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Opinion Cuthbert Mavheko
While presenting his maiden Monetary Policy on February 11, 2015, the Governor of the Reserve Bank of Zimbabwe John Mangudya said amendments to the Labour Act should be expedited to make it affordable for employers to retrench workers and align business out-turn and profitability with staff resources.
Let me quote him as he was quoted: “The current regulations which make it more expensive to retrench than to maintain an employee are not conducive to production, neither are they conducive to even contemplate to increase employment.”
Businesses in Zimbabwe have been struggling to remain afloat in a repressed economic environment, forcing dozens of companies to either downsize or close down.
According to the Retrenchment Board, between 100 and 400 workers are being retrenched every week. This figure could be much higher because more than 30 percent of companies are reportedly retrenching workers without informing the Retrenchment Board. In 2014, the Zimbabwe Congress of Trade Unions (ZCTU) said 4,172 workers lost their jobs between January and September.
However, it is the strong contention of the author of this article that more workers could have been sacrificed on the altar of retrenchment had employers not been deterred by current labour laws that make retrenchments more expensive.
“Last year our employers announced plans to retrench all permanent workers and replace them with contract workers. They offered us a pathetic retrenchment package of one week’s pay for every year served. However, they (employers) developed cold feet and suspended the retrenchment exercise when we rejected their offer and demanded a package that is equivalent to three months pay for every year served,” said a worker in the textile sector who refused to be named.
As alluded to above, there are many companies that suspended retrenching workers because they are unable to pay termination packages while those that have retrenched are fighting legal battles with workers, who are demanding their dues.
It is my humble submission that once the proposed new legislation on labour is effected, the floodgates of retrenchment will open and multitudes of workers will be hurled into the icy dungeons of unemployment. Events that unfolded in the country in the past, following the deregulation of labour laws on retrenchment underscore this insightful observation.
When the Economic Structural Adjustment Programme (Esap) was introduced in the country In the 90s, the government deregulated labour laws on retrenchment in line with recommendations from the World Bank and the International Monetary Fund(IMF).
Prior to this, it was difficult, if not altogether impossible, for employers to dismiss workers. If an employer wanted to shed off a portion of his/her workforce he/she had to apply to the government first for permission to do so. Permission could only be granted after the government had established beyond reasonable doubt that the employer had good reason to retrench.
It is worth noting that the deregulation of labour laws on retrenchment accorded employers the prerogative to hire and fire workers without government interference. Sadly though, some unscrupulous employers took this as an opportunity, not only to settle old scores with “troublesome” workers, but also to treble their profit margins.
The tragic result is that hordes of workers were made redundant. Due to the fact that the generality of the retrenched workers were given paltry retrenchment packages, the overwhelming majority of them soon found themselves wallowing in abject poverty when their money ran out.
An infinitesimal number of the retrenchees were re-hired by their former employers as contract workers and continued to work in that capacity for many months, even years, in spite of the fact that the Labour Act states, in no uncertain terms, that contract labour should only be reserved for temporary situations, where it is deemed unnecessary to hire full-time workers.
Yesteryear Finance and Economic Development Minister Cde Patrick Chinamasa announced a cocktail of proposed changes to labour reforms, which sent ripples of excitement and apprehension across the length and breadth of the country.
The basic reasons being advanced by employers for labour reform and are reflected in the Minister’s proposed changes are as follows: (1) The need for labour flexibility on working hours and dismissal laws.
(2) The abolishing of fixed term contracts; introduction of a productivity-based pay system and a standard retrenchment package of one week’s salary for every year worked as opposed to the current three months for every year worked.
(3) The need to align and link labour costs to productivity.
(4) The need to terminate rigid and costly dismissal/retrenchment laws that “over-protect workers” and stifle productivity.
(5) And to do away with unrealistic and costly arbitral awards and a cumbersome arbitral system.
As I see it, approving the proposed new legislation on labour is tantamount to returning the country to the dark era of slavery as the new legislation gives employers the same arbitral powers that they had under the colonial Master and Servant Ordinance Act of 1901.
Its insightful to note that under this Act, employers could hire, fire and retrench workers at random. Workers were treated almost like beasts of burden; they were exploited until their energies were sapped and they had lost their vigour.
When that happened, they became a liability to their white colonial masters and were promptly carted back to their rural areas, dumped with the rest of the human detritus, there to perish with their own kind without inconvenience to the white oppressors.
It is quite clear that the major goal of employers in industry is to retrench all permanent, unionised workers and replace them with casual, non-unionised workers, who will be paid on a piece work basis rather than on a weekly or monthly basis as is the norm under the present set-up. What this actually means is that if, for instance, there are no orders or electricity, workers will not get paid.
Apart from being over-worked, underpaid and dismissed willy-nilly, workers will not have any pensions, no medical aid, sick or vacation leave. They will be victimised and fired on the spot if they join trade unions. This will obviously impact negatively on their constitutional right to organise and join trade unions.
Without unions to guide, direct and protect them from the wicked machinations of their heartless, profit-obsessed employers, workers will survive only by the grace of the merciful hand of the Almighty.
Online Reporter