Government is setting itself up for a fight with unions if it moves ahead to implement any wage cuts for its 100 000 strong civil service as proposed by Finance Minister Iipumbu Shiimi, when he announced the COVID-19 Economic Stimulus Package this week.
According to the proposal put forward by Shiimi, government and business owners will be allowed to negotiate a temporary 20 percent reduction of salaries and wages during the crisis period, and 40 percent for the worst-hit industries, such as the tourism, hospitality, travel and aviation sectors, as part of efforts to avoid major retrenchments and business closures.
The Teachers Union of Namibia (TUN), which represents over 10 000 teachers, said there was no consultation regarding government’s proposal and the union was not even open to the suggestion.
“We were not consulted on that and from the way we are interpreting this, it merely a proposal. As for government, it should never consider any such plans to cut salaries of civil servants. We are not going to condone that,” TUN Secretary-General, Mahongora Kavihuha said.
“The public service is already carrying a heavy burden on its shoulders, so any such plans to cut their salaries, will be unthinkable. It will be shortsighted on their part for them to do so.”
According to him government, in the proposed stimulus package, should have proposed policies to assist the majority of Namibians living in poverty and suffering because of the existing economic conditions.
“In fact, government should come up with a pro-poor stimulus plan, not one that favours business. There are a lot of people out there suffering as we speak, due to the coronavirus outbreak and they also need help to survive,” Kavihuha said.
Namibia Public Workers Union (Napwu) General Secretary, Peter Nevonga, said although government had not consulted them prior to announcing the proposal, the union will only announce its position when government and other employers approach it officially regarding the proposal.
“We have our position when we are approached by any employer under our scope of operation. No. Government has not engaged us. It’s not a given that there will be a cut and it cannot be implemented unilaterally,” he said.
The move which seems to have the blessing of President Hage Geingob, comes amid concern that the existing government wage bill is unsustainable, especially now when government finances are under threat due to the impact of the coronavirus.
In his previous role as Governor of the Bank of Namibia, Shiimi repeatedly voiced concern that at 16.3 percent of Gross Domestic Product (GDP), Namibia’s public wage bill is higher than the SACU average of 9-10 percent and that of many other countries in the world.
On whether public office bearers such as the president, members of cabinet and parliamentarians would be affected if government were to effect any salary and wage cuts, finance ministry spokesperson Tonateni Shidhudhu, said Shiimi’s announcement was a mere proposal.
“The 20 percent cut is a flexibility that we are proposing for employers and employees. We are suggesting employers and employees should be allowed to negotiate up to a 20 percent salary cut to mitigate the negative impact on cashflow for businessesw, as opposed to retrenchment.
“Our goal is to protect jobs. It is relevant to all employers and employees who are negatively affected by the economic situation as a result of Covid-19, including government. It is a proposal not a directive. It should be negotiated between employers, employees and unions, where applicable,” he said.
The Namibia Chamber of Commerce and Industry (NCCI) welcomes the government’s proposal regarding the relaxation labour laws allowing employers to renegotiate salaries and wages with their employees.
“On labour matters, the NCCI welcomes mechanisms to be put in place to deal with staff matters and appeals to trade unions to demonstrate goodwill in the spirit of partnership,” NCCI CEO, Charity Mwiya said.
In an effort ease pressure due to the negative economic and social impacts of the COVID-19 outbreak on business and individuals, government announced a total stimulus and relief package amounting to N$8.1 billion.