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Collective Bargaining in the current volatile environment – Part 1

Editorial Team
14/10/2019 6:36 PM

Collective bargaining is a process of determining the terms and conditions of employment in your workplace by agreement with your employees.

International Organisation of Employers (IOE)

In Zimbabwe, it takes place at the firm level or at sector level {National Employment Council-NEC}. The Constitution of Zimbabwe under Section 65 gives employees the right to collective bargaining. This is supported by s24, s25A, s74 of the Labour Act. The above implies that an employer cannot refuse to bargain and must make an effort to bargain in good faith {s75}.

Section 65 of
the Constitution provides other rights such as safe labour standards and the right
to a fair wage. The question is do employees have a right to demand a “living
wage”? SI 33 of 2019 gave false value to the local currency versus USD. The
consequence was that the local currency lost value. Further monetary policy
changes through SI 42 of 2019, banned forex trading as legal tender for all
local transactions. The consequences were that people lost confidence in local
currency. It continues to lose value. Is it then a good store of value? The
fact that the general populace is questioning its ability to store value brings
with it a number of challenges for workplace collective bargaining. This is why
workers have been clamoring for employers to peg their salaries against the
USD. A request very few employers can afford.

bargaining in the current environment is further complicated by the fact that most
goods and services are tracking the exchange rate. Question is for how long and
is it sustainable? Wages and Salaries are not tracking the exchange rate
because it is not sustainable.  There
many more other challenges impacting on collecting bargaining and I list them

  • At NEC level most employers send junior staff for
    collective bargaining. The process  is
    cumbersome because most of these people do not have the power to make decisions
  • The general trend of wage increase
    is random and not related to productivity improvements
  • Where wage increases are
    given they do not take into consideration individual performance
  • Despite the new amendment
    to the Labour Act empasising the need to take into consideration productivity
    when bargaining, this is not happening 
  • Governance challenges: Although the new Labour
    amendment{audited accounts} tried to breath fresh air on governance at the NEC
    level a lot still needs to be done
  • The governance structures in most organisations make
    it difficult to make decisions related to collective bargaining. Most Boards
    want to approve the staff budget and in most cases, bargaining changes are not
    factored in advance
  • Bargaining at the industry level is constrained
    because employers in the same industry are competitors. They rarely share
    important performance information required for collective bargaining
  • There is scarcity key performance data for most
    sectors to enable effective collective bargaining at the sector level. The
    default position for most NECs is to use national data e.g. inflation, the food
    basket and now forex rate  {all outside
    the control of the employer}
  • While statutes give scope for firm-level collective
    bargaining; decisions and firm-level are non-statutory
  • The Labour side seems more prepared when it comes
    to collective bargaining than the employer side { they understand labour
    statutes better}
  • Most of the unions are militant and prefer an
    adversarial approach to collective bargaining likely scaring away some of
    the  executives from this process 
  • Most people on the employer side benefit from most
    of the collective bargaining agreements by default e.g. when non-managerial
    employees make noise, adjustments are done which in most cases also extends to
    managerial employees. We have heard cases where very senior managerial
    employees pass on information to non – managerial employees to strengthen their
    bargaining position because in the end they benefit
  • Most Board members have scant knowledge of labour
    statutes. Only 13% of Boards in Zimbabwe have an HR Expert on the Board. Less
    than 5% of HR Board Committees are chaired by an HR Person. Over 90% of HR
    Board Committees have no single member with HR background
  • Restive
  • Everyone depending on
    fixed income supply such as wages and salaries 
    is struggling to survive  as the
    wages and salaries have been eroded by inflation and currency depreciation
  • It is a process - Employers
    should understand this process, understand the opportunities it presents and
    use it strategically. It is a regulated
    process, and it is important to know what the law does and does not allow
  • Collective Bargaining agreements
    result in legal obligations to the employer.   Look at the
    implications and factor them in your business. More importantly once agreed
  • It is too inflexible and
    slow to change in the face of rapidly changing markets and commercial

Over and above, the challenges outlined above the National Employment setup
fails to recognise and accommodate the diversity of businesses, even within one
sector. This includes issues such as the capacity to pay. In the next installment,
we look at the strategies employers can use when collective bargaining.

Memory Nguwi is an Occupational
Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial
Psychology Consultants (Pvt) Ltd a management and human resources consulting
firm. https://www.linkedin.com/in/memorynguwi/ Phone +263 4
481946-48/481950/2900276/2900966 or cell number +263 77 2356 361 or email: mnguwi@ipcconsultants.com  or visit our
website at www.ipcconsultants.com

Editorial Team

This article was written by one of the consultants at IPC

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