WITH companies closing and the informal sector growing, how are Zimbabwe's businesses navigating the critical issue of year-end bonuses? As civil servants receive a festive season payout, what does this mean for the wider employer-employee relationship? To get answers, our business reporter Belinda Chiroodza (BC) spoke with Nester Mukwehwa (NM), executive director of the Employers Confederation of Zimbabwe (Emcoz). They delve into the economic landscape, new regulations, and the search for stability in a volatile labour market. Find the key insights from their discussion below:
BC: As employers, what is your stance on paying bonuses to workers?
NM: A bonus is a thank you. For an employer to pay it, they must be thanking workers for tangible productivity that has occurred during the year. A bonus can only be paid if it can be sustained. There is no one-size-fits-all approach to bonuses. We advise employers to look into their finances, productivity, and sustainability before deciding to pay a bonus. It would be of no value to pay a bonus and then fail to reopen after the Christmas break. Each organisation or employer must take their own initiative to determine whether they will pay that bonus, considering the various sectors involved and any changes implemented by the Finance minister regarding the ease of doing business.
BC: Some companies are closing, and others are undergoing corporate rescues due to the regulatory environment regarding formalisation and taxes. What is your comment on that?
NM: First and foremost, one is in business for profit, and one can stay in business only if it is sustainable. If it is no longer sustainable, then scaling down is necessary. There is no way that a business can close without valid reasons. I cannot accurately state how many have closed because I do not have the figures before me. However, the increased informalisation also indicates that formal employment is scaling down, and people are moving in that direction.
BC: Finance minister Mthuli Ncube has put some slashes to taxes and levies for the ease of doing business. Is it enough, or do you want to see more?
NM: What you are witnessing with the easing of parameters for business performance comes from dialogue. Social dialogue is not a one-day occurrence. It is a continuous process. We welcome the government’s engagement and applaud them for addressing some of the issues that have concerned employers, such as high licence fees and multiple fees, which have been relaxed. We look forward to more such changes through ongoing dialogue.
BC: How do you plan to address wage gaps and ensure fair compensation for workers in the current economic climate as employers?
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NM: Collective bargaining occurs at three levels: at the Wage Council and at the company level, where shop stewards and management can assess their environment and identify gaps. When discussing a wage gap, it is essential to consider what you are comparing it to. There is a National Employment Council (NEC) rate set for each sector, which serves as a starting point for companies. If a company cannot afford that, then they can go back to the NEC and apply for an exemption. If employers feel they can go beyond the minimum, the sky is the limit, especially if they can sustain it.
BC: Generally, how are companies performing, and what changes would you like to see?
NM: With the easing of various issues, such as the ease of doing business, we expect a more positive response. Those in the informal sector will likely see this as an opportunity to formalise since there will be reduced bureaucracy regarding health and regulations. We anticipate that more small to medium enterprises (SMEs) will grow as a result.
BC: Are there any specific policies or regulations that you would like to see implemented?
NM: Yes, we anticipate signing off on the social contract this year to operationalise its key socio-economic pillars. This contract addresses critical issues we face.
BC: Considering that some employers report an inability to pay, can you elaborate on how this issue affects economic growth, particularly in relation to the target of achieving a mid-economy status by 2030?
NM: In discussing the nexus between economic performance and the outlook for 2026, it was mentioned that to be considered a mid-economy by 2030, we need to grow the country by 10%. Effective discussions are ongoing regarding how to achieve this growth, particularly in sectors like mining and agriculture. We believe we should explore other sectors of the economy to enhance performance.
BC: You identified informality as a challenge in labour relations. How can we address this issue?
NM: Addressing informality involves understanding the key reasons why some choose not to formalise. This includes reviewing taxes, particularly the presumptive tax, to make it as low as possible to encourage businesses to formalise. The more people who formalise, the more revenue can be generated. Relaxation of certain levies or licence fees has already begun, and we hope this will assist the sector. We also anticipate the formalisation strategy being signed off, as the role of social partners is crucial in policy-making forums for employment and labour issues.
BC: How has the relationship between Emcoz and other employment councils been?
NM: Emcoz is the apex body for all employers and employers’ associations in Zimbabwe, cutting across all sectors. We collaborate with most of our members, but there are free riders who want to benefit without fulfilling their obligations. We associate with employment councils and individual employers, as employment councils are formed by employer associations and trade unions.
BC: What are the membership fees, and what do you think is preventing employers from joining?
NM: The fees are not substantial, as they are based on the number of employees. For example, for zero 0 to 60 employees, the current fee is US$600, which totals to US$1 200 half-yearly. When you consider the value for money with the services provided under the Emcoz umbrella, it is an investment.
BC: What are the key challenges associated with implementing production-based remuneration?
NM: This situation calls for more dialogue. From my observations, trade unions have raised questions about measuring productivity. We need to establish parameters so that if targets are exceeded, it can be recognised as productivity-related compensation. However, this requires significant dialogue and engagement at both the company level and potentially as a collective bargaining agenda item.
BC: What is your opinion on de-dollarisation?
NM: Ongoing dialogue is essential. All these concerns are outlined in the social contract, which is why we are unpacking this economic cluster for a comprehensive understanding. We need to engage further and avoid rushed decisions. With the target set for 2030, we have a four-year planning window to achieve a clear roadmap through consistent communication.
BC: What is your business outlook for the upcoming year?
NM: The business outlook for the upcoming year appears positive, with a slight improvement anticipated. The government has reviewed several parameters that were previously hindering employer growth. We are looking forward to the 2026 budget and what it will hold for businesses.
