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Construction workers left out in the cold…contractors not adhering to pension fund provision

2023-05-29  Staff Reporter

Construction workers left out in the cold…contractors not adhering to pension fund provision

A gazetted collective agreement between the Constriction Industries Federation (CIF) and the Metal and Allied Workers Union of Namibia (Manwu) makes it for contractors to register their most vulnerable workers with a pension fund and assist with contributions. However, the CIF and the union say this is not happening and is leaving construction workers out in the cold when it is time for retirement. 

“As the establishment of a national pension fund in Namibia remains on the cards, and the modalities and the nature of such a fund still need to be ironed out by government authorities in consultation with various stakeholders, the construction sector is the one industry that is taking the lead and has ensured that it’s most vulnerable employees have adequate social protection, especially with the aim of achieving relative financial security upon retirement,” reads a CIF statement. 

The statement added that it is an important aspect when working towards decent work in the construction sector. As such, CIF and Manwu in May 1990 collaborated to establish an umbrella fund for the industry; specifically the Namibia Building Workers Pension Fund (NBWPF).

Enwich Kazondu, principle officer of the NBWPF said: “As a result of joined commitment and focused efforts by the two parties representing both the employers and the employees in the construction sector, an agreement for the establishment of the fund was signed and therefore a key aspect that helped the industry to work towards creating decent work was jointly addressed”.

“An important fact to consider is that all employers in the construction sector, irrespective of whether they are members of the CIF or not, are legally obliged to ensure that their workers are registered with a pension fund so that they as well as their employees make respective contributions.”

The CIF statement states that the continued evolvement of the NBWPF is further supported by stipulations in the bi-annually negotiated collective agreement between the CIF and Manwu. This agreement determines the minimum wage payable as well as the minimum employment conditions in Namibia’s construction sector. 

According to the CIF, this includes the fact that employers in the sector must register their workers - as per the categories listed in the collective agreement - with a pension fund. 

“The preferable pension fund is the NBWPF as umbrella fund for the industry. However, employers and employees can also opt for other pension funds that offer similar or indeed better benefits than the NBWPF,” the CIF explained.  

However, the federation pointed out there is concern that some businesses do not adhere to these regulations, which undermines the intention of securing social protection, especially at the point of retirement. This, the CIF statement noted, is due to the fact that some businesses are struggling to afford the contributions in the currently very precarious economic environment that continues to have a hugely detrimental effect on the construction sector. 

Bärbel Kirchner, chief executive officer of the CIF said: “We are aware that some companies have not registered their workers, as per the categories listed in the gazetted collective agreement, and are not making any contributions on their behalf. Some businesses clearly ignore these statutory requirements and blatantly disregard them. These, however, would be mostly those that are not members of the CIF. Our members have to adhere to a code of conduct. Other businesses, who in the past have made contributions, are also struggling at the moment to continue doing so, due to the lack of work in the sector. Many see this as part of a measure to prevent further retrenchment”. 

Kirchner continued: “For that reason, we clearly want to see more majority-Namibian owned businesses to get contracts both in the private and public sector. It is not only important in view of job creation, maintaining and building capacities in the industry, but also in view of effective contribution to government revenues as well as building a future safety net at the point of retirement for those working in our sector”. 

Justina Jonas, secretary general of Manwu, is particularly concerned about foreign contractors not adhering to related mandatory requirements, such as registering their teams with a pension fund and making relevant contributions, thus acting in contradiction of the law. Said Jonas: “We have noted from our annual random site inspections that many projects managed by foreign contractors do not register their workers with a fund. There is no sense of caring for their workers or after the end of their working life, to mitigate poverty and maintain their standard of life during retirement age”.

2023-05-29  Staff Reporter

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