Editorial Comment – Dismissals: Govt intervention vital

National labour policies are very difficult to draw up, but are needed and do require a balance to be struck between needs of employers and security for employees.

If employers do not have reasonable flexibility in adjusting the size of their workforce they will be reluctant to hire extra staff in good times and potentially viable companies may go under in bad times simply because they cannot afford their wage bill.

So fewer new jobs are created and all in a bankrupt company lose their jobs rather than just a proportion being sent home to save the rest. So employers have a point that is not entirely selfish.

At the same time most people think that firing long-service loyal staff on short notice is simply unfair. And the effects on society can be bad.

A general feeling of insecurity does no society and no family, any good; banks tend to be difficult about mortgages and loans; workers tend to look for short-term gains rather than the long-term prospects of their employer; and the backbone of any successful enterprise, employees having the same goals as employers, is diminished or eradicated.

So there are practical as well as ethical arguments for granting reasonable security to employees.

A right to dismiss staff on short notice can be acceptable in societies with unemployment insurance schemes, or having something close to full employment. For example even in the United States, which allows many employers to lay-off staff almost at will, there is unemployment insurance and a fairly low level of unemployment.

So it works. And even in the US union agreements frequently modify the right of near instant dismissal. In Europe, with higher rates of unemployment, there are better unemployment benefits so no one suffers totally if fired.

Zimbabwe has neither unemployment insurance, nor near full employment, nor agreements on dismissal built into its agreements under national employment councils.

At independence we inherited labour practices built for the white population, which did have full employment. These were considered unjust for the majority, which did not. So a lot of changes were made.

Now the Supreme Court has found that the colonial system, of dismissal without cause on fairly short periods of notice, was retained and the belief was incorrect that dismissal was impossible without disciplinary action or a complex procedure involving permission from the labour authorities.

We need to put in place, quickly, a system that is fair, which provides reasonable security to staff and which encourages job creation and allows viable concerns in trouble to downsize to stay in business.

Our suggestion is to allow forced redundancies at the discretion of employers, but to legislate a table of benefits that have to be granted.

Voluntary redundancy agreements in recent years have tended to centre on a month’s pay for each year worked, plus at times a relocation allowance. Previous agreements have seen two or even three months pay for each year worked.

So it should be possible to have a schedule of automatic redundancy benefits that are a lot better for long-term staff laid off than the three months notice that has been discovered to be the law, yet grant employers automatic rights to make redundancies without having to get permission from the authorities.

Such a scheme would help meet the needs of employers and yet still grant employees a degree of fairness and security, especially time to find a new job, become self-employed or learn a new skill. The law would also have to make it clear that dumping expensive workers and replacing them with cheaper workers was not allowed.

There are tax concessions for redundancy pay, so even for recently hired staff being laid off, where the three months pay in lieu of notice is fairer, this should still be formalised as redundancy pay.

At the same time our national employment councils need to take on board the need to negotiate procedures and benefits when staff are laid off. But this will take time so at least for a while the Government has to intervene and lay down minimum procedures and benefits and needs to do that promptly.

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