Shifting focus to flexibility issues

Maxwell Parakokwa
Much has been said over the last few weeks concerning labour law reform in this country. It is clear that there is both excitement and apprehension over the matter.

The central-most feature of the debate has been on labour market flexibility or the “flexibility” of labour laws to industry’s viability and competitiveness concerns.

Many would know that there have been two major reviews of labour laws in Zimbabwe since 1985, when we had our first comprehensive post-independence labour code, that is in 1992 and 2002. These reforms are mostly remembered for having radically changed the wage determination system, the manner of termination of employment contracts and the ushering in of a new system of dispute resolution through conciliation and arbitration.

As a result, the features of labour relations are currently as follows:
Minimum wages are no longer determined by Government but mostly by sector-based Employment Councils and enterprise-level works councils.

Dismissals are no longer done by Labour Officers but by the employers themselves through Employment Council codes of conduct, company codes of conduct or the national code (SI 115 of 2006).

Disputes that arise between parties are subject to conciliation, where the disputing parties have all the power for settlement, rather than determination or arbitration at the first instance.

A system of independent arbitrators is currently in place, with the objective of expediting the resolution of labour disputes. These are some of the achievements over the years. They are genuine achievements because through these historical reforms, the Labour Act has managed to reduce the effect of Government bureaucracy in industrial relations.

The idea has always been to continually improve labour market efficiency, industrial harmony and productivity. The Labour Act has always been an instrument through which the tripartite parties, Government, labour and business, can achieve greater economic growth, as well as social justice.

It should come as no surprise that Government has desired that the ongoing Labour Law Reform should play a key role in the achievement of economic growth under the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset).

The great rights that workers enjoy under the Labour Act such as rights to collective bargaining, maternity leave, etc, can only be enjoyed by those in mainstream employment, usually that is formal employment.

That group is the “super minority”, as a fraction of the entire labour force.
The real goal is to see the currently employed keeping their jobs, to see the retrenched recovering their jobs, and to see the unemployed finding productive jobs. My view is that Government wants to see the Labour Act play a role in making these gains possible, taking it as given that both business and labour are partakers in this effort.

In this process, all parties must offer credible arguments and proposals. Is it correct to say that industry has collapsed chiefly because of high labour costs? Is it true that workers in Zimbabwe are paid for mere presence rather than for performance?

Trully speaking, these assertions are too simplistic, fallacious and rather emotional. They can only fail to excite real debate on the pertinent matters, many of which lie beyond the labour market.

Thus, it is necessary to dispel some of the myths that threaten further progress, especially with respect to “flexibility”.

Some stakeholders appear to believe that flexibility has no place in labour law-making. Yet, the history of labour reforms in this country is anchored on flexibilisation.

The gains from the reforms to the 1985 paradigm confirm this standpoint. Other aspects of labour market flexibility include the possibility of exemption from Employment Council minimum wages on grounds of inability to pay.

Employers in Zimbabwe can choose from a wide regime of employment contracts, that is permanent employment, casual or fixed term contracts, in all cases at the employer’s discretion.

However, an interrogation of the current retrenchment laws can aid further reflection on the flexibility debate. The current Labour Act does not give a minimum or benchmark package for retrenchment.

Everything, with the exception of statutory benefits, is subject to negotiation by the employer and employees at works council, Employment Council or Retrenchment Board levels.

The negotiation aspect is perhaps understandable, given that reasons for retrenchment usually vary from viability concerns (inability to pay), to company reorganisation/restructuring, etc.

Nevertheless, the present scenario makes it difficult for employers to budget for the retrenchment exercise; one never knows how much is at stake until the process ends.
Furthermore, one can never be any sure for how much longer those targeted for retrenchment would remain employees as the negotiation process can be lengthy.

This reality has seen more and more employees being engaged on rather precarious terms such as casuals or fixed terms, even for work that is permanent in nature. Employers generally attempt to escape the so-called burdens associated with retrenchment exercises in a context of economic uncertainty.

Clearly, these challenges need to be addressed by introducing more clear-cut provisions in our labour laws, on retrenchments as an example. Does this mean taking away the rights of the workers? Obviously not.

Apart from the raging flexibility debate, the ongoing reforms are in fact quite comprehensive. Aspects to do with harmonisation with the new Constitution are also under consideration.

The other aspects of the reform process focus on improving collective bargaining processes, providing for better guarantees to freedom of association in the world of work, etc. Going by progress to date, there appears to be general consensus among Government, workers and employers on the way forward vis-a-vis harmonisation with our new Constitution.

Although the reform process has been on the table for quite some time now, it is notable that there is as yet no finality to the consultative process.

Unlike most laws, labour law is quite dynamic as it perpetually attempts to maintain a balance between the competing interests of three major social and economic players, which are Government, labour and business.

The form and content of labour law is ultimately not the preserve of any one party. Labour law is the result of a tight contest between Government and the social partners.

On the one hand, labour law protects the interests of capital as a source of wealth and means of production. The idea is to have legislation that nurtures entrepreneurial capacity, facilitates employment and promotes economic growth.

On the other hand, labour law takes the standpoint that “labour is not a commodity” but a human factor of production that possesses rights and obligations. It is important to note that Government will always need to ensure a minimum floor of social protection.

Government also needs to ensure efficient labour markets that promote economic growth especially through delegation of authority to other labour market institutions such as works councils, Employment Councils and independent arbitrators, among others.

Consequently, it is essential to note that labour law is a negotiated outcome in a situation where “no winner takes all”. Labour law cannot be wholly rights centred – neither can it be wholly market-oriented. With reference to the new Constitution and the Zim Asset blueprint, my view is that Government is well-placed to expedite the labour law reform process and bring it to finality.

It is in this context that the ongoing debate over this subject should be welcomed. It is anticipated that future interventions, especially from business and labour, will be practical enough to create conditions suitable to having a “super majority” of the labour force in the workplace.

For Government, the labour market is but one of many dimensions that need close attention.

Maxwell Parakokwa is a Principal Labour Officer at the Ministry of Public Service, Labour and Social Welfare

1,788 total views, no views today

  • Elizabeth Griffiths

    This is an eye-opening article on the Labor law review. Well done Mr. Parakokwa. Going forwards, the view should be towards ensuring that the majority of the workforce is in formal employment- registered entrepreneurships in order to enjoy the gains of this Act and to garner socio-economic growth. This of course may be beyond the scope of Labor policy administration. Debatable as it is, the scope of this “Flexibility” approach taken by the Ministry of Public Service, Labor and Social Welfare in the Labor Act review can be considered in technical improvements of other ministries.