Flaws of Contract Law in Zimbabwe

Labour law according to Gwisai (2006) refers to the system of rules that regulate the voluntary relationships arising from the workplace and whose enforcement is guaranteed by the state as law. According to the labour act Chap 28. 01, labour law is referred to as the law relating to employment relationship. Termination of employment is when an employee’s contract of employment with an employer ends.

This can either be due to redundancy, resignation or dismissal or is incapacitated from performing his work, Labour Act Chap 28. 1. The essence of this essay is to discuss minister Biti’s statement which describes Zimbabwean labour laws as “too rigid, suffocating to business and inimical to economic recovery and development, especially in relation to laws governing termination of employment”. The first and major issue in termination of employment is the issue of retrenchment. The retrenchment procedure as stated in the Labour act is too cumbersome and time wasting, and chances of approval are minimal if company is still viable.

Retrenchment is viewed as last resort and the final decision lies with the retrenchment board and the minister. The whole process to approval or rejection may take months or even years. This creates a rigid labour market which is unable to shed or reconfigure labour requirements in response to changing products and demand conditions. This in all hinders business development and economic growth. The retrenchment procedure itself can be costly to an organisation. A lot of money is used as wages during the process and the benefits and retrenchment packages.

This financial drain of resources discourages the whole idea of retrenchment. The resources can be used for business development but are used as severance pay. Minister Biti went further to say “companies will not readily hire new labour if they face difficulties offloading excess labour. New labour hiring can only be increased if comprehensive labour market reforms are instituted to give latitude for flexible hiring of labour”. In Zimbabwe disputes on termination of employment can be referred to arbitration.

According to Hagglund and Provis (2005), labour arbitration can be conceptualised as the resolution of disputes outside the litigation court system when neutral and unconnected third parties come in to resolve disputes by making determinations which bind the parties. Recourse to appeal or review of an arbitration award is very restricted in the Zimbabwean statutes. This making it difficult to appeal against harsh or judgements detrimental to business viability like a very large retrenchment package.

This in turn affects business development and growth which affect economic recovery and development. According to Trudeau (2002), the system of dispute resolution should not be cumbersome. It should allow for expeditious resolution of disputes by not lengthening the dispute resolution process. Labour analysts call for the removal of the arbitrator in dispute resolution as the laws do not state the timeframe in which disputes can be resolved by arbitration as it does in other appeal processes.

Consequently there are many arbitration cases pending in Zimbabwe. This is suffocating to business in that if the employer is to lose the case he will have to pay the employee full pay for all the time spent in arbitration with no production. For economic and business recovery and development labour legislation must be flexible and consistent with business realities. Laws must strike a balance between protecting the worker and ensuring business viability, and guaranteeing that retrenchment packages are awarded in tandem with enterprises capacity to pay.