THE year 2015 was a torrid year for Zimbabwean workers, but it could be nothing compared to this year, if early indications are anything to go by.
The formal job market in the country has been seriously depleted by company closures and massive job losses caused by a debilitating liquidity crunch, lack of cheap funding, low capacity utilisation of 34,3% and erratic power supplies among other problems.
The layoffs have continued into 2016 with 400 workers in the textile and food industries losing their jobs in January alone after several companies failed to open in the new year, according to the Zimbabwe Congress of Trade Unions (ZCTU).
ZCTU acting secretary-general Gideon Shoko said there could be more companies that failed to re-open this year and the labour union will only know the full extent of the closures and resultant job losses after completing their ongoing exercise.
“The statistics are not pleasing because the number of companies, which are operating, continue to decrease, those which are open are unable to pay their workers and others have resorted to introducing short working hours,” Shoko said in an interview last week.
Evidence of the devastating impact of company closures and job losses were revealed by Finance minister Patrick Chinamasa during the presentation of the 2015 national budget.
Chinamasa said 4 610 companies closed shop resulting in the loss of 55 443 jobs between 2011 and 2014.
This is also in addition to an estimated 30 000 jobs that were lost last year after a July 17 Supreme Court ruling allowed employers to dismiss workers on three months’ notice without paying a retrenchment package.
The impact of the Supreme Court ruling prompted government to push through amendments to the Labour Act obliging employers to compensate workers dismissed with two weeks’ salary for every year served.
This, among other amendments, has been strongly resisted by employers who have made a High Court application against the amendments.
For most employees who are in formal jobs, working conditions have become a nightmare. As many companies struggle to keep their heads above water, workers are not paid on time and many have gone for several months without being paid.
In some cases, such as that of Hwange Colliery, workers have gone for 30 months without a pay cheque.
A floundering economy has not only hit the workers’ pockets, but has affected their pensions and medical aid benefits as employers struggle to keep up with the monthly installments. This has resulted in workers failing to access treatment due to non-payment of their medical aid.
The failure by companies to pay timeously has also resulted in many workers failing to meet their social obligations, including paying rent and school fees.
In addition, the government has been left reeling as a result of company closures due to a decline in revenue inflows. Zimbabwe Revenue Authority chairperson Willia Bonyongwe revealed last week that individual tax, which includes Pay As You Earn (Paye) missed the annual collections by 7% and was 15% below previous year collections at US$777,83 million.
Corporate tax, being tax on company and business profits, contributed US$424,7 million to tax revenues in 2015, which was 5% below target. The corporate income tax debt was US447,97 million at the end of December 2015, up from US$188,68 million the previous year.
Zimra missed its annual tax collection targets for 2015 by US$220 million — falling 3% below 2014 figures at US$3,5 billion, an indication of tight fiscal space.
“The revenue head was negatively affected by retrenchments and reduction of remuneration packages by companies during the year as they embarked on initiatives for survival. This trend is expected to continue,” said Bonyongwe.
The loss of jobs has severely depleted government coffers to the extent that it has failed to pay its 550 000 workers on time. So dire is the situation that civil servants went for the Christmas holidays without being paid their December salaries for the first time since Independence in 1980 with payment of their bonuses staggered over a period of three months. Chinamasa announced last week that the bonuses will be paid between February and May this year.
Economist and former Zimbabwe National Chamber of Commerce president Oswald Binha believes job losses are set to worsen this year.
“The conditions prevailing in the country are not conducive for formal employment,” Binha said. “Given the prevailing conditions more jobs will be lost this year as all the pointers are negative.”
He predicted that there will be more people “selling airtime and trotters” this year as the formal job market continues to shrink.
Employers’ Confederation of Zimbabwe executive director John Mufukare concurs with Binha.
“With the economy continuing to head south, job losses are inevitable,” Mufukare points out. “The fact is that the job losses are a clear sign that the economy is still contracting and unless the performance of the economy improves, workers should brace for worse this year.”
The predictions by Binha and Mufukare are substantiated by the application by companies who are still looking to retrench workers despite dismissing employees using the Supreme Court ruling as viability problems continue to take their toll.
At least 20 companies have applied to the Retrenchment Board in January this year but want to be exempted from paying packages according to a member of the board.
The extent of how desperate unemployment is in Zimbabwe is evidenced by government’s plan to export graduates to other countries such as South Sudan, Botswana, Angola and Namibia. This comes at a time when there are at least 2 800 nurse graduates churned out of the country’s nursing schools, who are unemployed after government imposed a recruitment freeze in the health sector.
However those who will be exported to other countries might have to part with a quarter of their salary monthly. Government is considering taking 25% of their salary every month, which will be deposited into a pool monitored by the government.
“There should at least be a percentage that will be remitted back to the country or directly into a government pool,” Caleb Mharapira, a senior official in the Ministry of Higher Education was quoted as saying.
The year 2016 sadly, is most likely to be another annus horriblis for the worker.