This is the Financial Gazette front page from last Thursday. It represents a major shift of attitude in the government.
Up until now it has been very difficult to get rid of staff without paying a massive (read punitive from the employer’s point of view) retrenchment package. For example, if I were to lay off any staff it would have cost me 6 months notice, 2 months payment for every year employed and one month re-location package. Scenarios for a layoff would have included a takeover of my business by anyone with the correct contacts. As I only rent the premises and have little in the way of assets it would have effectively wiped out the company.
The labour law to which the paper refers changes a lot of that. Now it is only necessary to give 3 months notice. While I have not read the new legislation it is fairly obvious why it has come about. The government wants to lay off a lot of the civil servants which it can no longer afford to pay. Already a substantial number from the state controlled ZBC (Zimbabwe Broadcasting Company) have gone. Rather than simply not pay them and get lumped with the bill later it has changed the law to suit itself. Interestingly there are a number of parties involved who are ready to challenge the legislation. Good luck to them! It is more than a little ironic that this is the government that introduced the heavily workforce biased legislation in the first place to gain the support of the working class.
The labour legislation, as it was, was deeply unattractive to would-be investors. Also unattractive is the current indigenisation policy, embedded in law, whereby companies must be at least 51% owned by indigenous Zimbabweans. While it was never completely clear what indigenous meant I knew that as a Zimbabwe born white I was not included. The reality was that the government (and those with the correct contacts) were after the bigger more profitable companies. So does the second tier title on the front page of the paper represent an about-turn by the government? Well, if one cares to read a bit further the answer is not quite so obvious as the title implies. Elsewhere in the international press there does seem to bit a bit of a charm offensive by the President, Robert Mugabe, to woo investors from the West. This really does represent a huge change of attitude.
Up until now the West has been the cause of a lot of our problems, according to the government owned media. Our biggest creditor at the moment is China who has been very generous with loans. When things really started to go pear-shaped last year the finance minister went begging to them but came back empty-handed. So to go begging to our former nemesis, on whom our woes were blamed for imposing sanctions, really is a change of attitude. It shows just how deep the financial crisis is.
It is well known that the police have been told to go out and collect their own wages so we are used to being endlessly stopped for both real and imagined traffic violations but last week it really was a frenzy. Even the ZBC got in on the act stopping vehicles to check if they had valid radio receiver licences. Perhaps it was a fear of being laid off under the new legislation or perhaps they were actually getting their notice payments. This week has so far been eerily quiet. Maybe it will all start again towards the end of the month when pay day looms.