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Scores languish in poverty, as jobs haemorrhage continues in Zimbabwe

September 01, 2015
topic:Rule of Law
tags:#dismissal, #job loss, #Labour Act amendment Bill, #labour market, #poverty, #retrenchment package, #Supreme Court, #terminate employment, #Zimbabwe
by:Henri-Count Evans
Helpless, hopeless and outraged, to say the least, is the state of mind for a lot of Zimbabweans right now as many of them walk away from their former jobs without even a crumb of bread to show for their hard work. The culprit is new legislation for the labour market.

More than 27,300 people have lost their jobs since the 17th of July 2015 when the Supreme Court ruled that employers had the right to terminate employees’ contracts on notice without retrenchment packages.

The Supreme Court ruling was made during a judgment in which two Zuva Petroleum managers were challenging their dismissal from the company. The Chief Justice, Godfrey Chidyausiku and four other judges sat in the Supreme Court and agreed that the common law position placing employees and employers on equal basis was functional. Under common law, employers have the same right to terminate employment upon giving three months notice in as much as the employee can hand in a resignation upon giving the same notice.

A boom of dismissals

This ruling triggered massive job losses in both public and private companies. Several companies took advantage of the Supreme Court ruling and went into an overdrive of laying off thousands of employees. Before the ruling came, companies were unable to terminate the contracts of their employees without retrenchment benefits, and hence could not retrench fearing the huge sums of termination benefits.

The massive dismissals saw employees that had served companies for over twenty years going home empty-handed. The biggest companies to retrench include the state-controlled National Railways of Zimbabwe (NRZ) which has dismissed an estimated 900 employees, the Zimbabwe Broadcasting Corporation (ZBC) which has fired over 350 workers, the Central Mechanical Department (CMED) that laid-off over 200 workers, and Zimbabwe Newspapers (Zimpapers) that fired at least 109 employees. The private companies include Econet Wireless Zimbabwe that is estimated to have terminated the contracts of over 50 employees through its subsidiary Steward Bank. Alpha Media Holdings, the largest private media house in Zimbabwe dismissed over 20 employees, Bata Shoe Manufacturing had 150 workers dismissed, and at Pelhams over 150 workers lost their jobs. Many other companies have followed suit and sent their workers packing.

Sinking into poverty

The dismissed workers are fast drowning in abject poverty as they no longer have any means of survival amid the lack of the formerly available social safety nets to cushion them. The dismissed workers are struggling to make ends meet. They can no longer afford basic commodities such as food, healthcare and education.

“My landlord evicted me from the house I was renting and, to make my life even more difficult, I was de-registered from my medical aid scheme, funeral policy and now I am not able to service my bank loans,” explained a teary-eyed former ZBC worker, Cleopatra Simanga*.

Due to the financial constraints facing many companies in Zimbabwe, the majority of employees that were kicked out, especially those who had been working for state-owned entities had initially gone for more than six months without pay. The dismissals came as a heavier blow to their already dented personal coffers.

A follow-up on the some of the affected employees revealed that the former workers are finding it difficult to adjust to their new unemployment reality. There have been countrywide reports of workers that committed suicide after being handed their termination letters, with trade unions having received communications indicating that indeed most of their members are deeply stressed and failing to manage the situation.

“It is painful and unbelievable to think that a company I served for 23 years could just wake up one day and decide to dismiss me on notice,” lamented a distraught Japhet Ndlovu*, a former CMED employee who was recently dismissed.

“They came and gave us letters on Friday evening and we were told not to report for duty the next Monday. I found it difficult to explain this to my family, we could not believe what had befallen us. I was dismissed with no benefits. I was just told not come back and it ended there. They promised to pay our salaries in lieu for the three months notice period” explained Ndlovu.

The majority of employees were forced to vacate their places of residence and relocate to their rural homes due to high costs of living in towns.

