Business / Companies
'Labour Amendment Bill will lead to mass closure of companies'
16 Aug 2015 at 10:36hrs | Views
Confederation of Zimbabwe Industries president Busisa Moyo said the Labour Amendment Bill would lead to mass closure of companies as most would not be able to pay the retrenchment packages.
Tucked at the end of the draft Bill published in the Government Gazette on Friday is just two lines which state that all employees fired in the wake of the landmark Supreme Court of Appeal ruling on Zuva Petroleum managers, are entitled to a minimum compensation of two weeks wages for every year they served.
Clause 18 of the draft Bill reads, "Section 12 of this Act applies to every employee whose services were terminated on three months' notice on or after the 17th of July, 2015."
Section 12C (2) unambiguously states the minimum retrenchment package that should be paid out to employees upon retrenchment or termination of non-fixed employment contract: "A package (herein after called a minimum retrenchment package) of not less than one months' salary or wages for every two years of service as an employee (or the equivalent lesser proportion of one months' salary or wages for a lesser period of service) shall be paid by the employer as compensation for loss of employment (whether the loss of employment is occasioned by retrenchment or by virtue of termination of employment pursuant to Section 12 (4) (a), (b), or (c), no later than the date when the notice of termination of employment takes effect."
The two-week salary for every year served can translate into huge amounts of money for some employees who had worked for many years, some nearing retirement, but who had been forced to walk away from their workplaces with nothing except a promised three-month salary.
Busisa Moyo said "Instead of the mass dismissals, we will witness mass closures or filing for liquidation or application to go under judicial management as most companies cannot afford to pay these packages," Moyo said.
He added: "Most companies are on their knees and struggling to settle even statutory obligations such as taxes to Zimra, pensions and NSSA dues and I think companies should be given a reprieve."
Moyo suggested that the real solution lay in all the parties meeting and having a frank and robust discussion on the state of the economy.
"These things need to be done at a tripartite negotiation forum and we agree on the way forward as business, labour and government," he said.
Tucked at the end of the draft Bill published in the Government Gazette on Friday is just two lines which state that all employees fired in the wake of the landmark Supreme Court of Appeal ruling on Zuva Petroleum managers, are entitled to a minimum compensation of two weeks wages for every year they served.
Clause 18 of the draft Bill reads, "Section 12 of this Act applies to every employee whose services were terminated on three months' notice on or after the 17th of July, 2015."
Section 12C (2) unambiguously states the minimum retrenchment package that should be paid out to employees upon retrenchment or termination of non-fixed employment contract: "A package (herein after called a minimum retrenchment package) of not less than one months' salary or wages for every two years of service as an employee (or the equivalent lesser proportion of one months' salary or wages for a lesser period of service) shall be paid by the employer as compensation for loss of employment (whether the loss of employment is occasioned by retrenchment or by virtue of termination of employment pursuant to Section 12 (4) (a), (b), or (c), no later than the date when the notice of termination of employment takes effect."
The two-week salary for every year served can translate into huge amounts of money for some employees who had worked for many years, some nearing retirement, but who had been forced to walk away from their workplaces with nothing except a promised three-month salary.
Busisa Moyo said "Instead of the mass dismissals, we will witness mass closures or filing for liquidation or application to go under judicial management as most companies cannot afford to pay these packages," Moyo said.
He added: "Most companies are on their knees and struggling to settle even statutory obligations such as taxes to Zimra, pensions and NSSA dues and I think companies should be given a reprieve."
Moyo suggested that the real solution lay in all the parties meeting and having a frank and robust discussion on the state of the economy.
"These things need to be done at a tripartite negotiation forum and we agree on the way forward as business, labour and government," he said.
Source - standard
