The amendment of the labour laws expected early next year will significantly increase the number of retrenchments, the Zimbabwe Congress of Trade Unions (ZCTU) has warned.
Government will soon amend the country’s labour laws, making it easier for employers to retrench employees when facing viability problems. In 2014 alone more than 6 000 workers were laid off with at least 52 companies retrenching employees.
Grain Marketing Board, Zimbabwe Fertiliser Company, Nissan Zimbabwe, PG Industries, First Mutual, Tristar Insurance, Cargill, Beta Bricks, Tetrad Investment Bank, Stewart Bank, CFI Holdings and Metbank are some of the companies that have laid off.
Other companies and organisations which have retrenched workers, Moyo said, are Meikles Hotel, Rainbow Tourism Group, Telone, Australian Embassy, Mike Appel, Rufaro Marketing, Pearl Properties, Celsys Ltd, Minerva Risk Advisory, Spar Letombo, Innscor Bread Company, Jacob Bethel and Montana Meats.
ZCTU secretary general Japhet Moyo told businessdigest on Monday that the amendments has the potential of wrecking havoc on the formal employment sector.
“It (exercise of labour laws amendments) is going to burden the government as the increased number of people retrenched will depend on social welfare,” Moyo said. “The flexibility we are talking about is going to destroy more jobs. We are barking up the wrong tree.”
However, Employers Confederation of Zimbabwe executive director John Mufukare said it was better for companies to downsize operations through retrenchments than close shop altogether.
“It is better to have companies running at a reduced level than have companies folding altogether,” said Mufukare.
He said the new labour amendments would be biased “towards productivity and competitiveness.”
Mufukare said the National Employment Council, which failed to agree on minimum wages in 2014, should now focus on 2015 and the future.
“The year 2014 is gone and we are definitely not going back,” Mufukare said. “Negotiations should be in relation to 2015 informed by what we have produced.”
He added that the current economic bottlenecks, which include a debilitating liquidity crunch and low capacity utilisation, made it impossible for employers to even consider paying poverty datum linked wages.
Mufukare said that retrenchments would continue unabated unless government puts in place policies that are not only consistent, but will also encourage foreign direct investment and economic growth.