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Martin Kadzere and Tendai Mugabe Harare Bureau
Finance and Economic Development Minister Patrick Chinamasa says public sector bosses who submitted false salary schedules to government will face serious consequences.While it has been established that some bosses in these entities were pocketing as much as $550,000 monthly, there is suspicion that some under-declared their packages and claimed to be earning less than $40,000 when they are taking home significantly more.
Minister Chinamasa also said the government had approved a review of labour laws to eliminate obstacles constraining viability of companies arising from inflexible employment legislation.
Addressing the media in Harare on Tuesday, Minister Chinamasa said, “You cannot run a country without information or on incorrect information or distorted information. As we sit . . . we are going to consider what penalties to impose in the event where we asked for information in the event that we are not given correct information. I think we need penalties so that we have all the information. If information is hidden from us there should be penalties to follow.”
Information, Media and Broadcasting Services Minister Professor Jonathan Moyo said the veracity of the figures submitted by public sector bosses would be determined by audits.
He highlighted the possibility that some executives under-declared their earnings, saying: “I can give you an example for you there is item three (on the salaries schedule) — ZBC — those figures exclude bonus of the CEO; when you include that $37,050 and bonus that will give you $44,000 a month. But this ($37,050) is what ZBC has submitted and it is the same with other organisations; they submitted this and most likely you will not find a case where they have lowered — they will just not disclose in full the package of the salary.”
On the issue of labour laws, Minister Chinamasa said government wanted to deal with constraints in relation to retrenchments, terminal benefits, downsizing, working hours and the arbitration awards system.
Many companies say labour costs gobble about 50 percent of their expenses.
Minister Chinamasa said public sector employment costs were adversely impacting on national economic competitiveness, which has resulted in the current situation “where the country operates on a typically high cost but low production. There is therefore urgent need to address this state of affairs to ensure the success of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation,” he said.
Analysts have long expressed concern that current labour laws made it difficult to reduce staffing costs and align them with business realities. This in turn made the cost of production higher and thus weighed down on the wider economy.
Current retrenchment costs include notice pay of three months, 12 months’ severance pay, 24 months’ salary multiplied by length of service, service pay of six months per completed year of service, and a one-year medical aid cover.
“Honestly, if a company can afford to raise such an amount to retrench, it can always spend that money on recapitalising the business than letting workers go,” Proserve Human Resources Consultants managing director Emmanuel Jinda said in an interview.
He said there was need for a remuneration model that took productivity into account, and to introduce “wage correction” policies.
“Under the current model, people are just being paid to be at work with no relationship with what one achieves at the end of the day. Salaries are not related to productivity. Just look at what has been happening in State enterprises,” said Mr Jinda.
Confederation of Zimbabwe Industries president Charles Msipa added that the high costs related to retrenchment were forcing companies to liquidate.
“There was a lot of social protection when the retrenchment regulations were put in place during the Zimbabwean dollar era but this has become impractical under dollarisation. We are then ending up in a situation whereby companies cannot afford to retrench even if it is the only viable option to save the company and avoid liquidation,” he said.
In South Africa, a severance pay of at least one week’s remuneration per completed year of service is paid out. The remuneration is calculated inclusive of basic salary and benefits. Outstanding leave is also paid out in full, while notice pay varies according to the specific employment contract.
Depending on the employment contract again, workers may be entitled to a pro-rata payment of annual bonus, and the balance of any pension or provident fund benefits.
Online Reporter