Minister says retrenchments are good for ailing industry

Industry and Commerce Minister, Mike Bimha, said the ongoing wave of job losses is good for the industry, which he said has been saddled with ‘excess workforce’ before a recent Supreme Court ruling gave employers leeway to fire workers without the costs associated with retrenchment packages.

President Robert Mugabe said on Wednesday that over 9 000 workers had lost their jobs since the Supreme Court’s  July 17 ruling which allowed employers to dismiss workers on notice and without severance packages.

“To me, it is a reflection that we had taken too long to amend labour laws,” Bimha told delegates at the Confederation of Zimbabwe Industries (CZI) congress.

“You cannot continue to have a lot of employees when business is not doing well.”

Bimha said companies have been dipping into operating budgets to pay retrenchment packages.

“It is expensive for companies to retrench and most industries were eating into their capital reserves hence the failure of companies to rise,” said Bimha.

He said government supports productivity related wages, singling out Ziscosteel, which has been idle since 2008 when it was shut down, but has accumulated a wage bill that stood at $200 million as of 2014.

“Why should we pay unproductive workers? My hope is that we will not have an amended labour law which will worsen things,” said Bimha.-The Source

(318 VIEWS)