ZIMBABWE, which has been struggling to attract foreign direct investment (FDI) is working towards relaxing labour laws to make it easier for employers to dismiss workers without following long and time-consuming procedures, a move that has raised suspicion government is trying to entice more Chinese capital into the country.
Finance minister Patrick Chinamasa in his budget statement in December said government was reviewing the labour law to make it easier in the hiring of employees and increase productivity.
“I am, therefore, calling upon my colleague, the minister responsible for labour, Honourable (Nicholas) Goche, to seriously consider amendments to the Labour Act that relates work to productivity,” Chinamasa said adding: “It is also necessary that we introduce in our labour laws flexibility in the hiring of workers, as well as alignment of wage adjustments to labour productivity.”
Chinamasa said the changes were to make the laws “flexible and linking remuneration to productivity, that way promoting interests of both the investor and employees”.
The Labour Relations Act, in its current form, makes dismissals and retrenchments a slow process as employees have to go through a number of hearings. The hearings start at company level and a dissatisfied party can appeal to labour courts.
Failure to follow laid down procedures in dismissing an employee have in the past cost companies dearly as they have to pay damages in lieu of reinstatement.
However, in a country with unemployment hovering above 80% and where most employees take home about US$200 per month on average, far less than the poverty datum line currently at US$573, labour analysts say the law review will poison relations with labour unions but curry favour with the Chinese who have a reputation of abusing employee rights.
Concerns over Chinese companies’ treatment of employees have been raised in different fora in the country, with the matter raised no less than three times in parliament last year.
The Chinese were accused of subjecting employees to long working hours, poor working conditions, arbitrary dismissals, beatings at the workplace and paying very low wages.
Zimbabwe Congress of Trade Unions (ZCTU) acting secretary-general Gideon Shoko said the review as suggested by Chinamasa was meant to benefit all employers including senior government officials who own farms.
“The changes in labour laws will benefit not only the Chinese but all employers especially Zanu PF ministers who have of late become businesspeople and farmers who need cheap labour,” Shoko said.
“The laws will benefit employers while suppressing workers who are not allowed to go on strike without notification.”
Director of the Labour and Economic Development Research Institute of Zimbabwe Godfrey Kanyenze concurred with Shoko saying the law review was retrogressive and will not spur employment creation as evidenced by countries that have gone that route.
“This is retrogressive and will encourage retrenchment rather than employment creation as it does not balance the security interests of employees with those of employers as espoused by the International Labour Organisation (ILO) that calls for regulated flexibility,” Kanyenze said.
Kanyenze added that it was fallacious to say labour flexibility would attract investment.
“Real foreign investors are not for flexible labour laws but seek skilled employees and resources,” he added.
International Socialist Organisation leader Munyaradzi Gwisai said government was simply pursuing the same neoliberal policies that were introduced under the coalition government of 2009-2013.
“Government has become a willing servant of capital and it’s ridiculous to say labour laws need to be made flexible considering that 85% of workers are earning below PDL and over 5 000 workers were retrenched in the past 13 months alone,” Gwisai said.
More than 700 companies were liquidated in 2013 throwing thousands of workers out of employment, many of whom are now eking out a living in the informal sector.
Gwisai warned that unions must be wary of reforming labour laws as it is the only global capitalist response to production issues. He likened it to calling for austerity measures for any economic problem.
“The working class must organise and defend the 2002 Labour Act that ensures job security,” he added.
AfriAsiaKingdom analyst Anymore Taruvinga said the reforms, while necessary, will torch confrontation between the state and unions.
“The labour law changes will not be welcome by most trade unions, but make business sense. Labour should be rewarded in relation to its productivity and poor performers should not be protected by the law,” Taruvinga said.
While government seems set on its course, literature from ILO shows that labour flexibility does not increase productivity except pacify employers.
Janine Berg and Sandrine Cazes in a paper titled: The Doing Business Indicators: Measurement Issues and Political Implications found that linking labour flexibility to productivity was myopic.
Berg and Cazes said: “The index is based on a myopic view of the labour market that if adhered to cannot guarantee improved economic performance or employment. It thus sends misleading policy messages that, if implemented, risk hurting workers but also business and the economy in general.”
Goche’s phone went unanswered on Tuesday and Thursday when contacted for comment.