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By: Nghiinomenwa Erastus

The government has gazetted the Collective Agreement to increase the construction sector’s minimum wage and improve working conditions.

The government notice in gazette No. 7675 released early this month makes it mandatory for everyone operating in the sector to pay N$17,38 per hour with effect from 2 November this year.

This comes after the Construction Industries Federation of Namibia and the Metal and Allied Namibian Workers Union request to extend the collective agreement to employers and employees in the construction industry regardless of their union affiliation.

The last time the sector got an increase was in 2018.

The most significant change was the increase in the minimum wage payable, which is 2,6% for the first year, and 2,6% for the second year.

The collective agreement also requires service allowance to be paid to every employee equal to 150 hours of their wage and paid as part of the December remuneration.

The service allowance is payable at the end of that month for an employee not going on leave during December.

In the case of an employee going on leave in December, on the last working day before the commencement of their annual leave.

This allowance will be calculated pro-rata to every fully worked month the employee was in service during that specific year.

Should the service of an employee be terminated before the end of the year, a pro-rata payment will similarly be due, the agreement read.

The law also made it mandatory that all employees for whom the employer registers minimum wages payable 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.

The representatives have agreed that for all employees for whom minimum wages are prescribed, their employer must apply for membership with the” (NBWPF).

Membership of the pension fund shall be subject to the rules and regulations laid down by the fund administrator.

In retrenchment, the employer has to issue a benefit statement with the retrenchment package to every employee to allow the employee to decide if he wants to take his contribution out of the fund or keep it with the fund.

The gazetted agreement mandate employers to pay a ‘Living Away Allowance’.

The allowance is payable to employees sent by the employer to a working site so far away from the base of employment that they have to stay away from the base overnight.

The minimum living away allowances are calculated at 12% of the employee’s hourly wage for the entire duration of this agreement, inclusive of any overtime/Sunday time.

The 12% are split as follows 50% (6%) for food and 50% (6%) for the inconvenience of staying away from home.

The gazette also indicates that employers have to provide accommodation conforming to generally accepted standards in the industry.

Qualifying accommodation is a tent of good quality for short-term contracts and ablution facilities.

Furthermore, travelling to and from home base exceeding 3 hours of actual driving time per day has to be reimbursed.

According to the notice, the employers must provide an allowance equal to 50% of the employee’s hourly wage rate for the exceeding time spent travelling to and from home.

It was also agreed that minimum protective clothing, gum and safety boots, hard hats, and overalls must be provided for a specific period.

The gazette has also highlighted that the minimum wage and the prescribed employment conditions are not tied to productivity.

The notice read that failure to maintain productivity levels will be addressed by additional training or disciplinary and incapacity procedures, as the case may be.

“An employer must not reduce the pay of an employee if the minimum productivity levels are not reached without addressing the employee’s performance,” read the notice.

The employer has to first resort to providing additional training before initiating disciplinary and incapacity procedures.

Reacting to the notice, Bärbel Kirchner, general manager of the Construction Industry Federation, explained that the notice gazetting will ensure a level playing field concerning wages in the construction sector.

“It will minimise the impact of labour costs as a differentiating factor when bidding for contracts,” she said.

Kirchner also added that the conditions for both the employer and the employee would improve once the industry has been regulated by establishing a construction council.

While updating, that effort has been made to optimise the procurement system favouring the maximum engagement of Namibian resources.

She said the construction sector had seen large-scale retrenchments over the years.

However, Kirchner is hopeful that with strategic intent by the government and deliberate-conscious efforts, it is possible to turn around and improve the sector’s performance.

While Metal and Allied Workers Union, secretary-general Justina-Jonas Emvula said that with the sector’s pressure since 2016, the worker’s purchasing power has diminished.

As basic needs such as food and petrol continue increasing- since 2018, no increment has been given to the workers, with the pandemic making things worse.

She explained that the construction sector could grow and could perform any kind of work available.

However, “the limitation of not awarding projects to local contractors is increasing high unemployment and precarious work in the sector,” she said.

Emvula call upon the government and private sector clients should listen to start prioritising local contractors to boost our local economy.

“We, therefore, call all contractors and their employees to work together collectively. We understand the frustration of lack of jobs or jobs that are not sustainable, but this increase will make a difference,” she stated. Email:


Julia Heita

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