Employers challenge Labour Act amendments

Employers challenge Labour Act amendments

Source: Employers challenge Labour Act amendments | The Herald March 9, 2017

Fidelis Munyoro Chief Court Reporter
Employers challenging the constitutionality of amendments to the Labour Act — chief among them the provision that companies pay fired workers in retrospect — will have to wait for a pending Constitutional Court ruling. Government amended the labour law following a July 17 Supreme Court ruling that allowed employers to terminate employment contracts on three months’ notice without severance packages.

Many employers feel discriminated by the new labour law and want certain sections of the amended Labour Act declared unconstitutional. Gweru-based Bata Shoe Company, and Netpack (Private) Limited yesterday brought their constitutional cases to the Apex Court for determination.

But after careful considerations, the parties’ lawyers agreed to wait for the ruling in the case in which Greatermens, a subsidiary of Thomas Meikles Stores, is seeking a similar relief.

The case was heard last year and judgment was reserved. Acting Chief Justice Luke Malaba granted the consented order after consulting with his colleagues.

“By consent, the two matters of (Bata Shoe Company and Natpack) are removed from the roll with no order as to costs pending judgment in the case of Greatermens Stores and the Minister of Public Services, Labour and Social Welfare and others in case Number CCZ86/2015,” said Acting Chief Justice Malaba.

In the case, Greatermens seeks to strike down section 18 of the Labour Amendment Act Number 5 of 2015. The company argues that the section is inconsistent with the Constitution of Zimbabwe.

The section provides for workers fired before the amendment of the law to be given retrenchment packages.

The same questions are raised in another case in which Employers’ Confederation of Zimbabwe (Emcoz) is seeking a similar relief in the High Court.

Emcoz says sections of the new law infringe on the rights of employers as provided for by the landmark court ruling.

It contends that the infringement of employers’ rights was caused by a knee-jerk reaction by the State to what it perceived as a social ill.

“That the process of legislating the Amendment Act was reactionary is evidenced in the lack of thinking, consultation and research required to guide action and lawmaking,” said Emcoz executive director Mr John White Mufukare in an affidavit accompanying the application.

“There is little doubt that the Amendment Act will cause hardship to business in the country by further stifling economic growth and causing massive unemployment, the very antithesis of what the State seeks to achieve.”

He argued that by fixing a cost to hiring and relinquishing labour, the State had unwittingly diverted scarce resources away from productivity, which is the only guarantor of employment and job creation.

Mr Mufukare argued the curtailment of the employer’s right to terminate an employment contract on notice led to the viability challenges faced by many companies.

“The Amendment Act therefore unnecessarily limits the enjoyment of employer’s rights without reason, fairness or justification and should be declared unconstitutional and invalid.”

To this end, Emcoz wants Section 4(b) of the Amendment Act No 5 of 2015 to be declared unconstitutional and invalid as well as Section 5 of the same Act that created Section 12C (2) of the Labour Act nullified.

It also seeks to nullify Section 16 of the Labour Amendment Act no 5 of 2015, which amended Section 93 of the Labour Act and Section 18 of the amended Act. Section 4(b) of the Amendment Act reworks section 12 of the Labour Act by adding a section 12 (4) (a) which provides that:

“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 section109 (9); or (b) the employer and employee mutually agree in writing to the termination of the contract or (c) the employee was engaged for a period of a fixed duration or (d) pursuant to retrenchment in accordance with section 12C.”

The provision modifies the common law right of an employer to terminate an employment contract on notice.

The Supreme Court ruling sparked a widespread of dismissals, which saw close to 30 000 workers being left jobless.

Government intervened with a cocktail of reforms to the Labour Act to halt the employment haemorrhage.