Zimbabwe Congress of Trade Unions broke
ZIMBABWE’S main labour federation, the Zimbabwe Congress of Trade Unions (ZCTU) is in financial dire straits, with debts to the tune of US$1,4 million threatening to destroy the country’s oldest trade union movement which gave birth to the main Movement for Democratic Change (MDC) in 1999.
The Financial Gazette can exclusively reveal that the labour union has already raised the red flag in the hope that it may receive a shot in the arm to avert collapse.
Documents in our possession indicate that ZCTU’s plight is a result of the general crisis afflicting the country’s economy.
Unemployment has spiralled out of control, with estimates suggesting that 90 percent of Zimbabwe’s able-bodied are out of formal employment.
The catastrophic closure of companies coupled with widespread retrenchments have forced many into the informal sector, thereby starving unions, including ZCTU, of the much-needed income to fund their activities.
Sectors worst affected by the job carnage include agriculture, which has lost 280 000 jobs in 16 years.
Only 20 000 workers are still gainfully employed in the agricultural sector, from 300 000 in 2000 when government embarked on controversial land reforms that decimated crop output.
The clothing and textile industries’ unions have seen their membership drop to about 8 000, from about 35 000 in the mid 1990s. The unions are affiliates of ZCTU
ZCTU relies partly on subscriptions from affiliates, with much of the funding coming from donors.
In fact, 85 percent of its revenue is from donors, with only 15 percent coming from subscriptions.
Donors provided US$5,7 million in grants and donations to the ZCTU between 2011 and October 2015, against US$1 million in membership subscriptions from affiliates.
Impeccable sources said LO Norway, FNV Monial of the Netherlands, the American Centre for International Labour Solidarity and FOS of Belgium have either withdrawn or scaled down funding to the ZCTU.
Other ZCTU donors include Olof -Palme Centre of Sweden, LO/FTF, IF Metal, APHEDA, International Labour Organisation, OATUU, ITUC of Belgium, ITUC Africa and FES, which are, however, also facing their own challenges.
ZCTU secretary-general, Japhet Moyo, reckoned in a report presented in October last year that should the situation persist, it poses “a serious threat to the existence of ZCTU”.
Poignantly, the mismatch between its income and expenditure is taking a toll on the trade union.
ZCTU’s annual income retreated to US$366 077 during the 10 months ended October 31, 2015, from US$1,8 million in 2011.
It generated US$1,7 million in 2011 and spent US$2,1 million during the same year, creating a US$337 416 deficit.
ZCTU achieved a surplus in 2012 and 2013, before plunging back into the red in 2014 and 2015, when deficits reached US$358 711 and US$236 922 respectively.
The accumulated deficit was US$1 million at the end of September last year.
Another major worry is ZCTU’s rising debt, which has ballooned from US$78,000 in 2011 to US$1,4 million.
In the event that the deterioration goes unchecked, ZCTU risk losing its assets, including its most prized possession, the multi-storey Gorlon House in Harare.
The taxman, cumulatively owed US$99 764 as of October 31 last year in Pay As You Earn, is one of ZCTU’s main creditors.
As of October 31, 2015, workers were owed US$116 331 in unpaid salaries; Fidelity (US$65 996 in unremitted pensions), the National Social Security Authority (US$17 652), while provisions for gratuity amounting to US$215 692 were outstanding.
Mobile telecommunications firm, NetOne was owed US$53 173, the report indicated, noting that law firm, Mbidzo Muchandehama was owed US$65 780.
Moyo said unless the situation was resolved urgently, “we are nailing the last nail to the ZCTU coffin for burial”.
“The ZCTU realises the time bomb it is sitting on and is therefore keen to move from this current situation to a sustainable one although it is faced with harsh national situations which may result in its extinction,” observed Moyo in the October 2015 report.
Reports also confirm the flight of donors, itself compounded by a liquidity crisis that has crippled its 34 affiliates, 75 percent of whom have failed to remit subscription fees since July 2011.
Emotions have been running high within the federation, with Moyo accusing at least 25 affiliates of throwing the 108 000 member trade union into “distress” and driving it towards “insolvency and extinction” due to non remittance of subscriptions.
During boom times in the mid 1990s, ZCTU’s membership was estimated at 585 000.
Moyo said while some unions were genuinely in the red, many had received substantial grants and donations from international donors, but were failing to pay their dues to the ZCTU.
Attempts to assess affiliate unions’ accounts by the ZCTU have ran into serious complications after many of them refused to allow officials into their offices, raising fear of fraud, financial mismanagement and corruption.
The formation of rival unions such as the Zimbabwe Federation of Trade Unions has also resulted in the cannibalisation of membership.
ZCTU admits that unions “propped up by the ruling party to directly challenge the ZCTU by unorthodox means”, had seriously undermined membership growth and dealt a blow to revenues.
“Other affiliates are also receiving direct financial support from partners. However, almost all the affiliates being directly supported are among the unions not remitting subscriptions. The funding levels from cooperating partners also reflect a decrease which is an indicator of things not being well in their funding consortium. Membership continues to decline erratically as a result of retrenchments, company closures and dismissals including the effects of July 17 Supreme Court judgment (which) added fuel to the already burning house where over 38 000 workers were dismissed in one month and more are still being dismissed,” said Moyo.
In July 2015, the Supreme Court passed a ruling that empowered companies to fire workers on notice without compensation, sparking unprecedented dismissals.
“Some of the affiliates last paid their subscriptions to the (ZCTU) centre…before the last congress in 2011. This is an indication of lack of commitment to their responsibility. Verification of the challenges facing some non paying unions was done in 2013. It is unfortunate that no deliberations were done on the report’s findings. Some unions had no information such as bank statements, income and expenditure statements, membership registers…large amounts were being spent on leadership monthly allowances and travel and subsistence costs yet nothing was being paid to ZCTU.
ZCTU is currently taking measures to remain afloat, including relocating its head office to Gorlon House in Harare, which is owned 100 percent by the labour body.
It is also working towards reducing its administration and staff costs.
The collapse of the federation, according to ZCTU insiders, would deal a body blow to the MDC-T led by former Prime Minister Morgan Tsvangirai, which counts the union among its key constituents.
The ZCTU was formed in February 1981, bringing together 52 unions that had existed separately.
At the time, unionists that were closely associated with the ruling ZANU-PF party took over the reins of the labour movement.
Thus, during the first five years of independence, the relationship between ZANU-PF and by extension, government and the ZCTU was largely paternalistic.
It was only after the collapse of the then executive of the ZCTU, and its second congress held in 1985 that a more independent leadership, largely drawn from the larger and more professionally run unions that the relationship between the ruling party and the ZCTU was reduced to arms-length.
Thereafter, the ZCTU steered a more independent and increasingly confrontational position.
The divide between the ZCTU and government widened when the former opposed attempts by the latter to introduce a one-party state in Zimbabwe in the late 1980s following the merger between the two parties, ZANU (PF) and ZAPU in 1987.
The relationship was further strained following the introduction of the Economic Structural Adjustment Programme in 1991.
As the hardships arising from the market-based reforms deepened, government increasingly resorted to draconian measures to shore up its waning political support.
As issues of governance deteriorated, the ZCTU increasingly became the torch bearer for alternative governance.
Together with 40 other civil society groups, the ZCTU spearheaded the formation of an alternative party, the MDC, whose top leadership came from the labour movement.
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