Insight into Zim’s labour laws

THE recent landmark judgements by the Supreme Court pertaining the dismissal and welfare of workers has put back into the spotlight the need to immediately revamp the country’s labour laws.

The developments have since settled the raging debate in the labour matrix as to whose side of the bargain was the law biased towards.

This, experts say, indicate the immediacy of the need, to ratify the laws, which will culminate in both the employee and the employer attaining a win-win situation.

Disciples of the labour law reform gospel have been saying the ratification of the law will further prevent the exploitation of either part in future.

Unfortunately after the Supreme Court judgement, close to 9 000 workers have since lost their jobs in less than a month.

In reality, all stakeholders in the job market have been singing the same chorus for a very long time, in a bid to have the obtaining labour laws, which they labelled as among the worst in the developing countries overhauled.

Labour issues in Zimbabwe are still regulated by the Labour Act (Chapter 28:01), which used to be called the Labour Relations Act.

Who benefited from the obtaining labour laws?

Some would want to argue that the main purpose of the Act was meant to define fundamental rights of the employee, in accordance with the international obligations the country ratified, but some sections of the labour matrix argue to the contrary.

In essence, they say no-one among the protagonists seems to have immensely benefited from this piece of legislation.

They say that over the years, the laws have remained rigid both from an employer and employee perspective, in the process contributing clandestinely to the rundown of several industries.

Now, the very same law has led to the dismissal of about 9 000 workers within a four-week period.

In turn, this has negatively impacted on investor confidence, who often view directing their finances in recapitalising the local industry as a high risk area because of such inconsistencies.

Some have predicted doom for the country, should it fail to address this labour issue as early as possible.

They argue that the country’s envisaged dream of increasing capacity utilisation in local industries will be far-fetched.

They state that capacity utilisation often requires rendering some parts of non-core activities of labour, redundant which of late has not been possible until the recent turn of events at the Supreme Court.

The need for re-alignment of labour laws

Economist Mr Dave Mukachana said the country’s labour laws needed to be re-aligned in line with obtaining global trends.

“The country’s labour laws are so skewed to the extent that an individual can go to the courts and be given the entire chunk of a company, in the process rendering thousands of his fellow workmates jobless,” he said.

He cited the fate of major manufacturing companies like Steel-net, General Bolt, Cairns et al where their recurring problems emanated as a result of confrontation between employers and employees.

The companies had their properties attached and sold after litigation by workers over non-payment of dues.

He said there is also the case of Zimbabwe Revenue Authority (Zimra) managers who were deemed to have been unjustifiably relieved of their duties and they went on to be awarded US$100 000 each by the arbitrary courts.

He said it was only in Zimbabwe until recently, where employers had the power to hire only, but lacked the power to fire, contrary to what is taking place even in developed countries like China and the United States of America where the employer possessed both powers (to hire and fire).

“In those countries, if companies go under a period where they endure low levels of production, the employer had an obligation to fire, backed by legal statutes,” he said.

Another economist Mr Brains Muchemwa said the emergency exit route that allows companies to give flexible and affordable notice to terminate contracts may, therefore, be the answer to nurturing an environment that will eventually create more jobs and up productivity for the economy.

“Surely this is better and more progressive than the rigid and arduous processes that, in pursuit of imaginary justice to please a select group, may eventually leave the whole country with corporate tombstones and a frustrated mass without jobs,” he said.

Mr Muchemwa said the sad stories at Ziscosteel, National Railways of Zimbabwe and the Cold Storage Commission, among many other parastatals that are carrying huge unproductive labour burdens, have been among the major contributing factors that have seen parastatals making losses, as reported recently in some sections of the media, in excess of $470 million since 2012.

“And surely that is not a small leakage for a country that rakes in around $3,8 billion in government revenue annually,” he said.

Is the Zimbabwean worker overpaid for doing nothing?

Economist Mr Dave Mukachana said employers must be vested with powers to fire, just like the way they have powers to recruit.

“That is the reason why there is rampant casualisation of work among employers so that no-one becomes permanent, because the time one becomes permanent, it becomes a pseudo marriage contract,” he said.

“When you fire an individual, he will have to take the arm of the company with him like three months salary, number of years served and severance packages, before the recent judgement at the Supreme Court came into effect.”

Mr Mukachana argued that local labour was being overpaid as it was useless and unskilled.

