HomeBusiness DigestBrett Chulu: Labour’s reform proposals no wish list

Brett Chulu: Labour’s reform proposals no wish list

LABOUR  law reforms are at the draft stage. Paid study leave of  up to 12 months, paid sick leave of up to six months, expanded striking rights (24 hours instead of two weeks notice) and payment of termination packages within 14 days are some of the major labour changes proposed. Predictably, business, as represented by major business bodies is not smiling.

We shall critically look at the first two proposed changes.
Paid study leave up to 12 months
This proposal has the effect of making study leave a statutory benefit. This is problematic.

  • First, subtle and less obvious incremental costs will arise in the case an organisation has to find an external temporary replacement for the duration of the study leave. These costs may include recruitment, relocation and learning costs such as wastage. Add to that termination costs. Research by Remchannel shows that the costs of replacing an employee range from 80% to over 100% of the annual total guaranteed pay. Expected high numbers taking up study leave will drive staff costs northwards, a euphemism for inflation and retrenchment.
  • Second, by making study leave mandatory, we run the gauntlet of disputes of right, which may end in the Labour Court, possibly escalating into arbitration. Where an organisation’s progression policies for pay and promotion are performance-related serious conflicts may arise. Annual pay increments based on performance could see an employee on study leave missing out on annual increases and bonuses. Traditional pay structuring prevalent in Zimbabwe means benefits are mostly dependent on basic pay. An employee might forfeit increments in pension and medical aid, for instance. Will this constitute an unfair labour practice? This is a question the Labour Court might have to rule on in future. Add to this scenario a further complication. What happens if an employee, by necessity, has to get either maternity leave or an extended sick leave, both paid, soon after the study leave?
  • Third, the organisation may be forced to support studies that are not aligned to its learning and development needs. A learning and development department, as a centre of expertise ensures that an organisation’s skills are in line with current and future business needs. While, there is nothing wrong with an employee studying a pursuit of their choice, it hardly justifies a business supporting studies that might not be of strategic importance. Drawing parallels between the public service where employees are granted study leave on reduced pay is faulty. In the public service, study leave with pay is for learning pursuits that enhance the skills needed in the public service. Thus the granting of study leave is aligned with the mandates of different public service entities.
  • Fourth, if the study leave is granted indiscriminately, post -leave expectations may cause further conflict. After completing their studies employees may expect either a promotion or a pay rise. Disputes on pay rise and promotion are disputes of interest (not a violation of labour laws). An employee is allowed to approach the Labour Court to solve this dispute. The resultant emotional, reputational and financial costs must be budgeted for.

In my opinion, this proposal should be entirely dropped.       Instead, the Labour ministry should work on establishing sector-based training authorities that will approve sector-supporting learning and development programmes. The Aids Levy can be reduced by 1% to create a learning and development levy.
Paid sick leave up to six months
Currently, sick leave is governed by section 14 of the Labour Act, introduced in 2002 after the repeal of the previous section 14 of the Labour Relations Act. The improved section 14 of the Act allows an employee 90  days’ sick leave on a full salary and a further 90days on half pay, effectively giving 135 days of guaranteed full pay. Should the employee go beyond 180 days of sick leave during one year of service, an employer may terminate the employment of the sick worker on health grounds.  A sick person may elect to either use accrued vacation leave on half pay or without pay during their period of sickness.
In South Africa the current Basic Conditions of Employment Act (BCEA) gives the minimum benchmarks for sick leave. The concept of sick leave cycle is used. Sick leave cycle is a period of 36 consecutive months’ employment with the same employer dated from either the date of first employment or date following the lapse of the previous cycle. The minimum paid sick leave is six weeks per sick leave cycle.  One outstanding feature of the sick leave provisions in South Africa is flexibility as according to section 22 the number of paid sick days can be increased by reducing pay proportionally.
Namibia’s Labour Act of 2007, section 24(1)(a) and (b) require a minimum of 30 days’ paid sick leave per sick leave cycle for an employee working five days a week and a minimum of 36 days per sick leave cycle for an employee working 6 days a week. The sick leave cycle in Namibia is as South Africa’s BCEA definition.
According to Botswana’s amended Employment Act of 1982, section 101(1) a qualifying employee is entitled to 14 days’ paid sick leave (basic pay) in any one year of continuous service.
Some organisations voluntarily exceed the basic minimum. For instance, Elias Motsoaledi Local Municipal of South Africa’s qualifying employees are entitled to 80 days’ paid sick leave per sick leave cycle. One leading institute in Botswana has the following paid sick sequence: an initial six months of paid non-accumulated sick leave per year; second, an accrued annual leave and; third, six months on half pay.
Minus the enhanced paid sick proposal, Zimbabwe’s current statutory paid sick provisions placed side by side those of South Africa, Namibia and Botswana appear extravagant. On a regional basis, there is actually a strong case for Zimbabwe to reduce the statutory paid sick leave entitlement, handing business and insurers the opportunity to share the costs of extended sick leave.  My opinion might court the ire of Zimbabwe’s organised labour. Enhanced paid sick leave should be left to individual organisations, leaving current statutory sick leave provisions unchanged. Flexibility along SA lines is desirable.
The labour-business stand-off boils down to ideological canon.
Is social justice an ultimate end in itself and is social justice possible without economic wherewithal?
South Africa has been more pragmatic. Its BCEA states upfront that the purpose of the act is to advance economic development and social justice.  Blind social justice can make goods and services uncompetitive.
Zimbabwe labour’s proposals are not a wish list. They merely reflect its ideological preferences. It’s their democratic right. But this must not crowd out other views.
Social justice without economic rationality amounts to populism. Economic rationality without social justice is pauperisation.
Business’ perennial weakness is allowing labour to shape the social agenda. Business can pre-empt by replacing social justice with social responsibility.
True corporate social responsibility extends beyond doing good works directed at external communities. Complete social responsibility encompasses the internal community, the employees and their families.
Both business and labour should dismount their ideological high horses.

Share your views on this matter at brettchulu@consultant.com.

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