‘Employers biggest winners’

Ngoni Dapira
EMPLOYERS have been cited as the biggest winners in the Labour Amendment Draft Bill which now awaits President Mugabe’s assent, proposing minimum reparation of two weeks wage for every year served as compensation to all employees fired in the wake of the landmark Supreme Court ruling.

This was highlighted during a breakfast meeting on termination of employment on notice organised last Thursday in Mutare by a local consultancy firm, Eve Employment Consultancy in conjunction with Golden Peacock Hotel.

Independent arbitrator, Mr Kudakwashe Pisirai in his presentation on the Bill said employers were the biggest winners despite their outcry about having no money to pay the employees and fears of rapid company liquidations following the retrospective law.

“Retrenchment under the old laws was difficult and costly. The least case scenario was one month for every year worked, while the extreme case was the Daily News case back in 2003 of six months for every year worked. So the present ruling reparation with a minimum of two weeks wage for every year served is actually a score for employers and it will serve as a pull factor to foreign investors,” said Mr Pisirai.

He said the fact that employers could apply for an exemption not to pay the minimum retrenchment package immediately through the National Employment Council was another additional benefit in favour of progressiveness.

According to Clause 5 12C (2), Unless better terms are agreed between the employer and employees concerned or their representatives, a package (hereinafter called “minimum retrenchment package”), of not less than one month’s salary or wage for every two years of service as an employee (or the equivalent lesser proportion. . .) . . .shall be paid. . ., no later than date when the notice of termination of employment takes effect.

Mr Pisirai said the 14-day ultimatum for companies to respond and the opening for companies to prove their inability to pay was another windfall.

Clause 6 which touched on measures to avoid retrenchment and the powers of NEC and the retrenchment board to determine deadlocks was also applauded by people at the workshop who said resistance by unions to lower packages to reasonable amounts was dealt with cleverly.

Africa University corporate secretary and legal advisor, Mr Christopher Munguma, who was part of the attendants at the workshop, concurred with Mr Pisirai but called on Government to speed up the alignment of all amendments to the Constitution.

“The Government Gazette on the part of the minimum retrenchment package was definitely in favour of employers with a visionary outlook to draw foreign direct investment and prop-up industry, but at the same time protecting the interests of employees.

“However, we have quite a number of laws that have not yet been aligned to the Constitution which leaves plenty of loopholes for abuse,” said Mr Munguma.

In his presentation, a business consultant, Mr Joseph Mashingaidze, said Government should address the dollarisation issue and assist industry on compensation prior to dollarisation in 2009.

“Industry is complaining that the current push to pay severance packages takes no consideration that companies migrated from the Zimbabwe dollar era to dollarisation in 2009 with virtually nothing, yet now they have to settle obligations rising from a period where all their investments were sunk. Government has to address how to assist industry in the case of retrenchment benefits before dollarisation,” said Mr Mashingaidze.

On the other hand, negotiations by the TNF are expected to commence today (Friday) to incorporate input from trade unions and business.

Following the passing of the Bill by Senate and the National Assembly last week, President Mugabe – according to the Constitution – should assent to a Bill within 21 days of receiving it.

Zimbabwe Congress of Trade Unions secretary general, Mr Japhet Moyo on Tuesday said employers should not hide behind a finger in the Labour Act amendment process, but look ahead.

“The wage bill debate should not be about retrenchment choking industry, but employment costs as a whole specifically the salaries of top executives and chief executive officers. The salarygate scandals in 2014 exposed all these anomalies in the corporate sector, but up-to-date nothing has been done to address the issues. What is due to employees should not be questioned, but let us question how to circumvent the liquidity constraints companies have to be able to retrench and enact laws that will lure investors and protect the interests and fundamental rights of both employers and employees,” said Mr Moyo.

Employers Confederation of Zimbabwe executive director, Mr John Mufukari, however, said the retrospective law was in tangent to the realistic situation on the ground which had propelled employers to jump on the opportunity of dismissals by notice.

He said every employer was aware of the employees’ statutory obligations, but the stop-gap measure of dismissals by notice was a necessary evil to boost industry on a growth trajectory.

“There is no money. If most business could not afford to pay employees monthly wages, how they will pay arrears and the stipulated retrenchment minimum packages? Labour Unions allege some employers are living large at the expense of employees. This would be an example of the few bad apples which need to be pruned but in generality most businesses are struggling. As EMCOZ, we have since encouraged all our members to be transparent and reveal their financial state of affairs to employees to clear the air in that regard,” said Mr Mufukari.