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Cablegate: Namibian Supreme Court Rules Independently, Finds Labor Law

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).

---------------------------------

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.

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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

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