Retrenchment figures drop

Oliver Kazunga Senior Business Reporter
THE Zimbabwe Congress of Trade Unions (ZCTU) says 4,172 workers were retrenched between January and September this year compared to about 9,000 during the same period last year.
The labour body attributed the decline to increased hiring of contract workers as a cost cutting measure, as it emerged other companies were relying on students on attachment.

“Although it appears this year’s number of retrenched workers will be far much lower than that of last year, it’s not because companies were no longer retrenching,” ZCTU secretary general Japhet Moyo told Business Chronicle yesterday.

“We’ve noted that the companies have resorted to hiring contract workers and engaging students from tertiary institutions for work-related learning, than hiring permanent employees. If their (contract workers and students) contracts expire, in some instances, the contracts aren’t renewed and they just leave the organisation, thus the retrenchment statistics are bound to go down.”

Moyo said the trend on contract workers was commonest in the hotel and catering industry, where 90 percent of their staff were students on attachment.

“From figures we obtained from the retrenchment board, between January this year and September 4,172 workers were retrenched.

“As ZCTU, we believe the figures don’t give the actual picture of what’s happening on the ground and as such we believe the figure could be more than what’s been compiled,” he said.

“This is because the figures obtained are only cases that have gone through the Labour Court whereas, in cases where the workers and employers have agreed to part ways amicably, retrenched statistics for such scenarios haven’t been recorded.”

Moyo said companies were retrenching citing a host of challenges emanating from the negative economic situation.

Among the challenges highlighted is low capacity utilisation, compounded by liquidity constraints in the economy and high operational costs due to antiquated machinery.

Capacity utilisation retreated from an average 44,6 percent in 2012 to 39,6 percent in 2013, from an immediate post-dollarisation high of 57 percent.

The Confederation of Zimbabwe Industries (CZI) in its 2014 manufacturing sector survey report released last week, indicated that capacity utilisation this year further slid by 3,3 percent to 36,3 percent.

CZI said industries were under serious threat as de-industrialisation reached catastrophic levels, with dire consequences to the state of the economy.

The industrial representative body said arresting de-industrialisation would not be easy, adding that the private and public sectors should take action to address the spectre of economic stagnation or decline.