Africa-Press – Zimbabwe. THE United States government has noted Zimbabwe’s strict labour laws make it extremely difficult for employers to adjust employment in response to economic downturns, as retrenchments continue to rise across industries.
In its recently released 2025 Zimbabwe Investment Climate Statement, Washington noted the country’s rigid labour framework, which limits layoffs and restricts contract terminations, often leaving businesses unable to adapt to economic pressures.
Back in September, Public Service, Labour and Social Welfare minister Edgar Moyo announced that the government would no longer tolerate improper retrenchment exercises and announced investigations into ongoing layoffs.
Moyo’s comments came as, amid deepening economic chaos, many companies have embarked on retrenchments to cut costs, only to rehire the same positions months later under temporary contracts.
This is a practice, unions allege, is meant to avoid paying more experienced workers higher wages and benefits.
“The country’s labour laws make it very difficult for employers to adjust employment in response to an economic downturn except in the Special Economic Zones (SEZs) where labour laws do not apply.
“Outside the SEZs, the employer must engage employees and their representatives and agree to adopt measures to avoid retrenchment,” the State Department said in its latest report.
“If the measures fail, the employer can retrench and pay an all-inclusive package of one-month salary for every year of service or the pro rata share thereof.
“Labour laws differentiate between layoffs and severance with the former falling under retrenchment where the retrenchment law must apply. The law does not accept unfair dismissal or layoffs of employees.”
The 2015 and later 2023 amendments to the Act only permit terminations of contracts to be in terms of a registered code of conduct, expiry of a contract of fixed term duration, or mutual agreement.
In the absence of an employment code of conduct, a Zimbabwean employer must show that the dismissal was carried out in accordance with the terms of the model or national code of conduct.
“Collective bargaining agreements apply to all workers in an industry, not just union members. Collective bargaining takes place at the enterprise and industry levels.
“At the enterprise level, work councils negotiate collective agreements, which become binding if approved by 50% of the workers in the bargaining unit. Industry-level bargaining takes place within the framework of National Employment Councils,” the State Department said.
“Unions representing at least 50% of the workers may bargain with the authorisation of the Minister of Public Service, Labour and Social Welfare.
“The law encourages the creation of employee-controlled workers’ committees in enterprises where less than 50% of workers are unionised. Workers’ committees exist in parallel with trade unions.”
These committees’ role is to negotiate shop floor grievances, while that of the trade unions is to negotiate industry-level grievances, notably wages.
“The minister and the registrar have broad powers to take over the direction of a workers’ committee if they believe it is mismanaged,” the State Department said.
“Trade unions regarded the existence of such a parallel body as an arrangement that allows employers to undermine the role of unions.”
Employers are now moving their focus to hiring workers on a temporary basis to avoid meeting workers’ obligations.
This also includes hiring graduate trainees or interns to fill in slots for more experienced workers who typically must be compensated under a grading system.
“Employers in all sectors rely heavily on temporary or contract workers to avoid having to pay severance costs and follow other onerous termination procedures.
“The Labour Amendment Act of 2015, however, requires employment councils to limit the number of times employers can renew short-term contracts.
“The government does not waive labour laws to attract or retain investment, except in the case of SEZs,” the State Department said.
“The law provides for the right of private sector workers to form and join unions, conduct legal strikes, and bargain collectively.
“Public sector workers may not form or join trade unions but may form associations that bargain collectively and strike.
“The law prohibits anti-union discrimination, provides that the labour court handle discrimination complaints, and may direct reinstatement of workers fired due to such discrimination.”
Despite parliament enacting the Tripartite Negotiating Forum in 2019 to formalise dialogue efforts among government, labour leaders and employers, this has had limited progress since its establishment.
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