adminFeature Zack Stan Murerwa
As worldwide commemorations for Workers Day took place on Friday it was indeed a time for introspection of the average Zimbabwean worker. While Government has put the necessary legislative instruments and structures to ensure democracy and fairness in the work environment, the average Zimbabwean worker remains short-changed. Ratification of ILO Conventions by Government should by now have seen the worker enjoying better standards in the following:
- Pension Benefits
- Social Security
- Medical Benefits
- Labour Rights
- Living Wage
- Protection against unfair labour practices
Poor Corporate Governance by employers, wrong investment decisions, personal enrichment, power hungry trade unions have all significantly contributed to this state of affairs.
Firstly it was the conversion to multiple currency in 2009. While Pension Funds had accumulated large financial reserves and property, conversion of employee accumulated benefits virtually left the worker in a “start all over again position”! Bombarded by technical jargon on pension benefits, conversions and formulae, actuarial assumptions and valuations, unclear exchange rates, the worker failed to understand what was happening and was left with no meaningful return on invested years of service. Trade unions failed to challenge conversion modalities and instead continued to levy the same percentages on worker’s salaries.There was little understanding of the value of the US dollar.
Long service awards lost their monetary value and employers began recognising service in land e.g. bicycles, wheelbarrows, watches, ties, etc. on the other hand corporate executives unrealistically highly pegged their earnings and in 2009 the surveys we carried revealed the ratio of the lowest to highest paid worker to be 1:44. From 2009 to 2015 the ratio to lowest to highest paid employee can be illustrated as follows:
This is the reality on the ground. As of March 2015 Zimbabwe had 48 operational NEC’s with lowest paying $70.00 a month and highest $595.00 per month. However, NEC average was $285.00 per month. This is compared to mega salaries by executives which range from $12 000 per month to $34 300.00 per month.
The second short-changing of the worker has been unremitted pensions, NSSA and medical aid contributions by a large number of employers due to the prevailing liquidity challenge. Serious challenges arise in the event of retrenchment, retirement, death as the meagre pensions from NSSA fall far short of the recommended ILO income displacement ratio of 80 percent.
Paradoxically the cost of running around chasing these benefits ends up being more than the paid benefit. Retirement has become export to poverty. For the lucky ones who get their pensions timeously through their banks, they have not been spared either by bank charges or administration costs!
The same trade unions who represent their members in labour disputes, do so for a huge commission thus negating the initial causes of financially rewarding the worker. Imagine an employee who is paid damages/ unpaid salaries amounting to $1 500.00, has to surrender as much as $600.00 to the Trade Union!! Of course a trade unionist must be paid for his services, but let the commission be fair and reasonable considering that the employee is also paying monthly dues.
Globalisation has brought in unseen dimensions. The new investor is averse to labour challenges and costs on one hand and our worker is struggling to get a living wage on the other hand. Focus is now on productivity rather than activity. I have no doubt in my mind that a living wage is the ultimate for the worker but this will become extremely difficult in an economy where the cost of production and cost of doing business is on the rise.
Early this year monetary authorities suggested that the best way to increase purchasing power of the worker was to reduce prices of basic commodities and services. Regrettably pricing models in Zimbabwe make this suggestion far-fetched and the only cosmetic price reduction this year has been on bread.
Going forward, one of the best remedies is dialogue and formalisation of TNF (Tripartite Negotiating Forum). Procrastination and lethargic approach to social dialogue has not done the economy good and consequently left the worker vulnerable.
We can do better if we revisit the social contract and move towards meaningful dialogue. It is along those lines that efforts must be made for Zimbabwe to move at least 30 percent as income displacement ratio for its average worker. This should apply to retirements, injury on duty etc., with that in mind hopefully in the year 2016 we might see a change in the average earnings and welfare of the Zimbabwean worker.
Zack Murerwa is a labour and economic expert and managing director of Stallone Consultancy. Feedback [email protected]
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