ZimAlloys faces $2m lawsuit over salary underpayment 

Source: ZimAlloys faces $2m lawsuit over salary underpayment – NewsDay Zimbabwe May 28, 2018

AT least 229 employees of the now-defunct Gweru- based ferro-chrome producers, ZimAlloys (Pvt) Ltd, have approached the High Court seeking a court order to institute legal proceedings against their paymaster, who is said to be owing them $2 003 618 in underpayment of salaries and allowances. In their court papers and through their lawyers, the miners, led by one Chereni Mhlanga, filed a chamber application on May 23, 2018 and the matter is yet to be set down for hearing.


In his founding affidavit, Mhlanga said: “This is a chamber application for leave to institute legal proceedings against ZimAlloys (Pvt) Ltd. As a matter of procedure and in terms of the order placing the first respondent (ZimAlloys) under final judicial management, we must obtain leave of this honourable court before we can institute proceedings against it. It is, therefore, my prayer that we be granted leave to sue first respondent.”

According to the court papers, sometime in July 2013, ZimAlloys was placed under judicial management with a view of resuscitating and turning around its business, at which time the judicial manager implemented austerity measures to contain costs in a bid to turn around the firms’ business.

During the same year, the National Employment Council (NEC) for Ferro-Alloy Industry registered a collective bargaining agreement for a 10% wage increase, but ZimAlloys applied for exemption from implementing it, which was granted up to December 2013.

The workers said after the expiry of the exemption period, ZimAlloys reduced wages and salaries in the range of 15% to 25% and, in some cases, scaled down some employees’ grades and also reduced their housing allowances along with their basic pay.

Again, the NEC for Ferro-Alloy Industry is said to have registered another collective bargaining agreement for a wage increase of 8,2% effective January 2014 and ZimAlloys applied for another exemption, which was granted up to September 2015, but thereafter, it did not implement any increase, prompting the workers to take the matter to the labour officers.

NEC designated agent, Princess Chachoka, who heard the matter on January 11, 2017, said: “It is against the above facts that applicants (employees) are claiming underpayment of wages and salaries totalling $2 003 618. The applicant appreciates the fact that respondent (ZimAlloys) was placed under judicial management to turn around its fortunes from a dying position.

“The respondent submitted that it is still financially struggling and that it is operating at a loss due to high production costs and depressed ferro-chrome prices. Negotiations with potential investors to resuscitate the company are underway.

“Having taken into full account of the facts and evidence placed before me by the parties, I therefore make a ruling that in the absence of approval to reduce minimum wages through exemption means by the National Employment Council for the Ferro-Alloy Industry, the applicants are legally entitled to the gazetted minimum wages of 10% given in 2013 and 8,2% awarded in 2014 respectively.”