HomeAnalysisWorkers Day: Much ado about nothing

Workers Day: Much ado about nothing

AS workers the world over commemorate Workers Day on Sunday, the few Zimbabweans who are still in formal employment are not faring much better than the multitudes who are unemployed as they are burdened by the devastating effects of the country’s economic implosion. This has seen most of the employed Zimbabweans going for months without remuneration.

Kudzai Kuwaza

File photo: A closer look at companies’ balance sheets shows that directors’ emoluments account for the lion’s share of the total expenditure for salaries and wages in most organisations.
File photo: A closer look at companies’ balance sheets shows that directors’ emoluments account for the lion’s share of the total expenditure for salaries and wages in most organisations.

Indeed since last year’s commemorations, the situation for workers has worsened considerably. Only two months after the celebrations thousands lost their jobs through a July 17 Supreme Court ruling that allowed employers to dismiss workers on three months’ notice without a retrenchment package. This, according to trade unions, resulted in nearly 30 000 people being thrown onto the streets, although employers, armed with a recent survey carried out by the Employers’ Confederation of Zimbabwe, put the figure at 9 115.

Whatever the real figure, there is no doubt that the formal sector has been decimated by the dismissals as most companies are grappling various challenges that include a debilitating liquidity squeeze, low capacity utilisation of 34,3% and lack of affordable funding, hence capitalisation problems.

But for the remaining workers’ lives have been far from rosy.

Most have had to endure the none payment of salaries in the worst case scenario, while others have had to contend with staggered salaries, salary cuts and reduced working days which translate to reduced salaries.

In addition, many workers have had to handle the slashing of a number of benefits including school fees, fuel allowances and medical aid in addition to having their pension schemes stopped, leaving them vulnerable in their old age.

The salary and benefits cuts have been introduced as part of strategies by companies to survive in the tough economic environment.

Zimbabwe’s largest mobile operator Econet Wireless, the third largest company on the Zimbabwe Stock Exchange by market capitalisation, cut salaries by 35% across the board in July last year, while state-owned telecommunications firm Telone in August last year cut salaries by 15% to lower operating costs by 20% and align staff costs to 32% of revenues.

Telone and Econet are just two of the numerous companies that have cut their workers’ salaries or benefits as most companies have introduced similar measures.

But there could be more bad news for workers because companies are looking at further cutting salaries and benefits.

The Confederation of Zimbabwe Industries (CZI) in October last year proposed that all salaries be slashed by 50% in a bid to ensure internal devaluation of the United States dollar — Zimbabwe’s main currency — and to improve competitiveness.

CZI president Busisa Moyo said an enabling legal instrument was required to enforce the cutting of salaries.
“Our initial desktop review shows that if all institutions — government departments and private sector companies — were given the right, through a legal instrument, to reduce salaries by 50%, the results would be positive as it follows that 80% of businesses and institutions will move into an operating surplus position or net profit scenario,” said Moyo.

For most employees, however, it already feels as if they are earning less than 50% of their salaries as companies stagger their wages over long periods of time resulting in some workers going for indefinite periods without renumeration.

National Railways of Zimbabwe employees have downed tools after going 15 months without being paid their salaries.

That the striking workers are begging for food from well-wishers reflects their desperate situation.

Though many other employees have not resorted to industrial action like NRZ employees, they have had to endure various forms of humiliation and difficulties because of companies’ inability to pay full salaries on time. This has ranged from being threatened with eviction or being evicted by landlords for failing to pay rentals on time, being turned away from hospitals or pharmacies because of suspended medical aid cards to being forced to withdraw children from private schools to cheaper government or council schools.

A pharmacist who operates from the city centre said he has had to turn away scores of customers seeking prescribed medicine because their employers would have failed to pay monthly contributions.

“It is sad that those who come to buy medicine on medical aid will only find out it has been suspended at the counter,” the pharmacist said. “There has been an increase in such cases and this shows that companies are struggling to make ends meet.”

As if that is not bad enough, workers in formal employment, who constitute just 5% of the country as revealed by an International Labour Organisation report, still have the axe looming over their heads. After government amended the Labour Act to oblige employers to pay a minimum retrenchment package of two weeks for every year served by an employee, companies are being forced to further reduce the head count after last year’s dismissals as the economy shows no signs of imminent recovery.

This has removed the job security employees used to enjoy leaving them on shaky ground.

Economist John Robertson said there is not much to celebrate on Workers’ Day for Zimbabwean employees.

“There is very little to celebrate given the high number of unemployed people,” Robertson said. “Government should be embarrassed when commemorating the day.”

He added that the number of those currently employed formally is similar to those in the 1960’s when the country’s population was much smaller.

Robertson said job creation was only possible through significant levels of investment. This kind of investment, he said, is only possible through repealing toxic laws such as that of indigenisation which had disempowered thousands through job losses rather than empowering the populace.

Workers though can celebrate that they are now more protected after the labour law amendments pushed through Parliament last year, according to the Zimbabwe National Chamber of Commerce chief executive Chris Mugaga.

“The workers can celebrate the new labour law which protects them more, but is anti-friendly to business,” Mugaga pointed out.

He added that for the majority who were operating in the informal economy and “feeding from hand to mouth”, the day will be of no significance to them.

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