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THE Labour Amendment Bill provides for payment of a minimum retrenchment package for all forms of termination. Section 12C(2) of the Amendment Act reads: “Unless better terms are agreed between the employer and employees concerned or their representatives, a package (hereinafter called “the minimum retrenchment package”) of not less than one month’s salary or wages for every two years of service as an employee (or the equivalent lesser proportion of one month’s salary or wages for a lesser period of service) shall be paid by the employer as compensation for loss of employment (whether the loss of employment is occasioned by retrenchment or by virtue of termination of employment pursuant to section 12(4a)(a) or (c), no later than date when the notice of termination of employment takes effect.

Section 12(4a)(a)(b)and (c) reads:

(4a) No employer shall terminate a contract of employment on notice unless –

(a) The termination is in terms of an employment code or in the absence of an employment code, in terms of the model code made under section 101(9); or

(b) The employer and employee mutually agree in writing to termination of the contract; or

(c) The employer was engaged for a period of fixed duration or for the performance of some specific service;

My reading of the Bill, it clearly means that a dismissed employee in terms of section 12(4a)(a), which is following code of conduct procedures will attract a retrenchment package. This obviously means there is no point in taking an employee through a disciplinary process as the end result is payment of a package. The same applies to termination of employees by mutual consent and at the end of a fixed term contract.

While this is good news for the workers, but it is likely to have huge damaging results on productivity and investor confidence as the world over there is no country that pays retrenchment packages to dismissed employees, or where there is mutual agreement to separate or where the employee was engaged on fixed term.

Could it have been a drafting error or it is a deliberate strategy to please Labour at the expense of viability of industry.

While I personally believe termination of employees on notice without giving reasons is unfair to the workers, I do not think workers were looking for measures to destroy the very organisations they work for.

I doubt it was a drafting error as the Bill sailed through the legal committee, Parliament and the Senate where the Bill was scrutinised three times in Parliament and three times in the Senate.

Employers have to brace themselves for a difficult period in terms of cost of Labour and mechanisation could be the answer which unfortunately could lead to loss of jobs and in worse cases labour intensive businesses could relocate to neighbouring countries to avoid the added cost of retrenchment packages for dismissed employees, mutual separation cases and termination of fixed term contracts.

Workers in my opinion will not have to resign if they have service that qualifies for a retrenchment package, the best would be commit some misconduct so as to be paid a package on leaving.

There are a number of other provisions of the Bill that are not workable on the ground, and are likely to complicate labour relations if left as they are.

The Bill seems to have been drafted by technocrats who failed to thread through labour relations implications of the Bill.

It is my sincere hope that the Minister will get back to Labour and employers and seek guidance on sanitising labour relations offending clauses of the Bill.

l Davies Ndumiso Sibanda can be contacted on:

E:[email protected] <mailto:[email protected]>

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