COVID19News

Payment of April salaries in limbo

The smooth payment of April salaries by many companies and organisations in Zimbabwe is hanging in the balance following, the coming into effect on March 30, of a 21-day COVID-19 lockdown, which suspended the majority of business operations.

What this means is that corporates, which were forced to shut down as part of the measures to control the spread of the deadly pandemic are currently not generating any income, something which will make it difficult for them to meet their monthly financial obligations including employees remuneration.

Some companies mostly in the retail and hospitality sector such as Simbisa Zimbabwe Brands have since notified their workforce that normal salaries would not be paid this month end owing to low revenue brought by the unprecedented business break.

Food sector employees on the other hand have since petitioned Public Service, Labour and Social Welfare permanent secretary, Simon Masanga, over the matter arguing that some employers, making huge profits for years, were taking advantage of the lockdown to neglect their employees by threatening not to pay salaries during the lockdown.

While Public Service, Labour and Social Welfare Minister, Paul Mavima, has called upon employers to uphold fair labour standards as enshrined in the Constitution, during the ongoing lockdown period, he has said government would not force employers to pay salaries during the lockdown.

Some employers are considering retrenching or withholding salaries for the period employees are not at work due to the national lockdown while others have since sent their workers on unpaid leaves.

However, Mavima has called for dialogue to ensure the protection of employee rights and job security as well as continued business viability.

The Confederation of Zimbabwe Industries (CZI) last Friday said 82 percent of local companies were able pay salaries for only one month under the lockdown, urging government to lift the restrictions to allow companies to resume limited operations.

“Our businesses and our government both have no capacity to sustain the costs of a total lockdown,” said CZI in a statement.

“Preliminary analysis of data collected from businesses across all sectors of the economy on the impact of the lockdown indicate that companies are not able to sustain the payment of wages and salaries for longer periods without production taking place. Eighty two percent of the respondents indicated that they can only sustain payment of wages and salaries for one month under lockdown.”

Zimbabwe Congress of Trade Unions (ZCTU) president, Peter Mutasa, however said they were of the view that that the majority of companies were able to pay the April salaries.

“Even CZI has indicated that 82 percent of its members are not able to go beyond one month which indicates that the majority if not all of their members are able to cater for April salaries during the lockdown,” Mutasa told CITE.

“The government would then focus on paying the most vulnerable especially those workers in informal sector and in few struggling SMEs that are genuinely not able to pay.  Again the government through the TNF (Tripartite Negotiating Forum) ought to have come up with stimulus packages such as moratorium on loans repayments, targeted tax breaks and refinancing schemes especially for informal sector and SMEs who cannot get loans from banks easily.”

He said ZCTU had already forwarded its position paper detailing interventions they believe should be put in place.

“Unfortunately, the government is not used to joint problem solving and is going it alone. As a result, it has failed and will put this country and economy in another bigger crisis after COVID-19.”

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