ZCTU confronts RBZ in currency battle - Zimbabwe Situation

ZCTU confronts RBZ in currency battle

Source: ZCTU confronts RBZ in currency battle | Newsday (News)

WORKERS have threatened to take their war to the Reserve Bank of Zimbabwe (RBZ) for unilaterally declaring a new currency, the RTGS dollar, effectively eroding the value of their salaries that were pegged in United States dollars.

BY BLESSED MHLANGA

The workers are demanding that they be paid in US dollars as reflected on their contracts of employment.

Through the Zimbabwe Congress of Trade Unions (ZCTU), the workers are preparing a legal suit against the central bank “for illegally imposing itself on our contracts of employment”.

ZCTU president Peter Mutasa confirmed the development, saying workers would take the war to the central bank demanding their salaries be paid in US dollars.

The workers claim their salaries were illegally converted into ZWL$ by the central bank.

“The contracts that are in existence were signed as US$ contracts,” Mutasa said.

“These contracts are between the employer and employees, but the RBZ then illegally came in and altered these contracts after introducing the RTGS$. We believe that this is illegal and that we have a chance at winning this battle.”

Midlands State University law lecturer Valentaine Mutatu said the labour body could have a very good chance at winning the case because the law is clear that government policy has no effect on personal contracts.
“There is sense in their case because I understand there is a judgment made by Justice Happias Zhou, which says all obligations that were there in US$ are still in US$, but the judgment has since been appealed to, so they have sense,” he said.

Mutatu said government has also made a law which empowers it to collect revenue in hard currency from those selling in US$ or importing vehicles from outside the country, yet it was paying civil servants in the local currency.
“Government is saying, for instance with Zimra [Zimbabwe Revenue Authority], if you sell in US$, you pay tax in US$ and also duties are being paid in US$. So I believe they have a case,” he said.

In introducing the RTGS$ through Statutory Instrument 33 of 2019, through the temporary presidential powers, the RBZ converted all assets and debts at a rate of 1:1 to the US$, effectively allowing the employer to continue paying salaries in RTGS$.

ZCTU said workers had suffered immensely through the illegal actions by the RBZ and should, therefore, have it reversed and workers paid in US$.

“You have businesspeople selling their products in US$, but paying workers in RTGS$. This should also stop. The RBZ has no power or legal standing to alter contracts of employers and employees without the consent of the two parties. In our view, workers should continue earning the currency denominated on their contracts,” he said.
Salaries have been significantly eroded, with most employees now earning below US$100 after the local currency took a massive beating on the parallel market, while the interbank rate has also suffered, climbing from 1:2,5 and now trading at 1:5,5 although availability and access remains problematic.

Government employees, including teachers, have demanded that their salaries revert to US$ to restore value.
Already, the market is pushing towards re-dollarisation, with most goods and services now being accessed through hard currency or alternatively, at the prevailing interbank rate.

An expert in the financial industry yesterday claimed government tried to meet the legal requirements through the various statutory instruments and the debate should revolve around whether the climate was conducive for the RBZ monetary policy to be sustainable.

President Emmerson Mnangagwa said on Friday that government was working on abandoning the multi-currency regime altogether and introduce the country’s own currency before year-end.

The post ZCTU confronts RBZ in currency battle appeared first on NewsDay Zimbabwe.

COMMENTS

WORDPRESS: 0