HomeBusiness DigestMiners deadlocked over minimum wage

Miners deadlocked over minimum wage

Kudzai Kuwaza

THE Chamber of Mines and the Associated Mineworkers Union of Zimbabwe (Amwuz) this week failed to agree on the minimum wage for 2020 with both parties now engaging in further consultations with their respective constituents, businessdigest has learnt.

The negotiations come at a time the country is facing its worst economic crisis in a decade, punctuated by a debilitating liquidity crunch, an acute foreign currency shortage, rolling power cuts lasting up to 18 hours daily, capacity utilisation of less than 40% and runaway inflation of more than 500%.

Amwuz president Tinago Ruzive told businessdigest this week after their meeting that the two parties failed to reach an agreement on the minimum wage.
“We have met with the chamber and we both agree that there is need to increase the minimum wage. We want a minimum wage of ZW$4 600, while the Chamber is looking at a minimum wage of ZW$2 800,” Ruzive said.

“We could not agree on the figures although both parties are willing to continue negotiations to find common ground.” Ruzive said both parties have agreed to consult their respective constituents before they meet for the third time.

Negotiations over the minimum wage for the year are usually held in the last quarter of the previous year.However, this has not been the case for this year’s negotiation due to the deepening economic decline, characterised by quickening inflation that has decimated wages.

Late last year, the two parties agreed on a 90% increase in the minimum wage, the third time that an increment has been effected in 2019 as a result of the inflationary environment.

The two parties agreed a 35% cost of living adjustment to cushion workers from the current inflationary environment in July last year. Mineworkers had demanded a 50% increment with the employers’ body initially offering a 26% raise before settling for a cost of living adjustment of 35%.

This is on top of the 80% increment they had agreed upon in March as the initial minimum wage for 2019.Mineworkers had also demanded US dollar-denominated salaries, citing that it was the only way they could cushion their incomes from the vagaries of inflation.

The chamber pointed out that it was not feasible, unless mining companies were allowed to retain at least 80% of their foreign currency receipts by the Reserve Bank of Zimbabwe.

However, Freda Rebecca Gold Mine recently started paying its workers’ salaries in US dollars as the local currency continues to lose value.Labour has been one of the major cost drivers for the industry which has battled a myriad of challenges, which include foreign currency shortages and prolonged power outages.

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