1. Subject to the provisions of the merit system law, chapter 36, the director of the department of labor and industrial relations shall employ and prescribe the duties and powers of such persons as may be required and may make expenditures within the appropriation therefor as may be necessary to carry out the purposes of the law.

2. Any person employed by the inspection section more than six months prior to August 13, 1972, shall be admitted to the qualifying examination covering the position held by him and may be retained at the discretion of the director provided that he attains a passing grade in such examination. Any employee appointed within six months prior to August 13, 1972, and any employee appointed from and after August 13, 1972, shall be appointed subject to the merit system law.