HARARE (Reuters) - Zimbabwe has lost 20,000 jobs in the last month after a court ruled that companies can fire workers by giving them three months’ notice, the main labor union said on Sunday, as the government moved to amend the labor law to stop further losses.
Businesses in the southern African country, which has a jobless rate of more than 80 percent, are struggling with electricity shortages, high finance and labor costs and cheap imports, which has seen many firms fail to pay wages or forced to shut.
The latest wave of job losses are leading to renewed anger against President Robert Mugabe’s government, which promised 2 million jobs after winning the last elections in 2013.
Japhet Moyo, secretary general of the main Zimbabwe Congress of Trade Unions, said a July 17 Supreme Court ruling had opened a floodgate for dismissals that have seen private firms and state-owned entities laying off thousands of employees.
Instead of the cumbersome and expensive process of paying severance packages, businesses now only have to give workers three months’ notice to terminate their employment.
“More than 20,000 workers have lost their jobs due to the Supreme Court ruling and as a union we are worried that if the situation is not urgently addressed more workers will continue to lose their jobs,” Moyo told Reuters.
Mugabe’s government on Friday published a bill seeking to amend the labor law to force employers to pay severance packages to workers fired after the court ruling and set tougher conditions for future dismissals.
Under the proposed amendments, employers can only dismiss a worker on three months’ notice if there is agreement with the employee or if the worker is on a fixed-term contract, otherwise they are obliged to pay retrenchment packages of at least two weeks’ salary for every year served.
Parliament, which had been on recess until the end of this month, has been recalled to debate the bill on Tuesday. Mugabe’s ruling ZANU-PF party holds a parliamentary majority and wants to fast-track the adoption of the amendments this week.
Busisa Moyo, president of the Confederation of Zimbabwe Industries (CZI), which represents mostly manufacturers, said most businesses could not afford to pay retrenchment packages.
He said some companies, including state-owned enterprises, had accumulated salary arrears of up to a year and were behind on tax and pensions payments.
“So to ask a company that is already struggling to pay salaries to pay a retrenchment package will only force that business to close or go under judicial management,” CZI’s Moyo said.
Reporting by MacDonald Dzirutwe; Editing by Digby Lidstone