28 February 2013

Zimbabwe: Labour Broking Ellegal in Zim

Government recently warned companies that hire middlemen and other companies to avoid engaging workers directly and paying gratuities, that the practice is illegal. The practice is commonly known as labour broking or sub-contracting. Employers have also been accused of casualising labour.

Workers that have been mostly affected by the practice of labour broking are in the food industry and beverage manufacturing, where employers are in the habit of hiring middlemen.

Workers in furniture manufacturing have mostly been affected by casualisation of labour where workers are given fixed term contracts for more than 10 years before unceremoniously being dismissed.

The director of labour administration in the Ministry of Labour and Social Services Mr Paul Dzviti said labour broking was illegal according to the Labour Act (Chapter 28:01).

"Labour broking is mostly prevalent in South Africa and Namibia, but here it's illegal and perpetrators face prosecution," he said.

Investigations by The Herald revealed that more than 10 companies in Harare had engaged brokers who now "own" the workers.

A director at Weberly Investments, Mr Osnath Dube, confirmed that they had been engaged by National Foods as brokers.

"Workers should not complain about our agreement as they are paid well and in time. The minimum wage is US$317, and they should be grateful," said Mr Dube.

However, he said they did not pay the workers bonuses or other incentives, as their agreement with the company did not take this into account.

Mr Dzviti said workers in a particular industry should be paid directly by the company that they work for.

He said labour broking, casualising and sub-contracting had recently been contentious issues in Namibia as they were being abused and the dispute spilled into that country's Supreme Court.

Mr Dzviti's declaration follows a landmark arbitration award last year in favour of Stanley Takaendesa versus Schweppes (Pvt) Ltd ordering his reinstatement.

Arbitrator Mr Rodgers Matsikidze ruled that the engagement of Lorimark as a broker by Schweppes did not nullify Takaendesa's contract of employment.

Said Mr Matsikidze: "What is clear from the two contracts is that on the switch from Schweppes to Lorimark, there was no break. The employee only changed the employer but his duties remained the same."

Mr Matsikidze said that nothing changed except that Schweppes was now paying Lorimark to act as an employer on its behalf.

"What is clear is that Lorimark is not the employer, but Schweppes. To allow employers to use middlemen in order to avoid statutory regulations will be to put to ransom the workforce," said Mr Matsikidze.

Labour analysts have expressed concern that brokers offered commercial services yet the workers belonged to the manufacturing sector.

The payment of gazetted wages will eventually become a problem. Even if the workers win and arbitration award, it cannot be enforced as the broker has no assets that can be attached.

Out of the more than 100 000 workers in the food industry, only 18 000 are under direct employment and the NEC, while the rest's wages and working conditions are haphazard. Complaints to the NEC have been fruitless and unions suspect that they are now dining with the employers, some who have a habit of sub-contracting certain departments to the labour brokers.

Workers in the furniture manufacturing sector continue to be marginalized by labour casualisation.

Last week 30 workers at Bowline Furnitures staged a peaceful demonstration after their contracts were unceremoniously terminated.

Some of the workers had worked for more than 15 years and were told they were not entitled to any gratuity or severance packages.

Last year, the Labour Court delivered a death knell on casualisation of labour in Zimbabwe. The final nail in the coffin was hammered in the case of Lifestyles Zimbabwe Furnishers versus Admire Mawapo and 295 Others. (LC/H/02/2012).

LZF appealed to the Labour Court against the decision of an Arbitrator. The company employed the 296 workers at four different companies.

The workers were made to sign weekly contracts and the employment periods varied from three to 10 years, some of the LZF companies were in the Export Processing Zones (EPZ).

In December 2005, the company terminated the workers' contracts by not renewing the contracts, with the workers claiming to be permanent employees.

On reference to arbitration, the Arbitrator was asked to determine whether the workers were to be deemed to be on a contract without time of limit of consecutive months and whether those contracts terminated in December 2005 were unlawfully terminated.

The Arbitrator found that all employees that were engaged on weekly contracts by LZF undertakings for aggregate periods of more than six weeks in the four consecutive months following the coming into force of the Labour Relations Amendment Act of 2002 became employees on contracts without limit of time.

The employer did not legally terminate their contracts of employment in December 2005 since it thought that they were contract workers, when they had, in fact, became permanent employees.

The Arbitrator went further to order that in the event that reinstatement was no longer possible, the parties should, within 14 working days of receipt of the Arbitral Award, agree on the damages to be paid to each employee in lieu of reinstatement.

Failure of this would result in each party referring the matter back to the Arbitrator for quantification of damages.

The Arbitrator further held that any employees who were re-engaged by LZF should be treated as permanent employees from the time of the original contract.

As regards those who were previously covered by the EPZ Act, they became permanent employees from the dates their contracts exceeded the casual savings period calculated from the date the Labour Relations Amendment Act No. 7 of 2005 became operational.

This was because the LR Act repealed the provisions of the EPZ Act, that excluded the operation of the Labour Act to employees in the EPZs.

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