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Business Reporter
Private security companies say they are facing viability challenges and are pushing for an increase in service charges after Government recently approved wage and allowance hikes of over 337 percent for security guards.
After the upward review of the wages, Government also set new fees, which security companies should charge their clients for different services.
However, while the security companies are now obliged to pay the new wages in line with statutory requirements, a few clients are reluctant to pay the new approved fees citing pre-existing contracts signed before new wages and service charges were gazetted in April this year.
Security companies’ associations have expressed fear that some companies might fold if clients refuse to pay the new fees, resulting in huge job losses. According to Statutory Instrument 121 of 2021, Collective Bargaining Agreement: Security Industry, the lowest paid security guard now earns $8 500 from $2 500 and is entitled to a housing allowance of $1 500 and a transport allowance of $1 000.
The new figure was set by the Government after consultations with stakeholders who included the Security Association of Zimbabwe, the Zimbabwe National Security Association, Zimbabwe Security Guards Union, Private Security Workers Union and the National Employment Council for the Security Industry of Zimbabwe.
According to Statutory Instrument 105 OF 2021, Private Investigators and Security Guards (General)(Amendment) Regulations, 2021 (No.3), the fee for a contract guard for daily 24-hour coverage is now $80 000 while the fee for a contract guard (8am to 5pm) for five working days is now $40 000.
In one case, a company wrote to the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) asking for an upward review of service charges in view of the provisions of the two statutory instruments.
“Please be advised that in line with legislation that governs our industry, we are now reviewing our tariffs to $40 000 for a 1×12 hour guard and $80 000 for a 1×24 hour guard.
“This review has been necessitated by Statutory Instrument 105 of 2021 and the National Employment Council collective bargaining agreement effective 1 April, 2021 which has reviewed the minimum remuneration we should pay to our guards.
“The dynamics of these changes mean that we are currently paying out more than we expect to receive and hence we are operating at a huge loss,” said the company.
In response, ZETDC said it was not prepared to review the service charges in line with SI 105 of 2021.
“We acknowledge receipt of your proposal for increase in security service prices on the existing contract between us.
“Unfortunately, we are not in agreement with increasing the contract price basing on SI 105 of 2021. We can only make adjustments using the National Employment Council rates by adding the increase in labour cost to your tendered prices,” said ZETDC in a letter dated July 8, 2021.
A week later, another company wrote to ZETDC saying: “With all due respect, we cannot accept this proposal as it does nothing to cushion us from the heavy losses we are currently incurring in providing security services to your organisation.
“To begin with, we cannot assume that the only input into the organisation is labour. In order to supply services to you, there are many facets which come together in order to function effectively.”
In a circular dated July 20, the Security Association of Zimbabwe (SAZ) bemoaned the challenges facing the industry and called for remedial measures.
“The Security Association of Zimbabwe has continued to monitor the macro and industry specific operating climate and has noted the need to uphold the industry standards in the provision of private security services against the prevailing inflationary environment.
“As such, this circular serves to advise SAZ members and all stakeholders that the recommended tariff applicable from July 2021 for coverage period of 1×12 hours is $48 000 excluding VAT (Value Added Tax),” said the association.
A member of the association said while Government had shown commendable commitment to addressing the plight of security guards, the same could not be said of a few clients who were openly defying the law by refusing to pay the new tariffs.
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