BUSINESS leaders have expressed outrage over the ruling by Chief Justice Luke Malaba yesterday that obliges employers to compensate workers they dismissed on three months’ notice three years ago, a development which they say will seal the fate of already struggling companies.
By Kudzai Kuwaza
Dismissing a challenge by Greatermans Stores yesterday, Malaba said the amendments to the labour laws that compel employers to go the retrenchment way if the parties are not in agreement apply in retrospect. Thousands of workers, whose contracts were terminated on notice as a result of the Supreme Court ruling of July 2015, will now be paid damages for loss of employment. A ruling by the late Chief Justice Godfrey Chidyausiku allowed employers to dismiss workers on three months’ notice without a retrenchment package resulting in the loss of thousands of jobs.
According to a survey by the Employers’ Confederation of Zimbabwe, 9 115 workers lost jobs as a result. Trade unions estimate that 30 000 workers lost jobs.
The judgement comes at a time when business is weighed down by a number of constraints among them a debilitating liquidity crunch, severe cash shortages and capacity utilisation of less than 50%. This could further cripple the operations of companies that dismissed workers resulting in the loss of more jobs.
Zimbabwe National Chamber of Commerce president Divine Ndhlukula said the latest judgement flies in the face of President Emmerson Mnangagwa’s mantra that Zimbabwe is open for business.
“This is actually bad news for business,” Ndhlukula said. “Business is grappling with many operational issues. Companies are already steeped in debt and, because of foreign currency shortages, they are buying forex at a premium to prevent businesses from shutting down and now this. It is a surprise and it flies in the face of Zimbabwe being open for business and Ease of Doing Business reforms.”
The ZNCC president said that they are also affected by steep labour costs which are higher than those of their peers in the region, adding that the development will threaten a lot of jobs.
“As a business leader, I am quite disappointed,” Ndhlukula said.
Emcoz president Matthew Chimbghandah concurred with Ndhlukukla. “The ruling just pours cold water over what the President has been preaching about being open for business,” Chimbghandah said. “It is a huge albatross across the necks of employers.”
Malaba’s ruling comes after remarks he made last year supporting retrospective application of the law.
In his presentation at a judges’ symposium, Malaba said that parliament was within its rights to apply the law retrospectively.
“In any event, nothing in the constitution bars the legislature from enacting retrospective legislation,” Malaba said at the symposium.
“The legislature gets its power from people in terms of section 112(1) of the constitution. Thus one of the main duties of the legislature is to use the law as a tool of social engineering in order to promote harmony in society. Therefore, where a situation arises which threatens that harmony, the legislature has an obligation to cure this, even if it means enacting retrospective legislation.”