Zimbabwe’s Finance Minister Patrick Chinamasa has warned of the potential negative effects the country’s Labour Act amendment will have on labour market flexibility, reports newsday.co.zw.

He stated: “We are […] aware of the potential negative effects of labour market flexibility for both employers and workers in the short-term. The increase in flexibility can reduce worker security and lead to lower wages.”  

His remarks follow a court application from the Employers’ Confederation of Zimbabwe challenging provisions of the new act.

The government is seeking to draft legislation for the Tripartite Negotiation Forum (TNF), which will formalise the relationship between the government, employers, and workers.

“This will help circumvent challenges where businesses suffer silently on the back of an unsustainable wage bill because of labour market rigidities. I strongly feel this will help businesses realign their models in the short-to-medium term and create employment opportunities,” Mr Chinamasa added.

Through the proposed TNF legislation, the government hopes to build sustainable enterprises and create labour demand for decent employment opportunities.

Tapiwa Matangaidze, Deputy Ministry for Public Service, Labour and Social Welfare, said the proposed legislation will ensure all three parties become more accountable: “I am hopeful that we will have a piece of legislation that formalises our engagement in order for us to be more accountable and responsive to the socio-economic needs of our respective constituencies.”

Last Wednesday, the Employers’ Confederation of Zimbabwe filed an application at the High Court challenging the constitutionality of the Labour Amendment Act No 5 of 2015.

The law was amended as a stop-gap measure after over 30,000 people had lost their jobs within a month following a July 17 Supreme Court ruling, which allowed employers to terminate workers’ contracts on three months’ notice.