When Jason Chipanda (37) from Kambuzuma township in Harare received a contract termination letter 10 days after the July 27 Supreme Court ruling which confirmed employers’ right to terminate workers’ contracts on three months’ notice without paying a retrenchment package, his heart froze and he felt dizzy as his world crumbled around him.
Although he was aware of companies giving out such letters in the labour market, it never dawned on him that he would be part of the statistics of those laid off using the court ruling, as he believed the company was doing well and making profits — hence the shock. He had worked for five years at a snacks company in Workington, Harare, until his fate was sealed on July 27 alongside other workers.
“The company director called all-of-us to the boardroom and no-one suspected that he was going to issue us with dismissal letters. As people opened their letters, shock and depression was suddenly painted all over their faces,” said Chipanda. “On reading my letter, I immediately thought of how I was going to manage paying rent, other bills and survive. I wondered how I was going to pay school fees for my children and how I would provide for them.”
As someone with a wife and two children, Chipanda was engulfed in anxiety and fear of the future as an unemployed breadwinner.
Chipanda said soon after giving out the letters, the employer ordered them out of the premises saying he wanted to lock his gate. This infuriated the workers who refused to leave without knowing when they would receive their salaries.
On August 17, Chipanda got his three months’ salary, which was not much — US$900 — given that he earned US$300 a month.
He knew his package would not last for long and immediately invested part of the money and bought fruits and vegetables for resale, joining his wife who was already a vendor. But not having a regular salary has been a blow for Chipanda as he is failing to provide for his family like he used to.
“Our lifestyle has since changed,” he says. “We have had to adjust to the paltry income that we are generating. For example, we have stopped buying things like bread every day because we now view such things as luxuries when faced with bills and school fees.”
On a very good day, Chipanda and his wife make US$20, but the good days are usually few. On a regular basis he makes less than US$10. Chipanda has obligations such as paying rent of US$120 per month for the two rooms he and his family occupy in Kambuzuma where they live. He also has to pay school fees for his 14 year old son and 10 year old daughter.
Tough as life may be for Chipanda, he is one of the lucky workers who managed to get a lump sum as a package. In many cases some employees are yet to get paid the three months’ salary while others had their lump-sums wiped out because of bank loans.
“Our employer communicated with our respective banks and advised them that the company would no longer be responsible for any bank loans or arrears made by their former employees as they had terminated their contracts. We all felt this was very unfair because it meant that we walked away with nothing,” said a Baines Avenue Clinic employee who was also dismissed.
She said her package went towards clearing the loan she had taken with a local bank.
The Zimbabwe Congress of Trade Unions estimates that about 30 000 employees were laid off after the court ruling. A large number of those who lost their jobs face a bleak future as they join millions of unemployed Zimbabweans. Zimbabwe’s unemployment rate currently stands at above 85%.
Zimbabwe National Chamber of Commerce chief executive and economist Takunda Mugaga said: “The three months’ notices are just cosmetic in nature given that when served with the notice about 95% of companies will not allow those workers to come back to work. More-over most of these companies will definitely fail to pay the three months salaries let alone the two week salary for every year served; this could be a period when the new labour law will be exposed as I am confident that it will be a major threat to most companies.”
Economist John Robertson said the recent job losses worsen Zimbabwe’s economic situation as the numbers add up to millions of desperate Zimbabweans who are stranded and failing to find employment.
“There are 300 000 students who leave school every year and the more than 20 000 who lost their jobs following the Supreme Court ruling are simply adding on this number and they will have much more difficulties finding jobs because companies are no longer making profits and are struggling to survive,” said Robertson. “These job losses are a serious matter economically as they will lead to further reduction of buying power for insurance policy companies and medical aid institutions. Already these companies did not have a lot of clientele as a large number of Zimbabweans are unemployed and cannot afford to purchase such services. Aggregate demand in the economy will fall, hence a further drop in production.”
Association of Health Care Funders of Zimbabwe chief executive Shylet Sanyanga said job losses would have a negative impact on medical aid societies as people fail to subscribe going on completion of their notices.
“For the medical aid system to operate sustainably the medical aid should be able to collect a regular subscription from a defined source every month, hence structures are key,” Sanyanga said. “Medical aid societies will review the impact of these job losses after the three months’ notice period then put in place necessary strategies depending on the extent of the impact.”