Govt orders halt to golden handshakes

Source: Govt orders halt to golden handshakes | The Herald November 18, 2016

Innocent Ruwende Municipal Reporter—
Government has ordered local authorities to stop paying exit packages to executives and other employees leaving council service following outrageous severance demands and golden handshakes given to departing council executives.

Golden handshakes are contractual clauses mostly used to attract high quality top executives who may be reluctant to move from other companies. The package mostly includes cash, equity and locally it may also involve vehicles used by the executives.

The handshakes have courted controversy as they are often not performance-based and have no other conditions attached to ensure the executives work in the best interest of the employer.

In an interview yesterday, Local Government, Public Works and National Housing permanent secretary Eng George Mlilo said retiring or departing council employees should only be given their pensions at the Local Authority Pension Fund while those who are dismissed get only their contributions from the fund.

He said council officials were being awarded hefty retirement packages that crippled service delivery. Recently, Government blocked the payment of a $300 000 golden handshake to outgoing Victoria Falls treasurer, Mr Thembinkosi Khumalo saying it would not allow a situation where council employees are becoming richer than their employer.

Speaking at a luncheon to mark the official opening of the 4th Session of 8th Parliament of Zimbabwe recently, Local Government, Public Works and National Housing Minister Saviour Kasukuwere said local authorities were not charity organisations.

“I have said to the permanent secretary, let us put our foot down immediately. No! If you are retiring and have served the country, thanks very much, you have served enough. We cannot pay you another $300 000.

People are getting much richer than the authorities themselves. We need to change that trend and make sure that at the end of the day, services are given,” he said. As part of his package, Mr Khumalo (60), who had served the municipality for 25 years, was also set to get a Toyota D4D double cab vehicle worth $35 000 which was bought in 2014, a laptop, and a cellphone.

Former Harare town clerk Dr Tendai Mahachi last year made headlines after demanding a hefty package. Dr Mahachi, who earned more than $27 000 monthly, wanted Harare council to pay him over $100 000 for every year served, among other benefits since he joined council in 2007.

He also wanted a council house, No 9A Lanchaster Road, Belvedere and to be allowed to buy a commercial stand measuring 6,400 square metres at the price equivalent to 33 percent of its market value.

However, Harare offered Dr Mahachi a $150 000 retirement package and an option to buy his Toyota VX Land Cruiser at book value for his contribution and service to the city. Eng Mlilo said golden handshakes were bleeding councils, most of which were failing to provide basic services to residents.

“That golden handshake has cost councils an arm and leg. If two officials leave in the same year, a council will be brought to a halt. Local authorities have been contributing to the LAPF.

That is where their (executives’) money is. No council should pay anything on top. We are also seeking to suspend other benefits given to sofficials.” Eng Mlilo said perks such as holiday allowances, which were given to council executives to cushion them during the hyperinflationary period, should no longer apply.