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Arnold Mutemi
AFTER years of being derided as a poor remunerator, the government may have just turned the tables on the private sector.
The government’s decision to award its workers salaries close to the Poverty Datum Line has seen most employers in the private sector sweating as workers demand similar salary increments, setting the stage for protracted wage negotiations.
Most National Employment Councils are in the process of negotiating the 2014 salaries and disagreements are emerging as workers want employers to match salary increments awarded by the government.
The new civil servants’ salaries, which came into effect in January, put pressure on the private sector because for years, salary increases awarded by the Government, the country’s largest employer, have been used as a barometer for wage talks in other sectors.
The Government pegged the salary of its lowest paid worker at $375 up from $297, which is 75 percent of the Zimbabwe National Statistical Agency’s PDL of $505. Professional grades in the civil service earn an equivalent to or above the PDL.
With the economy inching towards deflation, it is almost impossible that this year’s negotiations will be inflation-linked as year-on-year inflation to December 2013 was 0,33 percent as such an increment would be minuscule.
No sooner than it was confirmed that civil servants had been awarded salary increases that would see them earn close to the PDL, workers’ unions in the private sector declared that they would press for similar increments.
First to come out publicly stating that they would accept no less than the PDL for their salaries was Associated Mine Workers Union of Zimbabwe.
Currently, the lowest paid worker in the sector gets $227 a month and the union is demanding a minimum wage of $573.
Workers in the tourism industry were also quick to make their expectations known ahead of the Collective Bargaining Agreement for the sector, with the Zimbabwe Tourism Association Workers’ Union declaring it would not accept anything less than the salary of the least paid government worker at $375.
Despite the glamour and lavish spending associated with the tourism sector, the Zimbabwe Tourism Association Workers Union claims the lowest paid worker in the industry’s conservation, safari and wildlife sub-sector takes home a paltry $74 a month while those employed in the leisure sub-sector earn $275.
The union is gunning for salaries that would bring parity to their salaries of the lowest paid worker in the industry while at the same time matching those of the lowest earner in government, meaning employers should brace for a massive 220 percent salary increment in some cases.
The employers’ situation is compounded by a belief in some private sector workers that it is an abomination to earn less than civil servants. This belief was cemented during the days of hyperinflation when government failed to review workers’ salaries with the same regularity as the private sector, which in some instances was increasing salaries monthly in an attempt to counter the effects of hyperinflation.
Employers claim industry is not performing well and cannot meet the huge salary demands of workers.
While employers agree that workers deserve a wage increment, they say such an increment should not bring companies to their knees.
With industry facing various challenges including reduced operating capacity, liquidity challenges and outdated machinery, many companies are struggling to pay workers on time and are unlikely to be able to carry the burden of an inflated wage bill.
According to latest statistics from the Confederation of Zimbabwe Industries, most companies are struggling and operating at about 39,6 percent capacity down from 54,9 percent in 2012.
Most employers would prefer to award production based salaries.
Bulawayo-based labour consultant Davies Ndumiso Sibanda said while PDL salaries are desirable, economic challenges facing the country prevent employers from giving such salaries.
He believes that workers should be given salaries which can sustain them while at the same time sensitive to the challenges facing business.
Sibanda said it was wrong to use the government salary increases as a measure for the private sector wage negotiations.
“Sources of money for government and the private sector are different,” he said.
Zimbabwe National Chamber of Commerce chief economist Kipson Gundani said basing salary negotiations on the Poverty Datum Line was wrong. He said the PDL was an outside factor which should not be considered when negotiating salaries.
Like Sibanda, he advocates for a situation where companies pay what they can afford.
“The bottom line is remunerations should be productivity based. You should pay what you are able to produce. I prefer a scenario where people agree on a wage that keeps the company alive and jobs alive,” he said.
He said save for a few companies in the mobile telecommunications and mining sector, most companies would not be able to pay bloated salary increments and survive.
Gundani said just because a few people at some companies were earning huge salaries, it does not mean businesses can afford significant wage increments.
“What distorts the situation is the outrageous salaries (some are getting). But the bottom line is the capacity to pay is not there,” he said.
Gundani says the government can afford to splash huge salary increments on its workers because it gets its money from the private sector in the form of taxes. He also said the bulk of the government revenue was directed towards salaries something which business cannot do.
“The government sector does not generate money. It is collected from the private sector. If you look at the budget, 75 percent goes to salaries which is an anomaly,” he said.
The president of the Employers’ Association of Tourism and Safari Operators, Clement Mukwasi, said the whole concept of PDL-linked salaries was misunderstood.
“The PDL is based on a family of six with two people working. It should not be paid to one person . . . it should be a shared salary,” he said.
Mukwasi said the tourism and leisure industry would not be able to sustain salaries being demanded by workers, considering that business in the sector was seasonal.
“Tourism is a seasonal business, more or less like agriculture. There are certain months when we have no tourists from January to March. Right now Victoria Falls looks like a ghost town. These three months are tough but we cannot off-load staff.
“High earning months are August and December and earnings are distributed to when there is no business. If we raise salaries chances are small companies will fold,” he said.
Mukwasi said increasing salaries had an effect on the entire business. He said statuary payment such as contributions to the National Social Security Authority and the Zimbabwe Manpower Development Fund would also increase as these were based on the total wage bill.
He said workers clamouring for PDL salaries need to take into account tips which they received from tourists.
“Tourism workers get paid tips. Normally a tip is 10 percent of the total expenditure. Almost very international tourist pays a tip. As players in the industry we can trace and know the exact amounts paid in tips by tourists,” he said.
Labour consultant Sibanda says this year’s negotiations would be complicated by the fact that traditional indices used salary negotiations were now irrelevant.
“We need to understand negotiations happening at a time when there is deflation. The effect of this is that traditional indices can not be used effectively. Inflation can not be used as an indicator. Parties will have to negotiate based on figures and not percentages,” he said.
With the divide between what the workers wants and what employers are offering very wide, it is likely that only arbitration will bridge the gap.
Online Reporter