Zim is open of business, but the labour law is closed

By The NewsDay | May. 18, 2018 | 5 Min read

Zimbabwe is open for business has become a common phrase in Zimbabwe. Events leading to the ushering in of the new dispensation in Zimbabwe has introduced these phrases. This mantra is not the correct realisation of what is on the ground with regards to labour laws. Investors around the world are intrigued by the events that have taken place in Zimbabwe and the prospects of investing.

By Edwick Mabika

There has been a positive vibe and commitment to invest in the country by big organisations. One of the major setbacks, thus being an impediment to quick investment into the country by investors, is the Zimbabwean labour laws.

The laws are rigid, restrictive to investment and they turn to be more favourable to the employees. This is an aspect that scares away many prospective investors. Here, it is easy for an employer to acquire cheap labour, but it is not the case with the employers when they want to get rid of excess labour in their organisations. Employees are heavily guarded and protected from dismissal from employment. Such an environment shows that local laws are still conservative.

This practice can be viewed by investors as a disincentive. The labour law should be accommodating for the employer to hire new stuff to join the organisation, and also at the same time guarding against exploitation of the employees and ensuring that employees’ fundamental rights are protected at all costs.

The laws should make it easy for employers to get rid of excess labour.

In addition to that, in Zimbabwe, it can hardly be seen if employers have any rights.

If one has to scan the Labour Act, there is a clear view of how employees are overprotective by the labour with far reaching rights awarded to them which are clearly stated.

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It is high time the Labour Act is looked at and necessary arrangements are made to align it with international standards, affording an equal footing with employers having their rights legislated.

For example, in South Africa under sections 6 and 7 of the Labour Relations of 1995, it has provided employers with fundamental rights.

This, however, when adopted tries to put the employment relationship at par, something which excites investors and prospective employers.

Also, employers find themselves with an obligation to pay a hefty retrenchment package to an employee(s) that have been relieved of their duties.

Zimbabwe is operating in an environment that is not stable. This has forced management in organisations to retrench some of its workforce for the purpose of survival, improving productivity and efficiency.

But at the end of the day, the employer finds him/herself with huge costs they have to bear. Time to time, organisations in Zimbabwe have to bare huge expenses of retrenched employees.

According to Amendment 5 of 2015, the minimum retrenchment package is 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.

This is a burden for the employer and opposes ideas of productivity and efficiency in an organisation, which it will be trying to achieve. Organisations cannot get rid of excess labour without a cost to it, something investors keep a close eye on. This has created a reluctant on investors to speed up their investment in the country.

An element of being unpredictable can be found in Zimbabwean laws. This can be best described by events from 2015 to this year. On July 17, 2015, a landmark ruling was made by the late Chief Justice Godfrey Chidyausiku in the case of Don Nyamande and Anor v Zuva Petroleum (Private) Limited.

He recognised the right of the employer at common law to terminate a contract of employment on notice, just as the employee can terminate their employment on the same basis.

The decision was based on equal footing when parties came to an employment relationship. Later that year, Amendment Act No 5 of 2015 was introduced.

This took away the right of the employer to terminate an employment of contract on notice, but the employee’s right was still being observed.

In 2018, Chief Justice Luke Malaba made a ruling that all employees whose employment where terminated on three months during the period of the landmark ruling up to the introduction of the Amendment 5 of 2015 had a right to retrenchment packages stated in the Amendment 5 of 2015.

Such retrospective laws are not good for business. It makes labour laws highly unpredictable. Retrospective laws have always been not good and not favoured for business. Retrospective laws create a situation which is highly uncertain, and can be abused to meet a hidden agenda. Investors require that their investments are safe and in good, friendly environment that is certain.

This idea of a minimum retrenchment package from Amendment 5 of 2015 came into existence out of retrospective law and a reaction to the landmark ruling of July 17, 2015. The amendment has proved to be problematic and not adequately crafted with the necessary consultations taking place.

Employers are to provide retrenchment packages to all employees regardless of their status of employment and also to add on non-performing employees or troublesome employees who might have to be retrenchment have the same package as of other employees who were not the same.

This becomes a burden to the employer to pay a package to non-performing employees and an increased expense. Employees who were used to have presentism at work are rewarded. This should be readdressed and international practice should come onto play.

Speaking of being productive, Zimbabwean laws are protective of the employee in that the Labour Act provides different leave days, which are entitled to employees that are paid and are regarded to be excessive, for example employees are entitled to 180 sick, 30 vacation, 12 special leave and 98 maternity days for women. These are paid leave and they can add up to 320 days in a year from a total number of 365 days

In order to walk the talk in line with this mantra Zimbabwe is open for business, there is need to relax some of the labour laws so as to increase investment in the country.

The government should, at this period of reviewing the Labour Act, consider looking into and addressing issues of overregulation, inflexibility and being overprotective of the employees for the country to be attractive for investment.

Zimbabwe should have clear laws and should consider not using retrospective aspect, as it scares away investors. Foreign direct investment is currently being hampered by such.  Article by Edwick Mabika, Cell number: 0773 509 015. Email; [email protected]; http:www.linkedin.com/in/edwick-mabika/