Clashes took place between police and unemployed people protesting a wave of layoffs in Zimbabwe on Saturday. Over the past two weeks or so, at least 18,000 people have been fired — more than during all of last year. The actual number of layoffs is likely even higher, as some workers have not reported their termination to labor unions. All of this stems directly from a July 17 ruling by the country’s Supreme Court allowing employers “to terminate an employment contract by giving three months notice,” without having to give a reason or compensation.
Confederation of Zimbabwe Industries President Busisa Moyo said the termination of contracts would give companies room for expansion. He noted that a company like state-owned National Railways of Zimbabwe owed employees huge amounts of money through salary backlogs and needed to restructure.
However, Zimbabwe Congress of Trade Unions president George Nkiwane argued that “Terminations will not help in re-capacitating the companies. As a country we must focus on issues that matter. One is the liquidity crunch. No one can borrow internally or offshore and the interest rates are very high and therefore not viable for the repayments of debt.” Nkiwane added that country risk is the real problem: “There is no one who wants to invest in a country that has policy inconsistencies and where policy pronouncements are made at rallies.”
Facing a popular backlash, strongman President Robert Mugabe criticized the Supreme Court’s decision, but even he can’t reverse it by decree. “We have said that is not fair, it is not just and it is not acceptable… They cannot have just suddenly become failures, the whole lot. There should be some moral grounds to discharge workers,” he said. Mugabe added that his government is working on an amendment of the country’s labor law to try to stop the layoffs.
But others in his government disagree, either with words or actions. Industry and Commerce Minister Mike Bimha and Finance Minister Patrick Chinamasa have publicly endorsed the layoffs. Bimha said shedding excess staff would help companies return to financial health, and Chinamasa stressed that the job cuts would help start a conversation about Zimbabwe’s labor market, which he strongly feels is rendered uncompetitive by laws that favor workers and punish investors. Last but not least, Vice-President Phelekezela Mphoko’s supermarket chain fired almost 100 workers in late July.
There is little doubt that more people will join the already sky-high ranks of Zimbabwe’s unemployed, although without meaningful policy changes businesses will still be hamstrung. But given his political longevity, Mugabe will still be in power — no matter what.