Namibian Supreme Court Rules Independently, Finds Labor Law

UNCLAS SECTION 01 OF 03 WINDHOEK 000468 SENSITIVE SIPDIS FOR AF/S PHAEDRA GWYN AND MAYA HARRIS E.O. 12958: N/A TAGS: ELAB PGOV WA SUBJECT: Namibian Supreme Court Rules Independently, Finds Labor Law Provision Unconstitutional REF: 08 WINDHOEK 302; 09 WINDHOEK 453 -------------- Summary -------------- ¶1. (SBU) On December 14, the Namibian Supreme Court unanimously ruled as unconstitutional a provision of the 2007 Labor Act which prohibited employers from using labor hire, i.e., third-party hired temporary or contract workers. Opponents of labor hire see the industry as akin to the "inhumane" contract labor system used during Apartheid, and have called the practice a form of modern day slavery. Representatives of the National Union of Namibian Workers (NUNW) have decried the decision, have questioned the motives of the Supreme Court Justices, and have called for the decision to be reversed. Employers, not surprisingly, see the December 14 as a victory arguing that temporary workers allow for a more modern and flexible labor market and more competitive economy. The real winner is Namibia's judiciary which demonstrated that, once again, it is unafraid to act independently. Finally, legislators would be wise to read the ruling carefully, as the Supreme Court sprinkled the decision with clues on how parliament might craft a new law to restrict (but not prohibit) labor hire. End Summary. -------------- Background -------------- ¶2. (SBU) Following several years of deliberation, Namibia's new (2007) Labor Act entered into force in November 2008. Even before entering into force, African Personnel Services (APS) challenged a provision of the act (section 128) that prohibited employers from using labor hire -- third-party hired temporary or contract workers. The crux of APS' challenge was that prohibition of labor hire violated article 21 of the Namibian constitution that allows "All persons . . . the right to . . . carry on any . . . trade or business." ¶3. (SBU) The High Court generally accepted most of the GRN's arguments that rights under Article 21 could be limited under reasonable circumstances in the interest of democracy and the greater good of Namibia. The High Court also accepted that employment contracts should have only two parties -- the employer and the employee, and that there is no place for a third party in an employment contract. Government attorneys and proponents of section 128 argued labor hire is analogous to the labor system black Namibians suffered under during Apartheid - a system akin to slavery they have claimed. The High Court agreed and cited ancient Roman law in explaining their decision. Under Apartheid black Namibians often suffered under deplorable working conditions, enjoyed few labor rights, and had little to no legal recourse to redress instances of abuse. -------------- The Supreme Court Overturns The High Court -------------- ¶4. (SBU) On December 14, the Supreme Court reached a unanimous decision in favor of APS declaring section 128 of the 2007 Labor Act unconstitutional. The Justices, in their 120-page ruling, acknowledged that the Apartheid labor system had been unjust and inhumane, but argued that "none of the discriminatory laws that underpinned the contract labor system still apply in Namibia." The Supreme Court picked apart the High Court's reasoning that equated labor hire with slavery, and remarked that contract law has evolved WINDHOEK 00000468 002 OF 003 substantially since Roman times. The court acknowledged that the legislature has the right to limit or regulate labor hire, but that section 128 was "overbroad." One sentence in the decision well summarizes the Supreme Court's thinking: "The prohibition is tailored much wider than that which reasonable restrictions would require for the achievement of the same objectives and is disproportionately severe compared to what is necessary in a democratic society for those purposes." -------------- Reactions to the Supreme Court Decision -------------- ¶5. (SBU) According to press reports, representatives of the National Union of Namibian Workers (NUNW) called the Supreme Court's decision a "slap in the face" and "counter-revolutionary." In a press statement, NUNW Secretary General Evilastus Kaaronda called the Supreme Court justices "complacent and ignorant functionaries" and advocated for their dismissal. (Note: The NUNW has long-standing links to the ruling SWAPO party dating back to the liberation struggle against the South African Apartheid regime. End Note). The Secretary General of the Namibian Employers Federation, (NEF) Tim Parkhouse, welcomed the Supreme Court's decision, arguing that it would benefit the Namibian economy by creating a more flexible and modern labor market, allowing for greater domestic and foreign investment, and ensuring job creation. (Note: Unemployment in Namibia is estimated to be over 35 percent. End Note). -------------- Labor Law Enforcement is Lacking -------------- ¶6. (SBU) Parkhouse told econoff that the NEF does not support the "barbaric practices" of the past, and in his public comments following the ruling stressed the labor hire industry requires regulation. In previous discussions with a senior Ministry of Labor and Social Welfare official (reftel A),econoff was told that labor hire employees are viewed as expendable and that they earn a quarter of the salary of normal (or direct hire) employees, with the remaining three-quarters going to the labor hire companies (like APS). When pressed, the senior official acknowledged that labor hire could be positive in certain instances but claimed the GRN did not have the resources to regulate and enforce the labor hire industry. -------------- Labor Law Impact on PEPFAR -------------- ¶7. (SBU) With the enactment of the 2007 Labor Law, some companies and organizations chose to proactively convert their contract employees to direct hires in order to avoid legal penalties. Approximately 1,000 health workers, hired by labor companies and funded under President's Emergency Plan for AIDS Relief (PEPFAR), were precipitously added to the employment rolls of the Ministry of Health and Social Services (MoHSS). However, the workers retained their contract status and were not accorded civil service benefits. Despite the Supreme Court decision, we do not expect the MoHSS to now shift these direct-hire employees back to a labor-hire arrangement. -------------- Comment WINDHOEK 00000468 003 OF 003 -------------- ¶8. (SBU) While APS and proponents of labor hire may feel triumphant today, the real victor is the rule of law. The Supreme Court demonstrated that it remains independent. Even so, the Supreme Court's decision against section 128 may not be the end of the road for advocates of a labor hire ban. The NUNW has already made clear that it will push to have parliament draft new legislation to restrict labor hire. If parliamentarians follow the prescriptions of the Supreme Court, which acknowledged that other nations have applied reasonable legal restrictions on labor hire, it is conceivable that Namibia could enact valid legislation to limit labor hire in the not-so-distant future. End Comment. MATHIEU