downplayed the significance of the suspension regulations, which effectively removed flexibility in the joints of an employer.

“Flexibility, which is so critical if an employer is able to effectively manage and control costs and overheads in a situation of crises,” the judge said and continued: In my view, the significance of the suspension regulations lies elsewhere.

 Ordinarily, absent employee agreement, the employer may act unilaterally under the Labour Act, subject to the Labour Act’s built-in safeguards in favour of an employee.

As such, he said, it was not necessary for the President to introduce further measures.

The sting in the regulations, he said, is that they have effectively given employees veto power.

If he or she does not agree, the employer may not, acting with the expedition, employ the relevant provisions of the Labour Act to save the business as he or she sees fit.

He further said that such circumstances might force employees to just close shop, regardless of the consequences it may have on them, in spite of Regulation 19 requiring them to retain their employees and pay them their usual benefits – and that is on the pain of criminal sanctions if they do not.

Another feature of the impugned regulation that demonstrates an absence of reason is its requirement that transactions already completed before its coming into force be reversed, the judges stated.

According to Damaseb, he sees no legitimate objective in reversing those decisions.

He said that in his opinion, the substantive justification for Regulation 19 is to protect workers’ income during the lockdown and to avoid potential social unrest.

However, the judge reasoned, when everything is considered, what emerges is a politically designed act to protect the income and livelihoods of employees in the face of the lockdown without regard to the ability of the employer – equally weakened by both the impact of the pandemic and the lockdown – to afford the burden passed on to it by a well-intended government policy.

That policy, the judges stated, came on the back of an escape route, which, for all practical purposes, rendered the employer powerless because it hinged on the agreement of the employee, as it eschewed unilateral action by the employer, which would be possible under normal circumstances.

“The policy paid scant regard to the harmful effects it engendered on employers: if an employer is unable to meet its commitments to its employees, it would attract liability in favour of the employee, regardless of its inability to pay. It would also have to reverse and make good to the employee any liability that would arise from reversing completed actions such as retrenchment,” Judge Damaseb stated.   

As such, the judge continued, the policy underpinning Regulation 19 fails to strike a balance fairly and reasonably between the competing interests of employers and employees.

Government was represented by senior advocate Geoff Budlender and Sakeus Akweenda, who were assisted by Sisa Namandje, instructed by the government attorney and the NEF.

 Others were represented by advocates Raymond Heathcote, assisted by Ramon Maasdorp, while the Namibian Employers Association were represented by Eliaser Nekwaya, assisted by Lovisa Ihalwa. -

2022-09-06  Roland Routh

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