VZCZCXRO7414
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHWD #0468/01 3500827
ZNR UUUUU ZZH
R 160826Z DEC 09
FM AMEMBASSY WINDHOEK
TO RUEHC/SECSTATE WASHDC 0008
INFO SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHWD/AMEMBASSY WINDHOEK

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 
 
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Summary 
 
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¶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. 
 
 
 
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Background 
 
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¶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. 
 
 
 
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The Supreme Court Overturns The High Court 
 
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¶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." 
 
 
 
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Reactions to the Supreme Court Decision 
 
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¶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). 
 
 
 
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Labor Law Enforcement is Lacking 
 
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¶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. 
 
 
 
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Labor Law Impact on PEPFAR 
 
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¶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. 
 
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Comment 
 
WINDHOEK 00000468  003 OF 003 
 
 
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¶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