ZESA grapples with US$100 million salary debt
ZESA Holdings risks losing its property in the event that its employees resort to attaching its assets in order to recover salary arrears of over US$100 million which accrued after the parastatal understated salary grades for over four years.
National Energy Workers Union of Zimbabwe (NEWUZ) secretary-general, Thomas Masvingwe, told the Financial Gazette that the debt arose after the collective bargaining agreement (CBA) of 2012, which increased wages and allowances as well as payment of arrears owed to ZESA the employees whose grades were understated.
“An arbitral award passed in 2012 by Lovemore Madhuku instructed the company to pay a minimum wage of US$275 to employees in grade A1, which is the least and ZESA has not been paying that amount. This implies that every employee of ZESA is owed a substantial amount because all grades were prejudiced,” he said.
Masvingwe said ZESA disputed the arbitral ruling, arguing that Madhuku was biased in favour of labour and this prompted the parties to refer the matter to another arbitrator.
“We then agreed that the matter should be heard by Emmanuel Mugade, the Dean of the Faculty of Law at the University of Zimbabwe. Interestingly, he also ruled in favour of the employees by upholding Madhuku’s earlier observation. ZESA then tried to circumvent payment of the amount by offering ex-gratia compensation. Under this settlement the employees who succumbed to management’s pressure withdrew their salary claims and were given US$2 000, which is less than five percent of what they are owed,” he said.
Ex-gratia is defined as a payment made after voluntarily withdrawing a claim.
Many employees disputed the offer because negotiations for the settlement isolated their legal representatives and because they were threatened to accept the plan.
High Court papers in possession of the Financial Gazette confirm that Justice Mary Dube presided over the matter last year.
Under case number HC 1862/15, ZESA was found guilty of pressuring employees through the ex-gratia process by leaving out trade unions in the arrangements.
It was then ordered that ZESA should stop offering its employees any amount without involving of their legal representatives. The power utility was also found guilty of under-rating salary grades.
Contacted for comment, ZESA public relations manager, Fullard Gwasira, confirmed that the power authority had a long standing dispute with its employees which emanated from the 2012 collective bargaining agreement.
He said failure to pay the workers had been caused by financial constraints.
“The courts have since ruled against ZESA’s interpretation of the agreement in the first instance and the company is now seeking an exemption from implementing the agreement on the basis of incapacity. ZESA Holdings has pleaded incapacity on the basis of its weak financial position from 2012 to date. Implementing the agreement would have a negative impact on the wage bill and service delivery,” he said.
Gwasira pointed out that the parastatal was offering a settlement plan and the majority of employees have since taken up the offer.
“Management has expressed its appreciation to the generality of employees who accepted the offer in the interest of the company’s cash flows, tenure of employment and service delivery,” he explained.
However, employees have refuted claims of a settlement plan and accused their employer of peddling falsehoods.
“ZESA is underestimating the gravity of the matter and whatever they are saying about a settlement offer is not true. What we know pertaining to the issue is that they pressured employees through ex-gratia process and the High Court ordered them to stop that process. We expect ZESA to be honest and pursue legally acceptable methods to resolve the issue. After all how can they claim that they are incapacitated to pay when we agreed through CBA?” asked Masvingwe.
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