Employers in wages and salaries dilemma

Davies Ndumiso Sibanda, Labour Matters
THE prevailing economic challenges have created a wages and salaries dilemma for many organisations that pay employees in bond notes and RTGS as the wages are fast becoming worthless while at the same time businesses are battling with ever rising costs.

While businesses are looking to Government to have economic fundamentals addressed so as to allow them to function normally, their biggest challenge is that operating costs for most businesses have now risen four or five fold making it very difficult to remain afloat.

At the same time workers’ wages and salaries have not increased to meet the cost of basic commodities that has risen four to five fold.

The dilemma that is there is- how do employers keep businesses afloat and at the same time cushion employees financially?

Some employers have taken an individualised stand and have given their workers an interim allowance to cushion workers and have said whatever comes from the NEC later will have to take the allowance into consideration.

While this is a positive move from workers perspective, it has set employers against each other with those who can afford to give workers an increase fighting from one corner and these who cannot fighting from another.

Some employers and workers have argued that NECs are dwarfed by what is happening and as such should allow employers and workers to negotiate at Works Council and pay whatever they will have agreed and the NECs deal with other issues.

This approach has its challenges in that not all businesses have professionally managed Works Councils, meaning that some workers can easily be intimidated by employers at plant level resulting in unfair agreements.

On the other hand workers’ committees can be too militant and unreasonable resulting in collapse of negotiations, illegal collective job action and job losses.

This happens often where the workers’ committee is not properly trained and the relevant union fails to provide effective guidance.

In such cases in-house wage negotiations do not work.

The bigger problem is that where the NEC fails to deal decisively with an issue, relegating it to Works Councils tends to reflect badly on the NEC as it is seen as an abdication of duty and it creates a bad precedent projecting Works Councils as more effective than NEC.

Another challenge is that where wage adjustments are variegated, there is an expectation that all employers should pay around a figure that is highest irrespective of circumstances of each individual employer.

Already the 40 dollars across the board cost of living allowance agreed by the NEC for Commercial Sectors effective from 1 December 2018, has attracted mixed reactions from unions and employers. However, it is too early to get its full impact.

The fact that we do not know where Government is going in terms of monetary policy makes it even more difficult for employers and unions to objectively negotiate wages given that while officially, the US dollar and Bond note are on 1:1, on the ground they are not the same and there is nowhere where one can get the US dollar and Bond on 1:1.

This challenge has an impact on the integrity of negotiations as parties argue based on what the law says and reality on the ground.

Paying salaries in US dollars as demanded by most union is also problematic as most employers have no access to US dollars and those with limited access to them use US dollars to service offshore loans and buy externally found inputs and pay critical suppliers who demand payment in US dollars leaving nothing or very little for workers.

For managerial employees, the challenges are the same, however, where we are sitting at the moment employers should work on solutions capable of being extended to managerial employees and vice versa.

In conclusion, I am of the view that NECs should rise to the occasion and acknowledge there is a wages and salaries problem and at the same time accept that businesses are facing uncertain economic future and above all find a viable solution that is appropriate for each NEC.

Further, there must be a smooth connection between NEC and Works Council negotiations where appropriate.

– Davies Ndumiso Sibanda can be contacted on: Email: [email protected].