“After I received my termination letter I went to our rented home and with my family packed up our property and came here to our rural home because we could no longer afford the rentals in town,” lamented a hopeless Itai Dube*, a former Zimpapers employee who was interviewed from his rural home in Mwenezi (Masvingo province).

The dismissals have also affected school children as their parents were forced to transfer them to rural schools. Some of those that continue to reside in their urban homes have no hope of managing to pay the coming term’s school fees for their children.

“We have transferred our children to a rural school as we could not continue living in town. Most schools here in Mwenezi have poor quality education as they have no qualified teachers, few textbooks, non-existent science laboratories and are very far away from home,” said Dube.

A new bill may bring hope

The dismissed employees now pin their hopes on the Labour Act amendment Bill that was passed in Parliament on the 20th of August and is now awaiting Presidential assent to become law. The Bill seeks to compel companies to pay all workers dismissed after July 17 2015. The termination packages will be based on the ‘one-month salary for every two years served by workers' formula. Trade unions have rejected this formula as too elitist and argued that one-month’s salary for every two years was paltry and could not sustain the dismissed workers.

Sadly, while the Bill is awaiting Presidential assent to become law, companies have continued to dismiss their workers with the ZBC being the latest to fire an additional 50 employees. Workers and their trade union representatives have bemoaned the slow pace at which the government is moving towards stopping the job purges.

Labour Act as ‘anti-worker’

The current unrest in the labour market and the Labour Act Amendment Bill have been met with polarised feelings between the employers and employees. While there is agreement that the Supreme Court correctly interpreted the law, concerns have been raised with regards to the way companies rushed in to capitalise on the ruling and unceremoniously dismissed their workers.

George Nkiwane, president of the Zimbabwe Congress of Trade Unions (ZCTU) described the new amendments to the Labour Act as ‘anti-worker’ and meant to fulfil the capitalist interests of businesses. He encouraged workers to reject the new amendments to the Labour Act stating that they give a leeway to employers to evade paying termination packages to workers.

“We will not read too much into a Bill which has been authored by businessmen in Cabinet, debated by businessmen in Parliament, a Bill that will further be interpreted by businessmen in the Supreme Court,” said Peter Mutasa, deputy president of the ZCTU while addressing protesters in Harare recently.

Tendai Biti, a lawyer and the former Minister of Finance was quoted in the NewsDay describing the Bill as a “dog’s breakfast and worse than the existing labour laws”.

John Robertson, an economic analyst with Robertson Economic Information Services, said it was necessary for companies to lay off their workers in order to reduce production costs amid high wages in the economy.

Robertson further noted that there was need for the country to reduce costs at levels including wages, if the country is to attract investments. Concerning the idea of a retrenchment package, he said, there was need to “get rid of the idea of a retrenchment package. The concept or idea of it being an entitlement is wrong”.

Labour policies that work for the economy

“The Bill is still too generous to the employees. We need to concentrate on getting the employer happy, to encourage more of them. We already have too many employees, what we need at the moment are employers,” said Robertson.

Robertson lambasted the government pro-worker labour policies that he said are not working well for the economy now. “Employees give more votes, that is the mathematics of elections. We need policies that work for the economy,” he said.

Harare West Member of Parliament and Chairperson of the Parliamentary Portfolio Committee on Justice, Legal and Parliamentary Affairs, Honourable Jessie Majome, echoed the same sentiments as Robertson. Majome said that rather than burdening the employers by forcing them to pay termination packages to the sacked employees, the government was evading its responsibility.

“The government should have shouldered the burden of paying the dismissed workers social benefits through setting a social scheme under the National Social Security Authority,” added Majome.

*Name has been changed

Article written by:
Henri-Count Evans
The ruling of the supreme court triggered massive job losses in both public and private companies.
The massive dismissals saw employees that had served companies for over twenty years going home empty-handed.
The dismissed workers are fast drowning in abject poverty as they no longer have any means of survival amid the lack of the formerly available social safety nets to cushion them.
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