Employers contest new labour law

high courtFidelis Munyoro Chief Court Reporter
The Employers’ Confederation of Zimbabwe (Emcoz) has approached the High Court to challenge the constitutionality of amendments to the Labour Act ratified by Parliament last month, chief among these that companies pay fired workers in retrospect.

Government amended the labour law following a July 17 Supreme Court ruling that allowed employers to terminate employment contracts on three months’ notice without severance packages.

Emcoz says sections of the new law infringe on the rights of employers as provided for by the landmark court ruling.

In an application filed at the High Court this week, Emcoz contends that the infringement of employers’ rights was caused by a knee-jerk reaction by the State to what it perceived as a social ill.

“That the process of legislating the Amendment Act was reactionary is evidenced in the lack of thinking, consultation and research required to guide action and lawmaking,” said Emcoz executive director Mr John White Mufukare in an affidavit accompanying the application.

“There is little doubt that the Amendment Act will cause hardship to business in the country by further stifling economic growth and causing massive unemployment, the very antithesis of what the State seeks to achieve.”

He argued that by fixing a cost to hiring and relinquishing labour, the State had unwittingly diverted scarce resources away from productivity, which is the only guarantor of employment and job creation.

To support its case, Emcoz is prepared to bring to court statistics showing factors that it says have led to the closure of businesses, liquidation and insolvency, with labour relinquishment related costs.

“The State is aware of this as its own publicly held entities such as NRZ, Air Zimbabwe and ZBC, among others, have faced viability and turnaround challenges due to labour-related costs,” he argued.

Mr Mufukare argued the curtailment of the employer’s right to terminate an employment contract on notice led to the viability challenges faced by many companies.

“The Amendment Act therefore unnecessarily limits the enjoyment of employer’s rights without reason, fairness or justification and should be declared unconstitutional and invalid.”

To this end, Emcoz wants Section 4(b) of the Amendment Act No 5 of 2015 to be declared unconstitutional and invalid as well as Section 5 of the same Act that created Section 12C (2) of the Labour Act nullified.

It also seeks to nullify Section 16 of the Labour Amendment Act no 5 of 2015, which amended Section 93 of the Labour Act and Section 18 of the amended Act. Section 4(b) of the Amendment Act reworks section 12 of the Labour Act by adding a section 12 (4) (a) which provides that:

“No employer shall terminate a contract of employment on notice unless—(a) the termination is in terms of an employment code or in the absence of an employment code, in terms of the model code made under section109 (9); or (b) the employer and employee mutually agree in writing to the termination of the contract or (c) the employee was engaged for a period of a fixed duration or (d) pursuant to retrenchment in accordance with section 12C.”

The provision modifies the common law right of an employer to terminate an employment contract on notice.

They also want Section 18 of the Amendment Act to be declared unconstitutional because it provides for workers fired before the amendment of the law to be given retrenchment packages.

“The principle of law states that no law can retrospectively take away rights granted at the time the new law was absent,” said Mr Mufukare.

The Supreme Court ruling sparked a widespread of dismissals, which saw close to 30 000 workers being left jobless.

Government intervened with a cocktail of reforms to the Labour Act to halt the employment haemorrhage.

Emcoz cited Public Service, Labour and Social Welfare Minister Prisca Mupfumira as the respondent in its application. Minister Mupfumira has 10 days to respond to the application.

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