Job carnage at Ziscosteel

After enduring years of hardships with the hope that government would one day find a suitable suitor capable of extinguishing their worries, the more than 3 000 workers at the moribund Zimbabwe Iron and Steel Company (ZISCO) have now been left out in the cold after being abandoned by their hypothetical saviour.

Finance Minister, Patrick Chinamasa, announced in his National Budget a fortnight ago that government would this month terminate contracts of ZISCO employees.

Chinamasa, who is at the forefront of implementing austerity measures prescribed by the International Monetary Fund and the World Bank to rekindle the country’s economy that has been on slippery slope for over a decade, is wielding the axe on ZISCO workers in order to attract elusive fresh capital into the giant steelworks.

“Central to this will be the need to free the ZISCO balance sheet of historical baggage liabilities; including an accumulation of new obligations with regards to wages that arise on account of workers that are not producing anything and are actually sitting at home or pursuing other engagements. Accordingly, all contracts for ZISCO employees will be terminated on a three months’ notice,” said Chinamasa.

As part of the plan, government will take over the steel making firm’s debts.
With government pleading bankruptcy to its creditors, the take-over of ZISCO debts will remain a book entry, with no hard cash changing hands.

The workers might therefore wait forever to get their exit packages, a situation that would certainly plunge them into more poverty. Presently, ZISCO owes them millions of dollars in unpaid wages stretching over 60 months. Add the exit packages to this liability, government’s indebtedness towards the workers will be huge.

Desperate to attract capital into ZISCO, government appears determined to sacrifice the interests of the workers in order to create conducive conditions for prospective investors.
Government is not just doing this to save ZISCO.

For letting go part of its shareholding in the business, government will also get substantial cash to ease its precarious financial situation. While it is true that investors are being put off by huge salary arrears on ZISCO’s books, government seems to be unconcerned about the future of these employees.

The National Union of Metal and Allied Industries in Zimbabwe (NUMAIZ) has reacted angrily to government’s indifference to the plight of workers at ZISCO.

The union is accusing President Robert Mugabe’s government of attempting to blame ZISCO employees for its own shortcomings. For many years, the giant steelworks, based in Redcliff, has been crying out for recapitalisation.

It was only about two years ago that government roped in an Indian company, Essar Holdings, to acquire its 64 percent stake, with a view to reviving ZISCO.

However, the deal seems to have fallen through.

Essar had committed to investing over US$750 million in ZISCO, but red tape and political interference spoiled its appetite in the business. Located outside Kwekwe, ZISCO used to be the largest steelworks in Zimbabwe. Over the years, it has faced many operational problems and has been dogged with countless corruption scandals.

As of early 2008, ZISCO was producing less than 12 500 tonnes, way below the break-even capacity of 25 000 tonnes. As it is, no production is taking place at the plant, which is at risk of becoming a white elephant.

NUMAIZ secretary general, Henry Tarumbira, this week said it was government that contributed to the collapse of ZISCO in the first place, hence it should own up to its failures instead of penalising the workers.

“They have chosen to pay back the dedication of our members by terminating their contracts en masse,” he said, tongue in cheek.

“…What we are saying is that they first have to pay the workers their salary arrears before they talk of terminating their contracts”.

Since the onset of the recession that has dogged the country’s economy for more than a decade, thousands of workers have been rendered jobless.

To make ends meet, most of the victims of the retrenchments and company closures have turned to self-help projects, including vending. Life has been tough for the majority of the workers jettisoned out of their jobs.

With unemployment hovering above 90 percent, government has been toying with plans to create over two million jobs between 2013 and 2018. But given the turn of events at ZISCO, there are contradictions emerging in government, as exactly the opposite is unfolding.

After the July 17 Supreme Court ruling that allowed employers to terminate jobs on three months’ notice, it was awkward to see government seizing the judgment to trim staff at some of its loss-making parastatals.

State-owned institutions, among them the Zimbabwe Broadcasting Corporation and the National Railways of Zimbabwe did not waste time in terminating contracts for scores of their workers. Following the Supreme Court ruling, over 30 000 jobs were lost, although the Employers’ Confederation of Zimbabwe disputes these figures.

The job carnage only stopped after the Labour Act was amended in favour of the employees. Regardless, government is continuing to wield the axe, with the latest target being workers at ZISCO. Unfortunately, the workers are being made redundant when their employer can hardly afford a dime towards their packages.

Even if that obligation was to be inherited by government, the difference may just be the same. Currently, government is seeing red whenever its month-end because it cannot even afford to pay its strong workforce of over 270 000 civil servants. With its finances topsy-turvy, there is no hope for reprieve anytime soon for the 3 000 ZISCO workers.

The only plausible possibility is that the workers might go for years before they get their packages, let alone their salary arrears, given the dire state of government’s finances.
To rub salt into their wounds, the workers only heard about their fate in Chinamasa’s budget statement.

Clever Madumera, an executive member of NUMAIZ, who is also employed by ZISCO, said the workers have not yet received any formal communication from management.

“We have not gotten any communication from management, so for us, nothing has changed yet, things are still the way they were because we do not deal with the Finance Minister, but management. They know the procedures of communicating with us and should they have anything to say to us, they will have to follow those channels,” said Madumera.

“Considering that we have not been able to get our salaries for a very long time, we will not dispute the decision to lay us off as long as they comply with the laws of this country. All we want now is money because we have gone through a lot of suffering,” Madumera said. The Zimbabwe Congress of Trade Unions (ZCTU), the largest union in the country, is also unhappy with the sudden turn of events at ZISCO.

ZCTU secretary-general, Japhet Moyo, said if government was serious about terminating the contracts of ZISCO’s workers, it should follow the proper procedures as prescribed by the country’s recently amended Labour Act.

The Act has specific requirements to be followed by any employer who wants to terminate the contracts of its workers.

“We are not aware of any other provision than what is stated,” Moyo said, adding that the common law position, which government is applying in this case, is no longer consistent with the country’s statutes.

He said government should first notify the Works Council, the National Employment Council and the Retrenchment Board before proceeding with the termination of the contracts.

“Unfortunately for them, that is what the law says and we want all employers to abide by what the law says. We don’t care what time it will take for them to go through all the necessary procedures because that is not our business, what we want is to see a fair deal for our members,” he said. Financial Gazette