Saturday, 15 August 2015

Compensation for fired workers

The thousands of workers dismissed on three-month notices will be entitled to compensation for termination of their contracts, if the Labour Amendment Bill gazetted last Friday becomes law.

Legal experts also say the proposed new law could get them back their jobs as they say the July 17, 2015 Supreme Court ruling that triggered the spate of sackings was relative to Zuva Petroleum.

Clause 5 of the Bill says those who lose jobs on contract termination are entitled to minimum retrenchment benefits that include one month’s salary for every two years of service.

This will apply to both retrenchees in general and workers whose contracts were terminated on or after July 17, with employers required to pay up “no later than the date when the notice of termination of employment takes effect”.
 Compensation for fired workers
Clause 5 repeals parts of Section 12C of the Labour Act dealing with retrenchment procedures and creates the compensation provision in 12C(2).

It reads, “Unless better terms are agreed between the employer and employees concerned or their representatives, a package (hereinafter called ‘the minimum retrenchment package’) of not less than one month’s salary or wages for every two years of service

as an employee (or the equivalent lesser proportion of one month’s 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(4a)(a), (b) or (c), no later than date when the notice of termination of employment takes effect.”

Section 12(4a) prohibits employers from terminating an employment contract on notice unless such termination is in terms of an employment or model code.

It also makes termination possible where both parties mutually agree in writing, or if the employee was engaged for a fixed period.

Workers with open-ended contracts and whose employment is terminated in terms of subsection 4(a) will be eligible for compensation.

Clause 18 reads, “Section 12 of this Act applies to every employee whose services were terminated on three months’ notice on or after the 17th July, 2015.”

In an interview with The Sunday Mail, Public Service, Labour and Social Welfare Minister Prisca Mupfumira said on-notice dismissals based on the July 17 Supreme Court ruling violated tenets of social justice.

She said the amendments would benefit employers and employees, while boosting productivity.

“We are making the law specific to people who lost jobs as a result of the judgment. All of them will get more compensation on top of the three-months salary they received.

“The principle of social justice does not condone that; this is why we are amending the law. You cannot just fire people without giving any other reason other than the judgment. That kills society.

“It is unfair for people to go to the streets when they have served an employer for several years and spent their energies and time on a job, only to lose those jobs that easily. That is against social cohesion.”

Minister Mupfumira added: “We have been working round the clock to expedite this legal process. I am glad that we have reached this far and come to this stage where President Mugabe has recalled Parliament to specifically consider this Bill. I made this request to the President through the Office of the Chief Secretary.

“The President responded in the quickest time possible – on the same day. It shows our commitment as Government. I am hopeful that by next week the Bill will have been passed into law.”

On productivity, she said, “The amendments are not just for employees alone, but for employers, too. As President Mugabe stated, we want a win-win so that productivity drives worker-employer relations.

“Employees should not undermine their work, but know that the prime objective is for them to be productive. On the other hand, employers should desist from making employees the scapegoats for everything that affects their companies.”

Describing the amendments as a “victory for workers”, legal expert Professor Lovemore Madhuku said the Bill’s provisions could be applied retrospectively

“All employers who fired people using this judgment took a risk. What these amendments mean is that employment termination was unlawful. Some people have misinterpreted that the law does not apply in retrospect and that those who have been fired are not entitled to anything.

“That’s nonsense! The law can, in fact, apply retrospectively as long as it explicitly states so. It would have been some form of discrimination to leave those who lost their jobs on account of the July 17 judgment in the cold, while leaving others protected for the future.”

Regarding the role of the different arms of State in the matter, he said: “It is allowed in a democracy – under checks and balances – for one arm of the State to control the excesses of the other. The judiciary gave an application that led to serious social dislocation. The other arms of State cannot fold their hands; they are now amending the Act.

“The judiciary has no information on what happens on the ground; only the Executive and Legislature understand the social effects. The judiciary is just there to interpret the law.

“The law that takes away the right of an employer to dismiss a worker on notice is a good law the world over because the contract of employment is all about social justice and cannot just be terminated. The employment contract forms the basis of our society in the same way that marriage shapes our society. If we allow these two contracts to be dismissed wantonly, we are killing society.”

Labour law expert and researcher Ms Rutendo Mudarikwa added: “The Bill will go a long way in mending the legal lacuna under the current system. It balances economic development and social justice.”

On July 17, Chief Justice Godfrey Chidyausiku and four Supreme Court justices ruled that the common law position placing employees and employers at par was operational.

They were deciding on a case in which two former Zuva Petroleum managers were challenging termination of their contracts by notice.

Several private and State-linked firms have dismissed thousands of employees on the strength of this judgment, prompting Government to step in.

On Friday, President Mugabe summoned the Senate and the National Assembly from recess to consider the Bill.

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