via ‘Salary cuts could trigger lawsuits’ by Moses Matenga March 20, 2014 in NewsDay
GOVERMENT could face an avalanche of lawsuits after it unilaterally slashed salaries and allowances of parastatal bosses to a mere $6 000 per month, labour law experts warned yesterday.
According to experts, the move could also trigger massive brain-drain as thousands of professionals would likely look for greener pastures elsewhere.
Finance Minister Patrick Chinamasa on Tuesday announced a cut in salaries of chief executive officers of parastatals and local authority bosses to a maximum of $6 000 per month pending the finalisation of an appropriate remuneration structure.
Labour law expert Rodgers Matsikidze said it was illegal for government to impose the $6 000 per month on parastatal bosses as that had legal implications.
“What has just happened is a Cabinet directive and the next thing is boards should engage the employees and try to negotiate a revised contract. Either they agree or say pay us until end of contract. I didn’t read it to say that’s the salary to be given. It’s either there is mutual settlement or an employee is bought out of contract and those are options that are there.”
Matsikidze said the government as a shareholder cannot impose a position on the salary issue.
“It’s (an) unfair labour practice,” Matsikidze said. “Legal processes should follow and government is not above the law.”
But Zimbabwe Congress of Trade Unions (ZCTU) secretary-general Japhet Moyo said the cut was long overdue and the money taken from the huge salaries must pay ordinary workers who were struggling to make ends meet.
Some of the money, he said, could be used to provide service delivery. He said the government could face legal action for unilaterally slashing the salaries of parastatal bosses.
“That will be a big challenge since these people had contracts. If it was a collective bargaining agreement that went through due processes and if things were done properly, it would have been difficult and of course one could sue,” Moyo said.
He, however, said it would be difficult for most of the affected bosses to seek greener pastures outside the country as their demands would be too high.
“Who needs people earning $20 000? They can’t pay that in South Africa,” Moyo said. “We know government has made political decisions before and this is a political decision that no court can challenge.”
Chinamasa told journalists after a Cabinet meeting on Tuesday that government was prepared for any legal action.
“If anyone decides to sue we will take them up and that’s the least of my worry,” Chinamasa warned. Tax expert, Tendai Mav hima said that it was a misconception that the parastatal bosses were evading tax by giving themselves hefty allowances.
He said all allowances for non-civil servants were taxable.
Mavhima, however, said if government unearthed tax evasions, action could be taken.
“One can be audited and made to pay tax for six years up to now. There is a provision in the Tax Act and that period can open indefinitely,” he said.
Ordinary Zimbabweans, however, lauded the salary cuts describing the move as long overdue.
A student rights activist Pride Mkono said: “It was a welcome move which was long overdue. They must have those assets acquired through these illicit activities seized and forfeited to the State as a mechanism of recovery and then they must all just be fired.” Chitungwiza Residents Trust (Chitrest) also said most residents had welcomed the salary and allowance cuts.
“What remains now is for the government and other interested stakeholders to put mechanisms in place that will ensure that this directive will be implemented in all public institutions for the benefit of the people,” Chitrest said.
A Harare resident George Mungoni said: “It was long overdue but they should make sure it’s properly implemented.”
Meanwhile, Chinamasa defended the more than $3 000 salaries earned by ministers saying it was enough and justified for them as they worked hard.
He said President Robert Mugabe was getting slightly more than $5 000 including benefits.
“Who would begrudge me with the $3 000 that I get given the work that I do?” Chinamasa said.
COMMENTS
This greener pastures thing is a myth-the moto should be -let them go-and they will soon find out that it is greener around the sewer;all that glitters is not gold.Most of these guys would not hold a job in competitive labour space-the managers and CEO should have sleepless nights dealing with customer needs out of hours not what you get in institutions like ZESA where if one suddenly runs out of pre-paid electricity over the weekend only to find that all the outlets to re-juice the prepaid meter are shut and everyone has gone home-how ridiculous!This is lack of basic customer care.The Gono dollar hasn’t left the mindset of many which is not surprising to see so many goods and services overpriced.Payment by results is the order of the day in modernised economies;the competitive edge is more about about selling more with low profit margin per item rather than seling fewer items at exorbitant profit margins.
on the other hand the salary slashes may affect a lot of people if a CEO is getting 6000 what about the manager 3000 what about the account officer or HR officer 1500 Assistance 1000 what about the driver and all other Juniour staff it doesn’t make sense
The whole idea of salary cuts is to ensure that it goes down to the bottom of the work force to reduce the salary bill for any company to within 25-30% of that company’s revenue.This is a sustainable figure for a company to operate profitable.
