This article is based on Chapter 3 of the latest book “A PRACTICAL STEP-BY-STEP GUIDE TO RETRENCHMENT LAW IN ZIMBABWE” which is available in hard copy.
One particular aspect of our retrenchment laws has drawn significant attention in our analysis of these provisions.
The retrenchment process, in cases where no retrenchment package has been agreed upon between the parties, requires additional procedural steps to ensure that both the affected employees and the retrenchment board are duly notified. This can be done without any negotiations with the employees. This means that an employee’s contract may be terminated without the employer being strictly bound to uphold the employee’s right to be heard or negotiate.
A potential criticism of this framework is its resemblance to the situation in 2015 following the Zuva Petroleum judgment, where employees could be dismissed with nothing more than three months’ notice. While the legislature has since removed the direct termination of permanent contracts on notice, the current retrenchment laws are not significantly different in their effect.
This is mainly because the statutory minimum retrenchment package—equivalent to one month’s salary for each year of service—does not offer adequate protection for employees with shorter service periods. An employee with less than a year of service may receive compensation amounting to less than a month’s salary upon termination, which, in our considered view, is not far removed from the challenges employees faced in the aftermath of the Zuva Petroleum ruling.
The situation is even worse for fixed-term contract employees, who can be terminated with notice and without being afforded a retrenchment package. It is important to note that even though the Act provides for the capping of fixed term contracts, where the renewal of fixed term contracts is limited for a certain period, this capping hasn’t been applied to certain sectors. At the time of authoring this book, for example, the mining industry does not have any limitation on how many times a fixed-term contract can be renewed. This means that an employee can be on a fixed-term contract for an exceptionally long period of time and may also lose his or her job through the termination of the contract on notice. The retrenchment provisions do not assist such an employee. This, in our view, is akin to the situation after the Zuva Petroleum judgment of 2015.
That said, we acknowledge the legislature’s efforts in introducing provisions that allow employees to challenge the adequacy of the retrenchment package by presenting evidence that the employer has the capacity to offer a higher payout. This aspect is discussed in further detail below from a procedural and substantive law perspective.