adminLabour Matters Davies Ndumiso Sibanda
While a lot has been said about delayed or unpaid wages and possible solutions proposed, the problem of delayed or unpaid wages is worsening every month as organisations struggle to pay wages.
While it is a fact that it is unlawful for an employer to fail to pay workers’ wages and workers have a right to litigate if their wages have not been paid on time, the present environment presents complications for workers who try to litigate so that they are paid their wages.
It must be noted that when parliament legislated years ago, nobody anticipated that the economy would shrink to levels we have reached, and that business capacity utilisation will fall below forty percent. Where employers will be in wage arrears going back two years and many other economic challenges, legislation that was crafted was to meet yesterday’s needs and today’s needs. Labour legislation has lagged behind leaving employers and workers to do what is best to keep business afloat and workers alive.
The present Labour Act is dwarfed by the issues related to wage payment delays, underperformance of business, working capital shortages and collapse of businesses. For example, present measures to avoid retrenchment are not helpful as they do not help the businesses recover or help save jobs but evidence on the ground has shown that the majority of those businesses that have opted for measures to avoid retrenchment as given in Labour Act have eventually collapsed leaving behind huge debts and workers going home empty handed.
Those workers who have tried to litigate to get paid outstanding wages paid have pushed businesses into Judicial Management in order to protect businesses from having assets seized and sold to pay workers and other creditors. This route gives the business some breathing space however, in the end not all businesses survive as many end up liquidated with workers going home empty handed and investors losing their investment.
Many trade unions have also not helped the situation by wrongly advising workers on how to navigate this difficult environment. They lead workers in wage payment related wildcat collective job action further compromising the little production that is taking place and pushing the few remaining customers away permanently as they hedge against suppliers who are unreliable. These unions are not sensitive to the desperate position of business thus they lead workers to act in a manner that leaves everybody a loser.
Employers on their part have failed to recognise that there is need for paradigm shift and abandon human resources managers who do not have a head for total business management and who have no sound labour relations skills and a solid knowledge of labour law. The present environment calls for more that application of labour laws but calls for effective environment change responsive labour relations management.
I am of the view that the two major survival institutions are the works councils and NECs where the Labour Act has given employers and workers very wide ranging powers to negotiate collective bargaining agreements covering virtually all aspects of the business.
I believe organisations and industries that will survive this economic roller-coaster from a labour relations perspective are those that have strengthened the operations of the works council and those that have adequately resourced and utilised the National Employment Councils.
Going back to delayed wages, I believe litigation does not help the parties much as we have seen many arbitration awards ordering employers to pay workers back pay by certain dates. Employers have responded by appealing the awards as unreasonable considering the organisation’s ability to pay. In the end the parties sober up and negotiate reasonable payment plans that serve both the interests of workers and employers.
There is a need for robust negotiations at works council where parties are open with each other on how wage arrears shall be settled and there must be a means of how the money will be generated and how workers will be paid.
Like stated in one of my earlier articles, unions should advise workers correctly on the future of business and should avoid lying to workers using tired stories like, “the employer is hiding money or this company will never close”. Where the business is sinking, workers should be advised to negotiate packages that are realistic in the circumstances. The sad thing is that a large number of workers crying about wage arrears have hope that one day they will be paid their back pay yet the business they work for has no capacity to recover and pay back pay and nobody is brave enough to tell the workers the truth until the business folds.
Employers as well should not be cruel to workers by giving workers false hope that the business will recover when they know very well that the business is collapsing only to have the workers read in the newspapers that the business is being liquidated.
In conclusion, there are cases where business will recover and wage arrears get paid but there are also many organisations where wage arrears will never be paid as businesses collapse, it’s therefore important for employees to use sound judgment and decide to hold on or abandon the ship and move on while counting their losses. A painful statement but true one.
Davies Ndumiso Sibanda can be contacted on: email: [email protected]
Or cell No: 0772 375 235
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