‘Court ruling in line with economic trends’

via ‘Court ruling in line with economic trends’ | The Herald July 24, 2015 by Tawanda Musarurwa

The Supreme Court ruling that allows firms to terminate contracts of employment upon issuing a three months notice addresses concerns that employers have had for a long time and an attempt to reverse this could be “catastrophic”, a labour expert has said.

Industrial Psychology Consultants managing consultant Mr Memory Nguwi said it would not be ideal to have an immediate reversal of the court ruling as struggling firms need to streamline operations through headcount reduction.

“It would be catastrophic for the Government to rush to amend the law and reverse this clear interpretation of the law without looking at the concerns that employers have been raising for a long time.

“While the decision (to reverse the ruling) would be very popular with the employees, it would spell doom for the majority of organisations currently struggling. In the long run the ruling will benefit both the employees and employers through job creation.

“In the short term a significant number of employees would have their contracts terminated on notice as employers try to reduce the headcount in line with the prevailing economic conditions,” said Mr Nguwi.

He added that if the economy was performing well, “there would have been less noise about this ruling.”

“Employees are desperate to cling to their jobs as it is the only source of income available. However what is worrying is that some of the employees who have been terminated as a result of this ruling in the majority of cases have gone for more 2 years without pay.

“The big question is are they employed? I do not think there is any employer out there who would want to employ more or less what is optimal for their businesses,” he said.

Already, over 1 000 people have lost their jobs since the court ruling last Friday.

Zimbabwe’s labour laws have been viewed as particularly rigid, particularly in respect of retrenchments – which have become a necessary evil in view of the under-performing economy.

For instance, in respect of retrenchment, Zimbabwe’s labour law states that the employer has to notify the appropriate worker’s committee or trade union giving graphic reasons as to why he wants to retrench.

In the proposal for retrenchment, employer should include names of those to be retrenched and submit financial statements.

A copy of the proposal should also be sent to the labour officer for investigation to see whether retrenchment should be allowed and that all procedures of retrenchment according to labour law are followed.

However, if the labour officer feels the reason for retrenchment are unclear and not in terms of which retrenchment has been agreed upon, it cannot be granted. This has made it difficult for struggling firms to reduce headcount.

Government is even in the process of reviewing the country’s labour law to make it more conducive to the needs of industry.

According to Mr Nguwi, the country’s inflexible labour laws have a negative impact on the attracting of foreign direct investment (FDI).

“A number of potential investors are reluctant to employ large numbers of people precisely due to the difficult they will experience should they want to restructure and reduce staff,” he said

“If the Government want the situation prevailing before this ruling they must allow employers the flexibility to employ people on short term fixed contracts that are easy to terminate should the business environment deteriorate or alternatively set minimum standards for someone to qualify for a retrenchment, for instance, after working for three years or more anything less than that employer should be able to terminate on notice.”


  • comment-avatar

    My God!!!!

    Someone with a working brain in Zim. Truly astonishing

    “It would be catastrophic for the Government to rush to amend the law and reverse this clear interpretation of the law without looking at the concerns that employers have been raising for a long time.”