Zimbabwe passes bill that makes retrenchment harder

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The approval came as the capital’s municipality mulled laying off more than 3 000 workers to reduce its wage bill

Zimbabwe’s parliament has approved a bill that will make it harder for companies to fire employees as well as reinstate an estimated 20,000 workers who lost their jobs in the last month.

The Employers’ Confederation of Zimbabwe says the Labour Amendment Bill passed by parliament on Wednesday seemed to have been crafted to fix business and does not encourage investor participation in the economy.

The state-owned Herald newspaper reported on Wednesday the bill passed late on Tuesday in the House of Assembly and now awaits a rubber-stamp from the Senate.

The approval came as the capital’s municipality mulled laying off more than 3 000 workers to reduce its wage bill – the latest in a slew of firings following a court ruling that allowed employers to dismiss workers after giving three months’ notice.

Amendments to the legislation were necessitated by a Court ruling which gave employers the nod to terminate employee contracts on three months’ notice.

The Confederation’s president, Jack Murehwa said that the Labour Act needed to be revised in order to make it more-friendly to investors.

On July 17th the Supreme Court ruled that employers can dismiss employees on three months notice and without exit packages.

That sparked a wave of dismissals, which prompted President Robert Mugabe to recall MPs from a recess to debate the labour amendment bill. It seeks to plug the job losses and reinstate dismissed workers or ensure they receive their retrenchment packages.

What is remarkable about the passing of the bill is that legislators from both ZANU PF and the opposition MDC, usually split on partisan lines, were united in assenting to it. It now awaits approval by Zimbabwe’s senate, later today, before President Mugabe signs it into law.

However employers fiercely oppose the law particularly the retrospective provision that reverses sackings made since July 17th. One of the leading private sector groupings has indicated it plans to challenge the law in the constitutional court.

Several companies long saddled with huge wage bills and battling to meet operational costs cashed in and sacked workers, including mobile service provider Econet and the state-owned Zimbab

The government introduced the labour amendment bill last Friday, stating “no employer shall terminate a contract of employment on notice unless the employer and employee mutually agree in writing to the termination of the contract”.

It also compels employers intending to sack workers to give notice to a works council as well as the government retrenchment board, to determine whether the decision is justified.

The Senate is expected to rubber-stamp the changes to the law on Thursday before long-ruling President Robert Mugabe signs it into law.

Zimbabwe’s economy has been on a downward spiral for more than a decade with slow growth, low liquidity and high unemployment.

Many companies have closed, downsized or relocated to neighbouring countries.

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