Zimbabwe News and Internet Radio

We’ve no capacity to pay workers packages: CZI

By Auxilia Katongomara

The Confederation of Zimbabwe Industries yesterday said employers have “no capacity” to pay packages to some 25,000 workers they dismissed on three months notice in terms of the July 17 Supreme Court ruling.

CZI president Busisa Moyo
CZI president Busisa Moyo

Clause 5 of the Labour Amendment Bill that President Robert Mugabe signed into law on Wednesday says employers who dismissed workers since July 17 must pay them packages equivalent to two weeks wages for every year served.

In other words those who lose or those who lost their jobs on contract termination over the past two months are entitled to minimum retrenchment benefits that include one month’s salary for every two years of service.

But workers welcomed the new law saying it had brought relief to them as it prevents employers from firing them easily and cheaply.

The new law will apply to both retrenchees in general and workers whose contracts were terminated on or after July 17, with employers required to pay up “no later than the date when the notice of termination of employment takes effect”.

CZI president Busisa Moyo said the law could lead to more companies closing shop as they struggled to pay off scores of dismissed workers.

Speaking to Chronicle yesterday, Moyo said his organisation and its members had concerns about the effects of the new bill.

“Companies don’t have the capacity to pay all the workers. We know it’s the law but it could set a chain of events which could affect more workers in the country as companies struggled to pay both dismissed and on-duty workers.

“As an organisation, we’re engaging our members to see what can be done in order to save industry from collapsing,” said Moyo.

He said the provision by the law to compensate workers in retrospect following their dismissal using common law was not properly looked into.

“The impact of this wasn’t correctly analysed when it was taken to the President. Our first concern is the retrospective aspect and the second being the period prior to 2009.

“Are we going to pay in Zim dollars the years that one worked during that era? We need clarification on that because all our accounts have been converted from the Zim dollar accounts.

“Some rendered their service prior to 2009, how do we handle that?” said Moyo. He said given the prevailing economic situation in the country, most companies particularly in the manufacturing industry had raised concern about the effects of the new law.

“We’re really concerned that more companies might close, this will then scare away investors and those supporting certain programmes. “How then do we attract investors? We’re still consulting our member bodies on how we can help each other,” said Moyo.

Zimbabwe Federation of Trade Unions secretary for economic affairs, Jacob Rice, while welcoming the law, said the dismissed workers were still at the mercy of their employers.

“Employers as their nature will always remain militant; here we’re talking to a cow that has already been milked so we can’t expect much. I foresee a situation which will open flood gates of litigation, a catch 22 situation because the employers will use all the delaying tactics as possible to frustrate the workers as they demand their dues.”

He said of the new Act:

“It has brought some relief, it’s not as good as we wanted it to be.”

President Mugabe approved the Labour Amendment Bill, to repeal common law provisions that had been used by employers to fire workers on three months’ notice, in a development that will bring relief to workers who were being sent home empty handed.

The law was fast-tracked through Parliament, sailing through both the National Assembly and the Senate within a week as the executive sought to end the trail of job losses following the July 17 Supreme Court ruling that unions say employers took advantage of to sack more than 25,000 workers.

“We must remove common law provisions that have been used by employers to unilaterally dismiss workers on notice, sending them home empty handed. This is intended to be a win-win outcome for business and labour in the true spirit of smart partnerships,” said President Mugabe.

“The labour reforms are part of the raft of policy measures and legislation being pursued by the government to improve the Ease of Doing Business environment.” The Chronicle