Tough wage negotiations expected


This year’s collective bargaining exercise is likely to be one of the toughest because workers are likely to use government-imposed wages for domestic workers as a threshold, a labour expert says.

But with crippling shortages of fuel as well as foreign currency needed to import essential raw materials, employers have a plethora of reasons to water down workers’ demands.

The government imposed a minimum wage of $1.2 million for domestic workers effective from March.

Observers said the move was aimed at punishing employers, most of whom were perceived to be sympathetic to the opposition Movement for Democratic Change.

The Wages and Salaries Board that regulates wages for domestic workers and comprises representatives of the government, labour and employers had recommended a pay of $400 000.

Zimbabwe National Chamber of Commerce president Luxon Zembe described the government’s unilateral hiking of domestic workers’ wages as one of the worst economic decisions it had made.

He said the move was likely to derail the economic recovery programme because workers in commerce and industry, whose minimum wage was around $900 000, were likely to argue that they could not be paid less than domestic workers since at one stage or another they also needed domestic help.

Labour consultant Ndumiso Davies Sibanda said workers were likely to demand that their wages be at least 75 percent above those for domestic workers because, for instance, they needed domestic help when they went on maternity leave.

This would translate to a minimum wage of $2.1 million for industry and commerce. Employers were, however, likely to argue that the figure was too high.

Sibanda said it was likely a compromise could be struck where the lowest paid workers in commerce and industry would earn between $1.5 million and $2 million.

“Workers are likely to negotiate ruthlessly because of the escalating cost of living and the fact that they have to feed more mouths because their relatives who were gainfully employed in the informal sector are now jobless,” Sibanda said.

“But with some industries operating at as low as 20 percent of capacity, though others are operating at 60 percent, employers are likely to argue that any unreasonable wage demands will result in the collapse of their companies, which will mean loss of jobs,” he added.

According to the Consumer Council of Zimbabwe, an average family of six needed $3 045 170 a month at the end of May for its basic needs.

Food alone cost $1 452 330. Transport costs, which were put at $132 000, have since skyrocketed to about $440 000 per month.

The cost of accommodation has also soared following the demolition of so-called illegal shacks, which has left between 300 000 and 1.5 million people homeless.

Sibanda said wage negotiations in Zimbabwe had, however, never recognised the poverty datum line but were based on the employer’s ability to pay. Employers were therefore likely to have an upper hand in the negotiations, he said.

“While workers will view any wage below the poverty datum line as unrealistic, employers will view them as realistic. Employers, for example, are likely to argue that they are no longer getting a full day’s work from their workers because of transport problems and the impact of HIV/AIDS,” Sibanda said.

The country has been rocked by a fuel shortage that has crippled the transport system. The situation has not improved even after the price of fuel was hiked to $9 600 a litre for diesel and $10 000 for petrol, increases which industry sources had said would make suppliers viable.

Sibanda said employers were also likely to argue that business was down because of the informal sector, which according to some researchers accounted for over 60 percent of the economy, had been wiped out.

But he said in some cases negotiations could move smoothly because employers had adjusted salaries several times between January and June.



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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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