Govt tightens retrenchment regulations

via Govt tightens retrenchment regulations | The Herald April 25, 2015

Government has tightened retrenchment regulations, making it difficult for companies to willy-nilly throw people into the streets.

New requirements include submission by companies of the salary structure of the executive and management as well as allowances paid in cash or otherwise.

Some firms are threatening economic growth through unjustified retrenchments which mostly affect low-grade workers while top executives are left out.

The protection of employees is strongly entrenched in the Labour Act and the Constitution of Zimbabwe.

Public Service, Labour and Social Welfare Minister Prisca Mupfumira said companies or institutions wishing to retrench should first get approval from the Government.

“They should also submit the total wage bill of the company, highlighting how much will be saved by the proposed retrenchment,” she said while responding to questions sent by The Herald.

“They should also submit the company board of directors fee structure, including allowances paid to the directors. They should also submit measures previously undertaken by management and workers to avoid retrenchments.”

Minister Mupfumira said Government would use the information to assess the relevance of the proposed retrenchment and how it would benefit or turnaround the company.

She warned employers against providing false information, saying they would be prosecuted.

“If a company does not comply with the new requirements, their application will not be processed until all the relevant information has been provided. If the information they provide is false, they are liable to face prosecution.”

Minister Mupfumira said the Retrenchment Board, set by Government in terms of the Labour Act, was there to solve retrenchment issues within the prescribed 14 days.

“By request or where the Retrenchment Board recognises challenges in retrenchments, it assists by assigning officers who will go to the establishment or company and mediate with a view to secure an agreement,” she said.

“The fact that the Retrenchment Board is tripartite in nature with members from trade unions and employers’ association adds value to the process. The Board fosters principles on equity, justice and fairness. Informed, well-grounded and practical retrenchment package are recommended to the Minister.”

The Retrenchment Board, she said, also verified, processed and approved voluntary retrenchment agreements.

“All cases are dealt with on a case by case basis since all companies do not perform the same and therefore are not in the same predicament.”

Zimbabwe Congress of Trade Unions secretary general Mr Japhet Moyo, said the move by Government was spot on as thousands of people were being thrown into the streets through unjustified retrenchments.

“We have actually written to the Minister thanking her for such a wise move,” he said.

“Over the period, as labour, we have complained that some of the retrenchments or restructuring exercises were not genuine. There is not proof that these exercises were going to save some of these entities.”

He said it was worrying that those mainly affected were the ordinary workers while the top management escaped.

“You would find incidents where 20 people taking a combined $5 000 while top management would take two times more than the 20 people,” Mr Moyo said.

“We once wrote to a bank where 44 workers were earning less than one manager. In most cases it is the top management that is bloated. So we are comfortable with these recommendations because people were being offloaded into the streets and at the end of the day Government’s social welfare department has to take care of those people.”


  • comment-avatar

    Why doesn’t government just take over these businesses? Apparently government knows better then business people how to run their own businesses. If government just ran everything then I’m sure all would be better, right? The problem isn’t that businesses cannot access capitol because of bad government economic policies, or that they are struggling to bring their costs down to be more competitive with regional competitors, it’s simply that managers and directors want to protect their fat cat salaries and retrench workers willy nilly, right?

    When will this country get some intelligent people in government who understand the big picture? What’s not to understand about creating a business friendly environment that increases FDI? This is a typical example of government shooting itself in the foot, which happens a lot these days.

    • comment-avatar
      Chanisa 7 years ago

      Good questions there.

      “Some firms are threatening economic growth through unjustified retrenchments which mostly affect low-grade workers while top executives are left out.”

      Is this populist garbage targeted to the top executives or to the low-grade workers? Who employed the low-grade worker initially? Why would any company want to keep a low-grade worker? Who is responsible for the survival of the company between the top executive and the low-grade worker?

  • comment-avatar
    Mpisi 7 years ago

    Govt must make available salary structures all depts. commissions authorities etc funded by the taxpayers before demanding evidence of private sector salaries. Eg PSMAS Dube, City of Harare officials Zimra officers. Tell us now. And we want RBZ accounting. The sabotage lies with Govt not the private sector. Pathetic policies, lies and deception.

  • comment-avatar
    grabmore 7 years ago

    No money for wages but not allowed to retrench. perhaps the best policy then is to just copy government where you have hundreds ‘attending’ work but each just running his or her own private business from their desks Like a sort of giant ghost worker factory where no body is accountable and certainly no body pays any taxes.