“In reality, we do not have skilled labour, because when we look at skilled labour, we will be looking at productivity.”

“For instance, we look at how many hours does it take for a local company to produce a simple thing such as a shirt, compared with other line industries elsewhere,” he said.

He said the laws encouraged workers to be lazy and were not flexible on the part of the company.

The county’s Labour laws: the background

But Mr Rodgers Matsikidze, who is a senior partner at Matsikidze and Mucheche legal practitioners, said the Labour Act should be understood in the context of colonialism and common law.

He said that in common law, the employer enjoyed unlimited rights in labour matters, in determining contracts and termination methods of an employment contract.

“In 1905, the then colonial government introduced piece of legislation known as the Master and Servant Ordinance,” he said.

He cited the promise by the nationalists to repeal the Master and Servant Ordinance as one of the push factors which led to the joining of the liberation struggle by workers en-masse.

“The main reason the workers joined the liberation struggle was the promise from nationalists that once there is independence, legislation such as master and servant ordinance was going to be done away with.”

He then cited the scenario soon after independence when the country witnessed a wave of strikes such as the infamous Shamva and Hwange strikes as workers became impatient and clamoured for immediate reforms to the labour laws.

In 1985, the Labour Relations Act came into effect and its objective was to declare and define fundamental rights of employees, to give effect to international obligations.

“Hence, some would argue that the Labour Act was promulgated to balance work relations and sought also to protect the interests of the employee.

“From this vantage position, one would say that the labour system is now state corporatist as opposed to the unitary one which subsisted during the pre-colonial times,” he said.

Mr Matsikidze said although the legislation gazetted then had its own loopholes, the envisaged aim was to ensure job security for the majority of blacks who had been freed from colonial bondage, from the white post-colonial employers who were still holding on to the levers of the economy. General outlook of the labour laws

But labour law expert, Mr Isaac Mazanhi, said the general outlook of the labour laws is when we look at barriers to entrance and barriers to exit, where it should be easy for an individual to get into business and vice-versa. He says certain provisions of the act like the one for dismissal in Chapter 12, makes it a cumbersome process whether an employee is being fired for misconduct or for operational reasons.

“The other provision is on the casualisation of the labour where the law states that an employee retained for six consecutive weeks for four months, automatically becomes a permanent employee,” he said.

“To terminate their employment, you will have to retrench them and this translates to the inflexibility of our law in promoting employment.”

He said business goes through a cycle where sometimes there will be a boom and other times the business goes down.

“Thus an employer must be able to adjust the manpower needs to suit the situation, but in Zimbabwe even if the business goes down, the employer is stuck with the workers,” he argued.

The other provision cited by most of the employers is the issue of retrenchment, where there is need for an agreement between the employers and employees before it is undertaken.

Although the law is clear when it states that the impact must be mitigated when the process is unavoidable, what has been cited as the major problem are the huge awards which are most often awarded to individuals by the arbitration courts.

So, was the employer failing to retrench as a result of exorbitant costs of retrenching even if the business was going down?

In South Africa and the United Kingdom, there is a standard package which is offered at retrenchment, which is contrary to what happens in Zimbabwe.

In the country, there are many examples that can be cited where companies have failed to retrench as a result of the exorbitant amounts involved.

The case which easily comes to the mind is the Air Zimbabwe scenario, where the company was stuck with more than 409 workers it needed to lay off for non-viability problems since August 2009.

Those workers are still on the payroll of the national career.

There is also the Bindura Nickel Corporation (BNC) case, where the mining giant wanted to retrench 2 200 workers about five years ago.

The retrenchment board came up with a package of $15 million, but the market capitalisation for BNC that time was around half the severance packages offered by the board, which was also the case at National Tyre Services.

Can a 50-50 basis be achievable?

But from the arguments above, it is clear that there is greater need for the revamp of the country’s labour laws, which in earnest has been taking place ever since the formation of the tripartite negotiating forum which comprises labour, government and the employer. Among other things, the coming together sought to put the major three players on the same pedestal, and also ensure that both parts are cushioned against the effect of poverty in the event of a separation.

Already the Minister of Public Service and Labour, Cde Prisca Mupfumira, has said Government is already seized with the matter in a view to amend the law.

President Mugabe addressing the gathering at the official opening of the Global Small and Medium Enterprises Expo said Government is working fast on amending the labour law describing it as unjust.