The Sunday Mail
There has been a huge debate ever since labour’s “Black Friday” (July 17, 2015) when the Supreme Court ruling on job termination created a tipping point of its own.
Edmore Mudavanhu
There had been a few terminations just after the High Court ruling, but most companies decided to wait for the Supreme Court to bring finality to the issue.
Arguments in the legal sphere over Zuva Petroleum and its two former managers ended up having a profound effect on several companies, families and even the Government far beyond what normally would happen in a company-versus-employee legal battle.
When one looks closely at this issue, it will become clear that we were already in this situation several years before the Supreme Court ruling.
Companies were failing to find ways to cut down employment costs without retrenching. Several court cases of unfair dismissals have taken years to resolve.
The seeds of Black Friday were sown two decades ago when the economy started going down as Foreign Direct Investment fell, IMF support slowed and local capacity utilisation sank.
In such situations, the only alternative for growth is innovation.
Even South Africa’s competitiveness has in the last 60 years declined on a global scale because of limited innovation.
But South Africa is way ahead of us in export potential, meaning we have fallen even further on the competitiveness scale.
When innovation fails, management looks at cost-cutting to a rebound, but, again, this is not sustainable.
We have travelled this route before; it is littered with corporate graves.
Several employees were thrown onto the streets in the 1990s, but that still did not bring the desired results.
Legal experts argue that the common law position cannot be used where the reasons for dismissal are structural alignment.
It is apparent that for many employers, the reasons for sackings are structural alignment and cost-cutting, which are covered by retrenchment procedures.
This opens the door to legal battles with employees.
The legal battle will likely end with retrenchment.
Whenever there is an epidemic, some threads in the trends are difficult to understand because current events follow prior events, justifying similar future events.
Everyone joins the bandwagon without considering implications of decisions taken.
The Zuva Petroleum case is leading us to a period of rethink, which we need to fully utilise.
Companies can still consider retrenchment so that sackings do not take much of the energy that should be channelled into business rethink.
Focusing on labour relations alone as a solution to business issues is not sustainable, even in the short term.
Labour Relations are meant to lubricate relationships between employers and employees.
Together with the Companies Act, they help create a formal organisation.
But we also need to take note that Labour Relations make innovation and competitiveness possible.
Companies need strategies to leap out of the current challenges beyond cost-cutting. That way, we remain competitive as a nation.
It is this competitiveness that will lead us to success.
The common law position is a legal loophole that has created an unforeseen epidemic.
Great strides have been made over the past seven years in terms of interaction among Government, Labour and Business. What we only need now is more interaction among these parties to ensure we close all gaps.
The “Black Friday” ruling has thrown several people onto the streets and we are likely to see more retrenchments even way after the amendments because of capacity utilisation constraints in our industries.
That means it is possible to shrink further if we do not adopt a positive mindset and fight the issue head on.
The issue is lack of innovation framework structures across all the three Tripartite Negotiating Forum domains.
With lack of innovation, we will depend more on the law for economic order.
We need to discuss issues more so that every month, we build more potential for our economic success.
When the epidemic caught on, the sackings happened very fast and many companies lost great human capital potential.
The sackings were quick and so there was not enough time for a clear analysis on who should stay and who should go and many companies lost great potential.
Some employees that could have possibly been moved around to create effective and collaborative teams were sacked.
For the surviving workers, the psychological contract of trust between the employers and employees is also broken.
The workers now only work for the sake of survival and without sufficient motivation because of uncertainty.
The surviving employees have to be educated on the proposed Labour Relations Act amendments to retain their commitment.
The unions need to survive for the employer–employee relationships to survive.
The Public Service, Labour and Social Welfare Ministry has done a lot of work with employer and labour federations.
That work shouldn’t be in vain. We should build on macro-labour relations strengths of many years so that we now focus on business re-engineering and innovation.
It is good news the amendments will sail fast through Parliament to ensure stability.
The situation can be rescued with continuous TNF dialogue in informal and formal environments. Dialogue improves our thinking, mindsets and worldview.
Edmore Mudavanhu is a Human Resources expert based in Harare, and the Convenor of the Bi-Annual Business and Labour Symposium
