Collective Bargaining in the current volatile environment – Part 1

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)

\n\n\n

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}.

\n\n

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

\n\n

Collective\nbargaining in the current environment is further complicated by the fact that most\ngoods and services are tracking the exchange rate. Question is for how long and\nis it sustainable? Wages and Salaries are not tracking the exchange rate\nbecause it is not sustainable.  There\nmany more other challenges impacting on collecting bargaining and I list them\nbelow:

\n\n

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

\n\n\n

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

\n\n

Memory Nguwi is an Occupational\nPsychologist, Data Scientist, Speaker, & Managing Consultant- Industrial\nPsychology Consultants (Pvt) Ltd a management and human resources consulting\nfirm. https://www.linkedin.com/in/memorynguwi/ Phone +263 4\n481946-48/481950/2900276/2900966 or cell number +263 77 2356 361 or email: mnguwi@ipcconsultants.com  or visit our\nwebsite at www.ipcconsultants.com