Greetings Ladies and Gentleman, members of the fourth estate and all invited stakeholders to this press conference.
The bigger picture is not what transpired between Zuva Petroleum Pvt Ltd vs Don Nyamande and Kingstone Donga in the Supreme Court but rather how the process of managing labour costs can be implemented without leading to either company closures or heightened poverty levels induced by non voluntary unemployment. Which therefore means recent rulings by the Supreme Court involving both the Zuva and the NRZ cases were a mere interpretation of the existing current labour law with no new wheels of laws having been invented?
The status quo of labour disputes with their employers has been an accumulation of challenges which companies faced in failing to lay off their staff since the slowing down of the economy. They had accumulated costs linked to poor productivity which had seen their production costs skyrocketing as a result of maintaining a similar labour force whilst capacity utilisation has plummeted.
As a chamber, our relationship with the government of Zimbabwe continues to shift from strength to strength as evidenced by their desire to listen to the concerns of our business constituency. We therefore do not have any doubt that every opinion or advice we forward to them is held in high regard.
The ruling by the supreme court on the labour matter involving former employees of Zuva Petroleum and the company had stirred both emotions and relief within our market, on the surface, it does appear like a blatant violation of worker rights but once one factors in the business environment we are operating in at the moment, there is no doubt that most companies in Zimbabwe are in debt distress. Surprisingly the Zuva Petroleum vs. its staff is not the first ruling of this kind under the similar circumstances, if my memory serves me well in the 90s, we had the Nhamo vs Chirisa case even though the judgement went unnoticed to the public.
However our major concern is to call for the government to amend the labour act, what is being presented to us at the moment as the labour bill is a piece meal exercise to solve a much broader problem. As the voice of business, we strongly feel it was important to make a direct comparison of labour laws with countries whose FDI inflows have been quite significant of late.
We urge our members to exercise restraint as they make decisions relating to labour issues within their concerns or companies. What came out of the Supreme Court should not be used as an excuse for unjustified dismissal or retrenchment of employees. This will be tantamount to fighting the Zimasset objectives which validates need for job creation. As the voice of business, we certainly cannot afford to promote unfair dismissals.
However dismissing an employee was a mammoth task which could not be achieved in less than 2 years on average, in the process it could cost a company its market, its reputation and even in extreme cases its balance sheet given that a litany of writ of executions were issued in the courts of law as recompense for aggrieved employees. Information at our desk in the chamber indicates that labour productivity in Zimbabwe has reached the nadir whilst a dollarized environment has posed an unsustainable cost income ratio for most corporate way above75% with the greater chunk of the cost base emanating from wages and salaries.
In most of the emerging economies as well as OECD countries, once an employer feels one is excess to their needs, it certainly doesn’t take the employer a month of Sundays. Whenever a company experiences a slowdown as we witnessed in 2007 during the subprime mortgage crisis which hit the entire transatlantic zone, banks and insurance companies were laying off staff as a cost containment measure. What is the rationale of forcing an employer to retain an employee who is no longer serving his or her contractual purpose?