50% salary cut for NRZ workers

THE National Railways of Zimbabwe has cut salaries for its workers by up to 50 percent citing viability challenges in the face of declining volumes.

The giant parastatal has over the years suffered losses of over $200 million and ballooning arrears to different creditors including workers.

Management and the board have since hinted on plans to offload close to 1,400 workers from an estimated 6,000 strong workforce as part of measures to tame the ballooning wage bill.

Disgruntled workers' unions confirmed the "desperate" pay cut decision to Business Chronicle yesterday but said they were not consulted.

"It's true that they have cut our salaries. This was communicated to us (workers) last week and it's a very desperate situation," Railway Artisans and Engineers (RAE) union president, Mr Shadrack Mutakurwa, said.

"The memo we saw says the salary cut is subject to workers not getting less than $150. Whatever they (management) are doing they can explain better but this is a difficult moment for workers."

Zimbabwe Amalgamated Railway Workers Union (ZARWU) leader Mr Kamurai Moyo also acknowledged the move.

"We received this message through complaints from our members. We were told the memo was written by the general manager to directors for them to communicate to workers.

"To our shock, this was not given to us on paper as unions. We have since written to management to say if this is true we take serious exceptions to it," said Mr Moyo.

"It's a shock to talk of a salary cut for workers who haven't been paid for 16 months and have got loans to pay back. Surely we wonder what's the worth or significance of going to work?"

In the said memo that was directed to the company's management and leaked to a local online news agency, The Source, National Railways of Zimbabwe (NRZ) general manager Engineer Lewis Mukwada advised of the salary cuts, which he terms new "predictable net salary levels," adding that a recent strike by company employees, which went on for nearly three months from March, had added to the company's financial problems.

NRZ owes workers over 15 months' worth of unpaid salaries, amounting to a total of $87 million.

"Whilst there has been some additional tonnage due to the maize and sugar cane traffic, the challenges facing the organization still persist," The Source reported yesterday citing the memo.

"The improvement in volumes moved is therefore not yet at the level which can sustain the current predictable salary. In an effort to ensure that employees are paid a salary every month it has been found necessary to review the predictable salary levels."

The highest salary grade would receive 40 percent of their salaries, while the lowest would get 50 percent of their current earnings with effect from July 2016, the memo showed.

"It's a not a new thing but a principle that we adopted early this year. NRZ pays workers in batches depending on the income that the organisation would have generated," acting public relations officer Mr Martin Banda was quoted by The Source.

"We pay them according to what we would have generated for that particular period and then settle the balance later after getting the money."
Comment could not be obtained from Eng Mukwada. However, NRZ board chairman Larry Mavima dismissed the issue saying the said memo was false.

"There is nothing like that. What you are talking about is a fabrication by people who want to fuel disgruntlement in the country," he said adding that the company could not make such a decision without approval from the parent ministry (transport).

A labour expert who requested anonymity for professional reasons said NRZ has the right to adopt such a stance given the viability challenges it is facing.

"In such a situation normally both parties engage in a reasonable manner and negotiate. A reasonable court can grant the employer's request but that depends on the circumstances," said the expert.

A report by the Auditor General on NRZ's 2014 accounts showed that its freight unit was generating annual revenue of $91,2 million, but incurring costs of $103 million.

The passenger unit had annual revenues of $3,2 million, with costs over three times more at $10,9 million.

Figures from the national statistics agency also show a pattern of continued decline in revenue from $112 million in 2010 to $75, 8 million in 2014.

The NRZ is one of the 10 state enterprises targeted for reform by the Government.

At its peak the company used to employ about 15,000 people with a downstream impact on other industries.