The Sunday Mail
Companies which fired workers after the Supreme Court ruled that employers could terminate employment contracts on notice are sweating over an impending backlash from ex-workers demanding their retrenchment packages as prescribed by the new Labour Act, it has emerged.
Over 20 000 workers are estimated to have lost their jobs without packages following the ruling which was made by Chief Justice Godfrey Chidyausiku together with four other judges in a case in which two former Zuva Petroleum workers were challenging termination of their employment contracts on notice.
The ruling has since been overturned after the Labour Act was amended to prevent further job losses as well as providing compensation for affected individuals.
The new Act provides that all workers who lost their jobs as a result of the ruling are eligible for retrenchment packages of two weeks’ salary for every year of service. Clause 18 of the Act reads: “Section 12 of this Act applies to every employee whose services were terminated on three months’ notice on or after the 17th of July, 2015.”
As such, Section 12c(2) clearly state the minimum retrenchment package that should be paid out to employees upon retrenchment or termination of a non-fixed employment contract.
“A package (herein after called a minimum retrenchment package) of not less than one months’ salary or wages for every two years of service as an employee (or the equivalent lesser proportion of one months’ salary or wages for a lesser period of service) shall be paid by the employer as compensation for loss of employment (whether the loss of employment is occasioned by retrenchment or by virtue of termination of employment pursuant to Section 12(4) (a), (b), or (c), no later than the date when the notice of termination of employment takes effect.”
Nonetheless, almost two months after companies terminated employees’ contracts on three months’ notices, many of them have not yet paid ex-workers their dues.
Employers and employees alike have already sounded their dissatisfaction with some clauses of the new law saying they were not properly consulted during the formulation of the Act.
It is in the wake of the ongoing tiff that employees have accused employers of deliberately ignoring the law by stalling on paying the dismissed workers their packages.
The Zimbabwe Congress of Trade Unions (ZCTU) secretary-general, Japhet Moyo, said companies have assumed a wait-and-see approach, at the expense of dismissed workers.
“So far we have not heard of any of our members who have been paid, we only have a case of an employer who actually evaded paying packages by recalling workers back to work,” he said.
“Employers have taken a wait-and-see attitude, if anything, they are ignoring the law. However, for now we are not contemplating going to court because we still want to negotiate. Instead, we are encouraging our members who have not received their payments to lodge their complaints with the National Employment Council (NEC).
“It is the resolutions from NEC which will determine whether the individual cases will be handled by the courts.”
Analysts dispute the notion that companies are deliberately ignoring the law. They premise this argument on the fact that many firms are cash-strapped and are unable to pay.
Many companies are, however, understood to be rattled with the idea of paying all the dismissed workers as some of them were long-serving members who would claim huge amounts as their packages.
Indications are that parastatals may be the worst affected should the law be applied rigidly.
Economist Mr Christopher Mugaga said some companies may have to close down if they are made to pay the packages.
“There is no money. Companies simply do not have the money to pay because they are struggling,” he said. “The same reason that made them to dismiss workers is the same reason they will find it hard to pay retrenchments. So to say companies are ignoring the law is not a true statement because the money is not there. We need to be pragmatic when dealing with the issues of labour because there can easily be a bigger crisis than we anticipate.”
Employers Confederation of Zimbabwe (Emcoz) executive director, Mr John Mufukare, denied that business is in a panic mode saying the notion is an exaggeration.
“Whilst there is consternation among employers because of the lack of liquidity in our economy, descriptions of panic and sweating is probably an exaggeration,” he said.
Mr Mufukare admitted that it will be difficult for most of the companies to pay the packages adding that he is not sure if there are any companies which have already done so.
“While it is difficult to speak on behalf of Individual companies as conditions obviously differ, it is common cause that the economy is suffering severe liquidity constraints. It will be fair, therefore, to assume that most companies will have difficulty in paying the said benefits.
“While some had started processing payments, the gazzeting of the Labour Amendment Act which made terminations illegal has tended to cause confusion and members are seeking legal advice.”
Mr Mufukure also revealed that business held a consultative meeting last week to interrogate Government on the thinking behind some of the provisions of the Labour Amendment Act.
“It was a good meeting and business leaders met on Tuesday with legal advisers to chart the way forward. The President of Emcoz will be making an announcement on the decision taken.”
Some experts say the latest Labour Act lacks international standards and advised that it should be amended before it can be aligned with the new Constitution.
The International Labour Organisation (ILO) offered to help Zimbabwe match international standards as indicated by ILO assistant director-general and regional director for Africa, Mr Aeneas Chapinga Chuma, in his recent visit to the country.
This comes at time when tripartite partners, which are the Government, employers and labour are not in accord.
“He (Chapinga Chuma) expressed ILO’s readiness to provide technical assistance through sharing international good practices on Labour Law Reform processes in line with international labour standards and the comments of the ILO Supervisory Bodies.
“The ILO is also ready to support capacity building initiatives for the tripartite partners to constructively engage their constituents in the reform process,” reads the ILO statement.
