‘Labour Bill designed to fix business’

via ‘Labour Bill designed to fix business’ – NewsDay Zimbabwe August 20, 2015

THE Employers’ Confederation of Zimbabwe (EMCOZ) says the Labour Amendment Bill seemed to have been crafted to “fix” business and does not encourage investor participation in the economy.

The Bill sailed through the National Assembly on Tuesday and will be rubber stamped in the Upper House, Senate, today. President Robert Mugabe will sign it into law after the Bill is approved by both Houses of Parliament.

Speaking to NewsDay yesterday, EMCOZ president Jack Murehwa said that Labour Act needed to be revised in order to make it more-friendly to investors.

“The Bill reneges completely on this understanding and seeks to make the amended Labour Act less friendly to current and future investors and this is regrettable. To a large extent, the Bill ignores business’ input into the process and seems to have been crafted to “fix” business,” Murehwa said.

“It also perpetuates the misconception that business carries a delayed liability when keeping a permanent employee in service.”
Murehwa said it was an apparent prevailing philosophy embedded in the proposed amendments which scares potential investors and perpetuates hardships for current investors.

He said: “In the end, businesses are being run into liquidation to avoid these additional liabilities and new investors are reluctant to operate under such conditions. In the final analysis, everybody, in government, in business and in labour loses out.”

Amendments to the labour legislation were necessitated by a July 17 Supreme Court ruling which gave employers the nod to terminate employee contracts on three months’ notice.

Over 20 000 workers across all sectors of the economy have lost their jobs as companies took advantage of the ruling to shed off “excess jobs”.

Murehwa said businesses would continue to trade into liquidation and new investors would be reluctant to deploy their capital in such an environment in the short term.

In the long term, he said, the “perception of potential investors on the nation’s views on attracting investment will be tarnished and therefore keeping investment, both local and foreign, at bay”.
“So yes, it falls far short of addressing the real issues.”

Murehwa said business believed it was “a real tragedy that from a point where there was a meeting of minds at the tripartite level for the past five years and we were heading to positive closure, suddenly there is a divergence of views and business is being demonised”.

“We remain hopeful that the Tripartite Negotiating Forum will be back on its rails to prepare the environment that will encourage new investors and protect current businesses from trading into liquidation,” he said.

The EMCOZ boss said the amendments would drive struggling businesses to trade into liquidation faster and more workers would lose their jobs.

“Investors will be uncomfortable to deploy their resources with the promised artificial liabilities. The government will continue to lose revenue from closing businesses and employees no longer at work,” he said.

“In short, the Bill guarantees the perpetuation of the current sad situation within the economy which will inevitably continue to shrink.”