Uproar over regulations on cutback of workers

Industrialists are outraged by government’s new stringent retrenchment regulations which, among other things, require companies to disclose salaries of executives and fees for board members, businessdigest has learnt.

Kudzai Kuwaza

Industry sources described the move as “populist”, adding this will lead to an increase in company closures and unemployment.

Concerned by the increasing frequency of retrenchments, labour minister Prisca Mupfumira said the process to approve retrenchment applications will be more stringent as the ministry will need to look at company’s salary structures particularly executives and management remuneration.

In line with the requirements, companies are required to provide details of fees the board of directors get and the difference in the wage bill after the retrenchment exercise has been implemented.

Sources told businessdigest that some members of the Business Council of Zimbabwe which include the Confederation of Zimbabwe Industries, Chamber of Mines and the Zimbabwe National Chamber of Commerce met informally and expressed shock at the new proposals.

“Members of the business community met informally last week and the feeling is that the move by government is populist and it is a classical example of the government changing goalposts as and when it sees fit,” a source said. “ They feel that this is the sort of government policy inconsistency they always complain about. On one hand, government introduce labour law reforms that make it easier for employers to retrench yet on the other hand they want to make it impossible with all these requirements.”

The industrialists, according to sources, were particularly irked by the requirement to submit salaries for executives and board members, arguing that it was not government’s business to know how much money directors and board members of private companies received.

“Employers felt that the move by government drags them back to an issue they thought had been resolved and this will not bring about any progress at all,” sources said. “ They are adamant that there is no way that they will submit such information. All it will do is put a moratorium on retrenchments and companies will close rather than retrench.”

Contacted for comment on the new retrenchment regulations, Employers Confederation of Zimbabwe executive director John Mufukare declined to comment.

“We will not comment on the issue until after we meet the minister,” Mufukare said.

The topic is likely to take centre stage when the Tripartite Negotiating Forum meets in two weeks time. Mufukare said the director of labour, Clemence Vusani had indicated this at the meeting Emcoz hosted in Kadoma between business and legislators last week.

This development comes at a time when more than 600 workers have been retrenched this year.

This adds to an estimated 7 000 workers who were laid off last year, according to sources at the Retrenchment Board.

At least 52 companies retrenched last year.

These include Grain Marketing Board, Zimbabwe Fertiliser Company, Nissan Zimbabwe, PG Industries, First Mutual, Tristar Insurance, Cargill, Beta Bricks, Tetrad Investment Bank, Stewart Bank, CFI Holdings and Metbank.

This has had a devastating impact on the government’s revenue base which prompted Finance minister Patrick Chinamasa to announce looming retrenchments and the suspension of bonuses up to 2017 only for President Robert Mugabe to shoot him down.

One thought on “Uproar over regulations on cutback of workers”

  1. citizen says:

    When a company runs out of revenue it collapses whether the government approves it or not.

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