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Minister Prisca Mupfumira

Opinion Cuthbert Mavheko
The government recently tightened retrenchment regulations, making it difficult for companies to lay off workers willy-nilly as had become the norm in the country.

According to the new regulations, companies seeking to retrench workers are now required to submit to the government the salary structure of the executive and management, including their allowances and other perks as well. Public Service, Labour and Social Welfare Minister Prisca Mupfumira said employers who wish to lay off workers should first get approval from the government.

Let me quote the Honourable Minister as she was quoted in the Press: “They (employers) should also submit the total wage bill of their company, highlighting how much will be saved by the retrenchment. They should also submit the company board of directors’ fee structure, including allowances paid to the directors and measures previously taken by management and workers to avoid retrenchment,” she said.

The government’s move to tighten retrenchment regulations is long overdue because scores of companies are downsizing or closing down haphazardly, throwing multitudes of workers into the raging sea of joblessness.

Finance, Economic Planning and Development Minister Cde Patrick Chinamasa disclosed during his 2015 National Budget presentation that 55,443 workers lost their jobs after 4,610 companies closed shop between 2011 and 2014.

According to statistics presented by the minister, the tourism sector was the hardest hit with 2,142 companies closing down during the 2011 to 2014 period and 8,413 jobs were lost. In the manufacturing sector 458 companies closed down with 9,978 jobs lost during the same period. In the Construction sector 317 companies closed shop (during the same period) with the loss of 3,651 jobs, while in the agricultural sector 368 companies closed down, resulting in the loss of 5,461 jobs.

To counter the new regulations on retrenchment, some employers in industry, have now introduced voluntary retrenchment which, I am informed, is not subject to government approval .What these wily employers do is that they first apply to their respective National Employment Councils (NEC’s) for permission to send workers on short-time.

Permission is often granted under very unclear circumstances. Workers on short-time are paid a mere fraction of their normal salaries. This makes it very difficult for them to make ends meet and they end up applying for voluntary retrenchment, notwithstanding the fact that what they get in the way of retrenchment packages is infinitesimal.

“Our company sent us on short-time at the beginning of May. Before the introduction of this short-time, I had a take-home pay of $160 a month. After short-time deductions, I remain with less than $60 a month. I’m failing to pay my rent, buy food and send my children to school, so I opted for voluntary retrenchment, which our employers introduced recently. The package being offered is equivalent to just three months of one’s basic pay, but I have no choice,” said a worker who refused to be named.

The irony of it all is that this short-time only affects ordinary shop-floor workers, managers are not affected and continue to receive their mega salaries every month.

It must be acknowledged that most managers in industry earn salaries that are above $10,000 a month before allowances and other lucrative perks are factored in. A survey conducted by Stallone Consultancy in 2009 disclosed that the ratio of the lowest paid worker to the highest paid one in Zimbabwe is 1:44, meaning those on the top rung of the income ladder earn 44 times more than those on the lowest rung.

The salary disparities continue to widen; according to the same survey the ratio currently stands at 1:58.Given the fact that the least paid worker in industry today toils for a basic salary of about $200 a month, this means some managers earn about $11,600. Other surveys say some company top executives in industry are raking in monthly incomes of up to $34,000 a month while ordinary workers toil for peanuts.

Such income disparities are not only shocking, but are totally unacceptable in a country like Zimbabwe, whose struggle for freedom and independence found expression in socialist philosophy.

Today labour unions are clamouring for Poverty Datum Line-linked remuneration for ordinary workers and employers say they cannot afford the requested salaries. Employers contend that paying workers salaries aligned to the PDL will lead to bankruptcy since no normal business is able to pay more than it produces.

It’s true that Zimbabwe’s economy is currently depressed and many companies are struggling to stay afloat .In the light of this, I think it is foolhardy for unions to clamour for PDL-linked remuneration. Labour unions should understand that they can only demand something which is there.

If they (labour unions) know that employers are making a lot of money, then it is within their right to demand higher emoluments for workers .However, most companies are in financial dire-straits and it is a sheer waste of time to demand money which is not there. The government can play a pivotal role in assisting labour unions and employers.

The major area of conflict between labour unions and employers is the issue of salaries. The government should seriously consider exempting all lowly-paid workers, particularly those whose earnings are below the PDL, from paying income tax. This will increase their disposable income so that they are able to meet their basic needs.

As alluded to earlier, some companies in industry are sending hordes of ordinary workers on short-time. The government has a moral obligation to investigate these companies to ascertain if this short time is legitimate and is being implemented in line with the country’s labour laws on short-time work.

One pertinent observation I have made is that workers being sent on this short-time are paid less than half their normal salaries. And yet, Section 12D, sub-section 4 of the Labour Act (Chapter 28) states quite clearly that workers on short-time work should not be paid less than 50 percent of their normal salaries.