Bill splits business, workers
PASSAGE of the Labour Amendment Bill (LAB) in the lower house of Parliament on Tuesday dramatically split business and labour, with captains of industry warning of dire economic consequences from retrospective compensation sought for workers dismissed on notice since a Supreme Court judgement last month.
But both labour and employers were united in condemning the proposed law for failing to take into account their respective interests, exposing a skewed consultative process that led to the creation of the anticipated legislation.
Employers gave the sternest warning that the LAB would ruin the economy, predicting an intensification of fiscal pressure on a government which is already struggling to raise monthly salaries for civil servants due to increased company closures and job losses.
The business sector, which met up to the late hours of the night on Tuesday under the auspices of the Employers’ Confederation of Zimbabwe (EMCOZ), said in a statement after the meeting, which also closely monitored debate in Parliament: “Business reiterates that HB7/2015 will result in further deterioration of economic activity, resulting in further closure of companies, loss of jobs, less income to the fiscus, decline in social fabric and more importantly reduction in investor attraction into Zimbabwe.”
The LAB went into Parliament as House Bill 7/2015 (HB7/2015).
The EMCOZ statement was signed by the leadership of the Bankers’ Association of Zimbabwe, the Chamber of Mines of Zimbabwe, the Commercial Farmers’ Union, the Confederation of Zimbabwe Industries, the Zimbabwe Commercial Farmers’ Union, the Zimbabwe Farmers’ Union, the Zimbabwe Council for Tourism and the Zimbabwe National Chamber of Commerce.
John Mufukare, the executive director of EMCOZ, said many companies would be unable to meet the compensation bill emanating from the proposed law.
“Those who can still afford to pay the workers did not send them away on notice; those who cannot pay sent the affected workers on notice so nobody can afford the compensation stipulated by the Bill,” said Mufukare.
Asked how much this would amount to collectively for business, Mufukare said: “It’s something that we are working on. We will have the figures by Monday but they will simply be academic because nobody can afford it.”
Economist, John Robertson, said it was difficult to quantify the amount companies were likely to fork out in payouts for sacked workers, but noted that these would be huge given the number of people said to have been affected.
Workers said the LAB was a bad law but indicated that provisions to do with compensation of dismissed workers would temporarily pacify a turbulent labour market.
The LAB, which seeks to rescue workers sacked on notice following a Supreme Court judgement that upheld a common law position granting employers the same rights as workers in the termination of contracts, nearly suffered a major setback after an adverse report by the Parliamentary Legal Committee (PLC) led by Fortune Chasi.
It, however, sailed through after legislators from both the opposition and the ruling party shrugged it off and allowed the Bill passage without amendments.
The LAB will today go to the Senate, where the Movement for Democratic Change (MDC-T) is expected to submit suggested amendments. But analysts predict these will fail.
The Zimbabwe Congress of Trade Unions (ZCTU) secretary general, Japhet Moyo, said the LAB would be a bad law but hoped compensation thresholds could be increased when it is debated in the Senate.
“The Bill is a bad law as it is; what was debated before Parliament (on Tuesday) was a bad law – 10 percent good and 90 percent bad,” said Moyo, who criticised the law-making process which led to the creation of the LAB.
“On retrenchment, it has given by the right hand and taken away by the left hand” said Moyo.
Representatives of business said they were unable to associate themselves with the LAB for the following reasons:
· The whole country started afresh on the Feb 1, 2009 with the introduction of dollarization or the multicurrency system. On that date the country lost all its investments, reserves, including accrued pensions.
· The talk of any number of years served prior to Feb 2009 falls in the category of liabilities that could only be addressed by the Zimbabwe dollar
· There was total misinformation to say employees being laid off were walking away with nothing after termination.
· All permanent employees contribute to company administered pension schemes, NSSA (National Social Security Authority) and all statutory obligations and outstanding pay and contributions to pension schemes were payable after termination.
Through their statement issued by EMCOZ, they said government, business and labour had been engaged in labour law reform discussions for the past five years for the purpose of making the country more attractive to investors, both domestic and foreign, for the socio-economic development of Zimbabwe.
“The outcome, House Bill 7 of 2015 (HB7/2015), leaves the country even less attractive than it was before,” said the captains of industry, referring to LAB.
They said the current Minister of Public Service Labour and Social Welfare, Prisca Mupfumira, was “the first minister to have totally ignored the contributions from a social partner (business) and therefore the concept of tripartism”.
“Business reiterates that it cannot associate itself with HB7/2015, currently under discussion in Parliament. We believe all with the interest of the nation at heart will see the need to get this economy working again; and that is not through the HB7/2015.”
Moyo said trade unions were gravely concerned by several provisions in the LAB and that they had “very poor” engagement with Mupfumira under the tripartite negotiating forum (TNF).
“We have been following the law-making process in the media when we have the TNF. We shouldn’t be asking questions,” said Moyo, who lashed out at Mupfumira: “This is the worst Minister (of Labour) we have had”.
“This is a serious issue because we are not only amending a provision of the Labour Act; we are amending the entire Labour Act,” said Moyo.
The LAB proposes to, among things, allow the Minister of Public Service and Labour to interfere in trade union affairs, a situation that will weaken trade unions.
He said the ZCTU was only elated by the fact that all workers who were fired on notice following the Supreme Court judgement would be back to work once the LAB is promulgated into law.
The LAB has proposed that all workers sacked on notice should be reinstated or paid compensation.
It is that provision that courted an adverse report from the PLC, which said applying the law retrospectively in compensating fired workers “would be punitive on the employer and violates section 56 of the Constitution relating to equal protection of the law”.
Mufukare said captains of industry “had discussed the issue at length” when asked about retrospective compensation.
“We’re still consulting as to the possibility of success if we challenge that provision. We’re taking legal counsel,” said Mufukare.
But it would appear the PLC’s report is likely to buoy business into proceeding with a court challenge should the LAB become law.
Robertson said the country was “in a serious mess” because government officials and politicians, particularly those aligned with ZANU PF, were now invested in business but were in a quandary because “ideologically, ZANU PF is supposed to be socialist and on the side of workers”.
“The government officials and politicians are now affected by laws they can’t live with. We are therefore going to get a dishonest statement,” said Robertson.
Mupfumira told Parliament that she would look into concerns raised by some legislators so that the LAB could be “fine tuned to take into account contributions of the members”.
But both labour and employer representatives said they doubted if any of their concerns would be addressed.
So, there may be a meeting at the Courts soon.