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Labour ruling favours employers

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The Zuva Supreme Court judgment of July 17, 2015 which paved the way for employers to terminate workers’ contracts upon giving them three months’ notice, has no doubt hogged the limelight in the labour markets lately. The banking sector, which forms the basis of this article, was not spared from the impact of the ruling, although the impact was less severe there than in other sectors. The article chronicles some of the key developments in the first half of the year, before the judgment turned things upside down and tilted the scales heavily in favour of employers.

Financial sector spotlight by Omen Muza

Job losses – the lowdown
The year started on a pessimistic note with the Zimbabwe Banks and Allied Workers’ Union (Zibawu) revealing that the banking industry, which employed about 6 000 people in 2014, eliminated one post out of every six. Of the 847 jobs shed in 2014, most of those affected, however, left voluntarily. ZB Bank lost the highest number of workers at 482, followed by Steward Bank which cut ties with 125 employees, AfrAsia Bank Zimbabwe (89), Standard Chartered Bank (80) and Metbank (71). Meanwhile, the closure of a total of eight banks resulted in the loss of 1 220 jobs.

Allied Bank and AfrAsia Bank surrendered their banking licences in January and February 2015, throwing 250 and 379 respectively onto the streets. Other job losses occasioned by bank closures were as follows: Royal Bank (109), Trust Bank (180), Interfin Bank (82), Genesis Investment Bank (48) Capital Bank (66) and Tetrad Investment Bank (108). Zibawu projected that if the situation continued at that pace, another 1 000 workers could lose jobs in 2015.

Legacy issues
As salary negotiations for the banking sector got underway early in the year, Zibawu said it expected that banks that were performing well would award increments. The association, however, noted that negotiations for
2013 and 2014 were still outstanding. Bank workers were apparently awarded a 10% increment in 2012, which ruling employers appealed. The matter was then referred to the Supreme Court, thereby stalling the 2014 and 2015 negotiations.

A dose of realism
Reserve Bank of Zimbabwe (RBZ) governor John Mangudya torched off a storm by declaring that Zimbabwean workers should not expect salary increases in 2015 simply because the economy could not sustain them. Mangudya said there was no scope for increasing salaries when there was not much productivity taking place.

“We need to balance the economy first and increase salaries later. It will be a mistake to increase salaries now because the economy cannot sustain any salary increments. People are just being paid for going to work or for activity not productivity. Most companies are in a Catch-22 situation because it is more expensive to fire or retrench a person than to keep him working,” said Mangudya, apparently unaware of the huge escape route soon to be given to companies by the Zuva judgment.

A Rare Agreement
The insurance industry agreed to award employees a backdated 2,5% salary increase which saw the lowest paid employee earning $560, up from $546. In a Statutory Instrument (SI) published late January, Public Service, Labour and Social Welfare minister Prisca Mupfumira said the minimum salary level was agreed following negotiations between the Insurance Employers’ Association of Zimbabwe and the Insurance Employees’ Union of Zimbabwe.

Zibawu takes the fight to Parliament
Zibawu issued a petition to the RBZ and the National Assembly on March 10 2015, requesting both institutions to urgently address challenges facing the financial services sector.

“In our view, the Reserve Bank of Zimbabwe has not been carrying out its mandate in terms of the Banking Act, especially when it comes to continuous monitoring, supervision, inspection and investigations of banks. If this mandate is effectively carried out, then some of the malpractices could be detected early and mitigated…Save for a few instances, we observed that the RBZ intervenes in troubled banks when it is already too late,” said the union.

“We seek Members of Parliament to enquire into the causes of bank failures in Zimbabwe, publicise the findings and prescribe measures of bringing to book those responsible, including tracking and recovering depositors’ funds. The public and workers would want to know who was responsible for each bank failure,” said Zibawu.
One for the employer

Steward Bank won a labour dispute against 11 of its workers who were seeking a court order barring the financial institution from withholding their salaries and benefits pending retrenchment. Nisbert Denga and 10 others represented by Selby Hwacha had filed a Labour Court application against the bank decrying the infringement of their constitutional rights. The bank argued that the Labour Court did not have jurisdiction to hear the employees’ application since it was devoid of general powers to hear constitutional matters in the mould of the applicants’ case. The applicants, however, maintained that the Labour Court had jurisdiction to hear the matter and grant an appropriate relief in the event of an infringement of a fundamental right of an employee. However, Labour Court judge Godfrey Musariri said the Labour Act did not provide it with jurisdiction in matters of the acquisition of property whether lawful or unlawful.

“Therefore, the applicants’ case comes to grief upon the plank of the said Section 172 (2). In any event the applicants could have directly approached the highest court, the Constitutional Court, using their interpretation of ‘a court’ under section 85 (1) of the constitution to seek the relief they desire,” Musariri said, before dismissing the application.

Feedback: omen.muza@gmail.com. You can view Omen’s profile on https://www.linkedin.com/pub/omen-n-muza/30/641/3b8

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