If they have funds to sue the minister its fine but they are not going to win it because they gave themselves these illegal allowances through corrupt boards.Do you take results of corrupt boards seriously? Surely,no legal court will entertain this.
I agree with this salary slash. Basic plus allowances should be capped at $6000. Then they can get a performance bonus. Set out measurable performance targets and at the end of every quarter, you measure actual performance against target. If we get to a stage where we have efficient running parastals, where the public is receiving quality service, lets the buggers earn as much as they want. As long as the remuneration is appropriately approved and aligned to the performance of their company. If you are worth your weight as a CEO, you know that you can deliver and you will get your dues. The only ones who will worry are those that know they cant perform. The days of coming into the office, leaving your jacket on the chair and galavanting on your farms or with your UZ mistresses is over! The tax payer deserves results!
come on those who are against pay cuts!!! what brain drain are you talking about? take zimra for example, pasi does not have any accounting qualification, Charlton chihure was a police constable before he became a zimra director or whatever they call him, mangwiro was idling at zesa before joining zimra. where do they drain going if they leave zimra and Zimbabwe? what difference are they currently making at zimra but milking the fiscus and feeding their mistresses?
I’m a manager CEO of a private company and would love to get $6,000.00 a month would happily pay my PAYE and work 12 hours a day 6 days a week for this. WOW I would be rich.
Guess as I have to pay the wages of Government employees i will continue to earn a low wage.
One big problem surrounding this issue of mega salaries is that people are airing out the their views with only two things in mind: (1) pull him down syndrome and (b) emotion.
The most critical issues that people should tackle are:
a)Who appoints and determines a CEO’s salary? It it the CEO him/herself or a board or a minister?
b) Why was government silent when this issue of state enterprises slaries was being raised by Gordon Moyo in the ended GNU?
c) How far back has government known about this obscene salaries and why was there not action?
d)Should it be the government’s daily business to run parastatals or that they should be concerned with policy and performance issues? What then becomes the board’s role if the minister taking the role of the board?
e) If the government knows of incompetent CEOs, why has it not been firing them since Chinamasa was recently bragging that the government is the shareholder? (For sure the Gvt is the shareholder of parastatals).
e) In any case, are all parastatals the same in terms of complexity to the extent that all the CEOs are labelled equal in terms of salary?
f) Those who celebrate the irrational slashing of salaries better be careful because it is the bottom that may ultimately suffer: How? How can I be motivated as an Accountant of Finance manager or an Engineer if my CEO’s salary ceiling is my aim?
My opinion is that yes, the nation is agreed that obscene salaries kwete but let the rationalisation be done soberly without being populist. Populist actions always result in more costly blunders. I do not like the combination of Chinamasa and Jonathan Moyo leading this crusade. These guys are nowhere near being financial and HR experts and yet they seem to have all the answers.
This problem of pretending that people do not need money is the fuel for corruption in Gvt. Ministers boast of ‘modest’ salaries of less than $3 000.00 but we see them going on endless and sometimes valueless trips abroad so that they beef up their salaries with T&S. Some senior government officials even elbow out professionals from attending technical training and yet the pros are the operatives. Lets be sober when debating this salary gate issue. Citizens must beware of politicians underlying motives before mapururudza. Chenjerai kufarira n’anga ichizobata mai venyu kuti vanoroya ivo vasingaroyi.
Ministers earn more than 3000.00 if we are to look at their allowances. Even Mugabe gets far more than 5000.00 as they put it. Do you think Mugabe would have been able to send Bona to study in Singapore with that salary-No. Mugabe and his ministers don’t know a filling station. How can Mugabe afford foreign medical services- kwaasingapore. Look at the schools were children of ministers are going-do you think a person earning 3000.00 can afford that-kunyepa
There are 2 parasites here.if we can get rid of 1 lets try it ,we hav nothing to lose.as for law costs let them pay their lawyer perhaps losing some of those millions might wake them up.i m sure if the state gives this case to uz law students as a project they ll get a run for their money
I for one would very much like to see these parasites take government to court because then the government would have to cease protecting them and then the fun & games will begin. I look forward to this development with great anticipation!!
$6000 is ok for the meantime but do it professionally. Bring work-study to professionally determine salary levels. If there is no such expertise here you can always such a service from South Africa. According to work-study, each worker will be paid according to what they input to the parastatal.