Zimbabwe insists on productivity-linked wages but warns against willy-nilly retrenchments


The Zimbabwe government has called for productivity-based wages but has warned industry from retrenching workers ‘willy-nilly’ without exhausting all the other options.

Businesses in the southern African country, which is battling a worsening economic crisis, have been lobbying government for amendments to labour laws to allow productivity-linked pay in a bid to compete with regional peers whose labour costs are lower.

President Robert Mugabe’s government, which is currently working on amending its labour legislation, has shown willingness to relax the laws in a bid to create jobs, a move which unions have vowed to resist.

Official figures show that at least 4 600 companies closed shop between 2011 and October last year, with nearly 65 000 workers losing their jobs.

“We have to relate our remuneration to our productivity. If there is no productivity, where will the money come from to pay the workers?” Labour Minister Priscah Mupfumira  said.

But unions claim that at least 60 percent of all companies that are currently under judicial management are a result of mismanagement and not unsustainable wage bills. Zimbabwe Congress of Trade Unions secretary general, Japhet Moyo, believes workers are being targetted because they are easy targets.

“To them (government and business) the workers are the low hanging fruits. These are the issues they believe are within their control but avoid looking at the biggest reasons why we are not competitive as an economy,” Moyo said.

“There are issues of electricity costs, water shortages, these are issues (they claim are) beyond their control.”

Mupfumira, however, urged industry to be innovative and work with available resources instead of retrenching workers at a time the country is battling with over 80 percent unemployment.

“Government will not support throwing people onto the streets. The worker needs to be protected, the employer needs to be protected but we can’t have bullies just throwing helpless people onto the streets and it’s usually the lower end of the market that is being affected,” Mupfumira said.

She said the recently revived Tripartite Negotiating Forum (TNF), made up of government, labour and business, would work towards addressing the plight of workers.

Mupfumira said labour reforms were under way and that the principal reforms were approved by government while the law was at drafting stage.

“We are also in the process of getting a TNF Act and the principles have been approved and once the draft has been finalised we will sit together and come up with something which we all own,” she said, adding that the new act would transform the tripartite negotiating forum from a ‘gentlemen’s agreement’ to a legal entity.

Meanwhile, Mupfumira said since government made it mandatory for companies wishing to lay off workers to provide information on performance, measures taken to improve the situation and wage bills including those of directors and executives before retrenchment, the number of requests had declined.

“The number of people applying for retrenchments has drastically reduced because they were finding it easy to retrench. Some companies were retrenching willy-nilly,” she said, adding that there was need to consider reduction of directors’ salaries and only resorting to retrenchment as a last option.

Mupfumira said government would deal with the recent spate of retrenchment at listed hospitality group, Meikles, to ensure workers were protected.

“We have also observed some companies including Meikles which have gone around firing people by giving them three months’ notice. As a ministry we will not accept it and watch people being fired. We are looking at it and will be dealing with any such companies that want to come through the back door to fire people,” Mupfumira said.-The Source


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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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