The Sunday Mail
AFTER the Reserve Bank of Zimbabwe (RBZ)’s recent proposal for both Government and business to consider a wage and salary freeze, it seems employers and employees are going back to the trenches, ready to defend their conflicting positions.
While employers have readily embraced the RBZ counsel, employees are railing against the proposals.
Monetary authorities believe the economy currently cannot sustain any further salary increases. The Zimbabwe Congress of Trade Union (ZCTU) is busy organising its structures, preparing to push through its position that a wage freeze cannot hold.
Most of the cases involving the tussle between employers and employees are presently parked at the Labour Court, with the former claiming that low productivity and cash shortages are making it increasingly difficult to comply with the latter’s expectations.
Confederation of Zimbabwe Industries (CZI) president Mr Charles Msipa told The Sunday Mail Business last week that it was important for salaries and prices to come down in tandem with economic performance.
“We are going through a painful period of correction in which salaries, wages and prices will have to come down whilst we improve productivity and efficiencies in order to improve our competitiveness.
“Directionally, the Governor is correct in his observations; compensation must be based on productivity and affordability by the organisation. In some organisations, employees have had to take a reduction in salaries and wages,” said Mr Msipa. He further noted that there was need for a framework to bring Government, business and labour together.
“We will achieve much more progress when all stakeholders are in agreement on fundamental issues affecting our economy, as well as our respective roles and responsibilities in resolving such issues.
“The notion of a social contract merits further investigation and attention,” explained Mr Msipa.
Grain Millers Association of Zimbabwe (GMAZ) chairman Mr Tafadzwa Musarara also said they are “fully behind the RBZ Governor’s call to freeze wages”.
Mr Musarara said a salary freeze was essential at this point as wage increments awarded by the Labour Court have been “above the US inflation rate”.
“There has been little regard to the inflation levels related to the currency we are using. We are using inflation figures higher than the South African rand in some instances and that is unsustainable.
“As manufacturers of a staple food, we are very sensitive to the plight of the consumer and of course the reaction of the Government if we were to increase the price of our commodities.
“All our products are in the inflation basket and have a ripple effect if prices were increased in response to salary hikes. For instance, if you increase the price of stock feed, it ultimately affects the cost of milk, beef, pork, chicken, you name it.
“We feel that if one goes by the Zimstats (Zimbabwe National Statistical Agency) data, inflation has generally stagnated and in some cases there has been deflation; people have been reducing prices and we don’t think that awarding wage increments based on cost of living applies because it has not gone up. In fact it has gone down and we should be talking of maintaining current salaries, if not reductions,” said Mr Musarara.
Statistics released by Zimstats last week show that prices of goods marginally decreased in January compared to the same period last year.
The year-on-year inflation rate for January 2015 as measured by the all-items Consumer Price Index (CPI) stood at -1,28 percent, shedding 0,48 percent on the December 2014 rate of 0,80 percent.
According to Zimstats, prices decreased by an average of 1,28 percent between January 2014 and January 2015.
GMAZ, which has been fiercely resisting salary increases, has of late been under fire from labour unions.
Currently, millers are fighting against a 5 percent increase on basic pay that was awarded in December last year.
Initially, the milling industry, which is thought to have about 11 000 employees, had agreed on a 4,8 percent salary increment, but it wasn’t effected as millers claimed that Government’s directive to peg the maize producer price at US$390 per tonne had seriously affected their finances.
Mr Musarara claims that continued salary adjustments are not backed by “fundamentals on the ground”.
Market watchers believe that there is need to “balance the interests of all stakeholders”. Calls for a social contract have been on the table in the past but alleged mistrust among partners resulted in the pact collapsing.
It is thought that labour at the time was too militant, while the activities of the former RBZ boss Dr Gideon Gono were viewed with suspicion by labour.
ZCTU acting secretary general Mr Gideon Shoko said labour is not happy with Dr Mangudya’s views on salary increments.
“The announcement by the Governor is problematic in that it is not inclusive. There was need to consult all stakeholders who include Government and employees,” said Mr Shoko.
One of the RBZ’s key role in the economy is to be an adviser to Government.
ZCTU is of the opinion that a salary freeze can only be acceptable when there are consultations and assurances that the price of goods and services will also be frozen. The employee representative body is generally distrustful of business.
United Food and Allied Workers Union of Zimbabwe (Ufawuz) general secretary Mr Adoniah Mutero said an arbitrary salary will be in contravention of Section 65 (1) of the Constitution which entitles workers to be paid fair and reasonable wages.
“In recent months, Zimbabwe has witnessed a price reduction in the prices of selected brands of alcohol and fuel (but) this did not translate to reduced transport fares, neither did it result in reduced costs of basic foodstuffs and accommodation.
“To this extent, the price reductions are still meaningless as they do not reflect on the most basic needs of the workers. Wage increments are meant to cushion the employees from the rising cost of living,” said Mr Mutero.
Mr Mutero said issues such as water and power cuts, high cost of raw materials and excessive taxation as well as the influx of cheap alternatives from outside the country needed urgent attention.
