Jitters Over New Labour Law, As Mugabe Recalls Parliament

By Sij Ncube

Harare, August 16, 2015 – President Robert Mugabe has recalled parliament from its annual recess ostensibly to rail-road amendments to the Labour Act which among other things seeks to compensate fired workers but fears abound the changes could result in more company closures, liquidation and judiciary management.

Mugabe gazetted the Labour Amendment Bill Friday.

However the bi-cameral parliament in which Zanu (PF) has a clear majority is expected to rubber-stamp it into law “soon”.

Critics say they do not expect any meaningful debate in both houses as the amendments to the labour law were drafted and approved by Mugabe and his Zanu PF cabinet.

Amendments to the labour act come hardly a month after the Supreme Court ruled that employers are within their rights to fire workers on three-month notice without benefits, resulting in more than 20 000 workers thrown into the streets in less than a month.

But in desperate attempts to salvage the situation, Mugabe’s administration has moved with speed to cobble up amendment to stem further job losses as well as to ensure that employers are compensation, much to the delight of the influential Zimbabwe Congress of Trade Unions.

There is however, a general consensus among business, industry and commerce executives canvased by VOP that the new law could further collapse companies and spark further jobs.

The executives point out that most struggling firms have no financial wherewithal to pay any form of compensation, saying even the three months salaries and lieu of leave given to employees dismissed on or after the 17 July Supreme Court ruling was bleeding cash-strapped companies.

Busisa Moyo, the president of the Confederation of Zimbabwe Industries, believes the amendments do not augur well for businesses and industry particularly regarding payment of compensation.

“While government is trying to avert mass dismissals these provisions in the proposed new law will leave companies broke, a situation that will then lead to company closures due to liquidations and company shut downs because companies do not have the cash to pay compensation,” said Moyo.

 Labour law expert Munyaradzi Gwisai described the proposed amendments as a deceptive, dangerous and neoliberal legislation that will escalate the loss of jobs by workers, not just for today but well into the future.

“The supposed reprieve it gives the 20 000 dismissed workers is cosmetic. They will now get a retrenchment package… but only of two weeks’ salary for every year of service. This means a worker of six years’ service will only get three months’ salary,” said Gwisai.

He added that there is no difference with what the Supreme Court ruled in Nyamande and Donga vs Zuva Petroleum (Pvt) Ltd, in the July 17, 2015 judgement which sparked the waves of joblessness estimated at 20 000 by the trade unions.

Gwisai says whereas currently were workers and employers disagreed in the Works Council the dispute was referred to the Retrenchment Board. The Board on average gave a retrenchment package of 1 to 2 months’ salary as service pay; plus 3 to 6 months as severance pay; plus 1 month salary as relocation allowance.

The first version of the Bill had provided that Works Councils and Employment Councils were to prescribe standard retrenchment packages.

But this has been removed under HB 7 of 2015, which states that in case of disagreement, all the employer has to pay is service pay of 2 weeks’ pay for every year of service, but no severance pay or relocation allowance.

“This is going to be disastrous for workers and the poor. Thousands more jobs are going to be massacred after the Bill becomes law. The Bill is part of the general neoliberal war by this government against workers, vendors, rural farmers, students, residents and the poor.

“Also in preparation for massive attacks on government workers, the Bill does not provide for harmonization of the Labour Act and Public Service Act, so that workers in the public and private sectors are covered by one law, as called for by the new Constitution. The government and employers have been encouraged to escalate their attacks on workers because of the weak and divided response of workers and the unions. “

Maxwell Saungweme, a development analyst, says in terms of easy of doing business on which Zimbabwe is one of the worst countries any laws that force employers not to have flexibility to mobilise resources and do away with resources they don’t need make doing business difficult and investors look at this and will dissuaded to invest in Zimbabwe compared to other countries in the region such as South Africa and Mozambique.

“The provisions of the new bill however are not very different from the old one. This time employers are now required to give three months package. But the question is if what help will that bring in an economy like ours where jobs are hard to come by. On a different perspective labour laws alone cannot resolve the unemployment issues and poverty. We need the government to be serious in dealing with unemployment and poverty through creation of conducive environment for investors to come to Zimbabwe. They too seriously address issues such as corruption, property rights and rule of law- these can’t be addressed by labour law reforms,” said Saungweme.

Jacob Mafume, a lawyer and spokesperson for MDC Renewal Team, said despite tinkering with the labour law, the government has created conditions where business is not viable in Zimbabwe through corruption and “bone throwing policy formulation which simply works to try to plug holes in a leaking bucket.”

“The bill does not do much to protect the workers as many of them will get less than what retrenchment packages have been offering of late. The bill does not harmonise labour leaving public sector workers exposed to firing by notice under common law,” said Mafume.