ILO Technical Assistance in a LDC: Labour law reform in Lesotho Debbie Collier & Shane Godfrey University of Cape Town

Outline 1.Four categories of constraint/challenge that we identified in the context of the project 2.Lesotho in social and political context 3.Labour law and law reform in Lesotho 4.Lesotho’s economic and labour market context 5.Policy and development goals in Lesotho 6.Our proposals

1. Four categories of challenge Stakeholder resource and capacity constraints The host county political and policy context A ‘one-size-fits-all’ (or ‘once-off’) approach to labour standards The negotiated boundaries for external consultants

2. Lesotho in context Constitutional monarchy Deeply dependent on South Africa Economy attempting to transition from reliance on primary sector activities Low levels of HD / high HIV/Aids prevalence Political instability

3. Labour Law and Reform in Lesotho August 2013 letter (‘Labour law review 2006’) from the Ministry of Labour and Employment requesting ILO assistance in bring finality to the review process that stalled in 2006 – Parliamentary Counsel advice that amendments ‘too bulky’ and the need for codification Expected outcome from the consultancy – Issues Paper – Instructions to guide the drafting of a new Code

Outline of labour law Labour Code Order 1992 – Consolidated existing laws, regulates all conditions of work (incl. H & S), wage machinery, collective bargaining and establishes a Labour Court Labour Code Amendment Act 1995 Labour Code Amendment Act 1997 Labour Code Amendment Act 2000 – Established the DDPR and a Labour Appeal Court Labour Code Amendment Act 2006 – HIV/Aids Labour Code Amendment Bill 2006 – Various oversights/deficiencies – including H & S, domestic work, discrimination law, power of inspectors

Areas identified for reform Incorporating relevant 2006 amendments Urgent and other revisions Regulating temporary employment agencies Labour market policy direction Revisiting the key labour institutions The use of Codes of Good Practice Protection of children Regulatory framework for collective bargaining Revising the occupational health and safety standards Skills development Scope of protection - who is an employee? – Mechanisms to address disguised employment – Exclusions in subsistence agriculture Formalising informality associated with formal firms – Regulated flexibility Casual and part time work Temporal flexibility

4. Economic and labour market context Historically economy was dependent on migrant worker remittances and SACU revenues – both have declined considerably in past 20 years Still dependent on remittances and SACU revenue but much less so – 64% of total income now generated internally Average real GDP growth of 4% from But employment growth has lagged GDP growth And distribution of income very skewed The result is that high levels of poverty, unemployment and inequality

Economic and labour market context In % of population below the poverty line Unemployment rate in 2009 of 29.4% Gini coefficient very high at 53% in 2003 (although down from 57% in 1995) Agriculture – involves 40% of EAP and 68% of labour force, but in decline: 50% of GDP in 1966 but currently only about 8% Internal migration replacing external, from rural to urban, more women, more young people Youth unemployment extremely high at 47%

Economic and labour market context Labour force of in % of labour force in formal employment 62% of labour force in informal employment Of those in informal employment, 51% in formal enterprises and 49% in informal enterprises Subsistence agriculture seems to make up a large proportion of informal employment Vast majority of employed population are employed in ‘elementary occupations’ – skilled workers in short supply Limited vocational and technical education and training

5. Policy and development goals Labour market policy needs strong development orientation, i.e. integrated with NSDP and focused on addressing poverty, employment creation and inequality Needs to take account of the regional and sectoral contours of Lesotho’s economy Needs to respond to and complement the transition the economy is making from agriculture to manufacturing and service sectors But also needs to address major labour market problems and development vulnerabilities: declining remittances; fragile agriculture sector; threat to garment sector; need for foreign investment In summary, support for better livelihoods in agriculture, transition informal to formal jobs, and create many more jobs

6. Our proposals 4 th layer Flexible wage setting and collective bargaining Enhanced enforcement mechanism 3 rd layer Active labour market policy : enhanced skills development system 2 nd layer Health & safety and decent conditions of work 1 st layerExtension of social security Layering of rights approach

Layered approach in specific sectors Agriculture – Informal employment / livelihoods in subsistence agriculture Social security Health and safety Workman’s compensation Manufacturing – All four layers – Small business exemptions for some provisions

Transitioning from informality New categories of employee – The Issues Paper proposed three categories of ‘flexible’ employees distinguished by reference to both their hours of work and the manner of their engagement. – Employees working 24 or less hours per month; – Employees working more than 24 hours per month but 72 or less hours per month on a temporary or irregular basis – these are described as ‘casual employees’; – Employees working for more than 72 hours per month but less than the hours of a full time employee, described as ‘part-time employees’ who are employed indefinitely or on a fixed-term basis.

Temporal flexibility An alternative way of articulating hours of work that accommodates flexibility in the context of hours of work is to provide for a variety of alternatives to the existing norm, for example to include in the Labour Code: – Provision for compression of ordinary weekly hours of work within a week subject to a maximum of 12 hours per day without overtime pay. Excludes Sundays. By agreement with [xxx] Transport arrangements [xxx] – Provision for compression of monthly hours of (4.3 x 45 = hours) within a month without overtime pay subject to a maximum of 11 hours per day, 6 hours on Saturdays and excluding Sundays. By agreement with [xxx] Transport [xxx] expediency – Provision for averaging of weekly hours over four months subject to maximum of 56 hours per week, with hours over 52 hours in a week to be paid at 1.25 overtime pay. By agreement with [xxx] Transport [xxx]

Returning to technical assistance and development constraints in an LDC Ownership of the project – regular communication Ongoing political instability and economic / labour market constraints “ … to offer legislative proposals whose implementation could be realistically undertaking in the context of each country”