EDITORIAL COMMENT: Draft Labour Bill brings win-win situation

via EDITORIAL COMMENT: Draft Labour Bill brings win-win situation | The Herald August 14, 2015

Proposals in the draft Labour Amendment Bill go a long way in producing the win-win position desired by President Mugabe, offering considerable security to employees yet by streamlining retrenchment procedures and imposing time limits for decisions giving employers facing problems a great deal of labour flexibility.

Not everyone will agree that the best balance has been struck between the needs of employers, employees and society at large, but almost everyone should agree that the balance is a lot better than we have seen in the past and the present.

The colonial law of near-summary dismissal, a week’s notice for the many weekly paid staff, saw employers holding all cards. The practical position from soon after independence until four weeks ago was, in retrospect, too cumbersome, gave over-protection to unproductive employees, forced too many inherently viable businesses to close with the loss of all jobs when facing difficulties, and limited job creation as employers were wary of hiring new staff.

The recent ruling by the Supreme Court that dismissal on notice, although far longer notice than the colonial era allowed, was still legal pushed the pendulum very far in the opposite direction.

Experiences in other countries, especially in the bad times as much of the world has come out of the 2008 recession, has shown that greater labour flexibility does improve job creation, allow more growth and allows more companies to stay in business with reduced staff.

However, it can also cause wage levels to stagnate and increase inequalities to undesirable levels. So balance is needed.

The Bill acknowledges that retrenchment can be necessary. But it wants the rules and benefits in place long before anyone needs to retrench.

By putting in a rapid procedure of what can happen if a company is so far gone that it cannot pay these previously approved benefits, it will encourage both employers and their employees to seek solutions early, rather than when disaster sits at the door.

And if retrenchment is the only obvious option, encourage workers to accept this while their employer still has cash to pay the previously agreed benefits.

While the amendment sees retrenchment benefits negotiated in advance by both works councils and employment councils we foresee that the main work will be done by the employment councils. Works councils have generally been less effective over major issues than was once hoped.

Employment councils, with their hard-headed employer and union representatives and their access to professional advisors, who paid by both parties have to be neutral and give sensible recommendations, have grown to become a mainstay of practical labour relations and the Bill now gives them more powers to resolve retrenchment disputes, a sensible choice since they know the problems intimately and can reach acceptable solutions.

The modern world with its competitive open economies and rapid technology changes, requires more labour flexibility than the era of big stable industries. But employers also need committed workforces, who align their interests with those of their employers and society demands fairness and wants disruptions minimised.

The new Bill goes far in proposing solutions that are practical and which meet these essential requirements for all parties.

Proposals in the draft Labour Amendment Bill go a long way in producing the win-win position desired by President Mugabe, offering considerable security to employees yet by streamlining retrenchment procedures and imposing time limits for decisions giving employers facing problems a great deal of labour flexibility.
Not everyone will agree that the best balance has been struck between the needs of employers, employees and society at large, but almost everyone should agree that the balance is a lot better than we have seen in the past and the present.
The colonial law of near-summary dismissal, a week’s notice for the many weekly paid staff, saw employers holding all cards. The practical position from soon after independence until four weeks ago was, in retrospect, too cumbersome, gave over-protection to unproductive employees, forced too many inherently viable businesses to close with the loss of all jobs when facing difficulties, and limited job creation as employers were wary of hiring new staff.
The recent ruling by the Supreme Court that dismissal on notice, although far longer notice than the colonial era allowed, was still legal pushed the pendulum very far in the opposite direction.
Experiences in other countries, especially in the bad times as much of the world has come out of the 2008 recession, has shown that greater labour flexibility does improve job creation, allow more growth and allows more companies to stay in business with reduced staff.
However, it can also cause wage levels to stagnate and increase inequalities to undesirable levels. So balance is needed.
The Bill acknowledges that retrenchment can be necessary. But it wants the rules and benefits in place long before anyone needs to retrench.
By putting in a rapid procedure of what can happen if a company is so far gone that it cannot pay these previously approved benefits, it will encourage both employers and their employees to seek solutions early, rather than when disaster sits at the door.
And if retrenchment is the only obvious option, encourage workers to accept this while their employer still has cash to pay the previously agreed benefits.
While the amendment sees retrenchment benefits negotiated in advance by both works councils and employment councils we foresee that the main work will be done by the employment councils. Works councils have generally been less effective over major issues than was once hoped.
Employment councils, with their hard-headed employer and union representatives and their access to professional advisors, who paid by both parties have to be neutral and give sensible recommendations, have grown to become a mainstay of practical labour relations and the Bill now gives them more powers to resolve retrenchment disputes, a sensible choice since they know the problems intimately and can reach acceptable solutions.
The modern world with its competitive open economies and rapid technology changes, requires more labour flexibility than the era of big stable industries. But employers also need committed workforces, who align their interests with those of their employers and society demands fairness and wants disruptions  minimised.
The new Bill goes far in proposing solutions that are practical and which meet these essential requirements for all parties.