SI on employment code to save jobs

GOVERNMENT’S response to the novel coronavirus (COVID-19) is taking many forms as it seeks to redeem the economy.
The latest in the series is the signing of a statutory instrument by Minister of Labour and Social Security Joyce Simukoko which is designed to exempt companies that are financially constrained from certain clauses of the Employment Code Act such as paying gratuity and leave days.
The signing of the SI, which has since been gazetted, is a very wise move to exempt companies in distress due to COVID-19 because their income levels dropped during the closure of their businesses.
Almost all businesses are going through a tough period now as the economy begins to feel the negative impact of the pandemic.
Some companies have scaled down their operations while others closed when President Edgar Lungu announced measures in response to COVID-19.
Government has asked citizens to stay home and only go out for essential services like groceries and undertake essential travel within or outside town when necessary.
Government has also banned social gatherings of up to 50 people, including in churches, and closed bars and nightclubs as a means of mitigating the transmission of COVID-19.
Despite the drop in business, employers are, however, expected to honour their obligations by maintaining workers on the payroll.
This meant that employers were until the signing of the SI by the Minister of Labour obliged to pay leave dues and gratuities.
The SI will benefit the employers who will be shielded from the financial implications of paying employees when they are not making any money.
The economic climate demands policy that is consistent with the prevailing conditions. This may entail repealing the labour laws so that it engenders employment rather than make labour prohibitive.
While the SI is in place, it does not make employers go to sleep at one time or another. They will still be required to fulfil their obligation of paying leave dues and gratuities.
Therefore, prudent employers will not sit on their laurels and wait for COVID-19 to disappear.
Rather, they should be looking outside the box to strike a balance with employees who deserve the leave dues and gratuities.
This is because employees deserve these payments, which should in turn make them economically viable.
Besides, with schools due to open on June 1 for pupils in examination classes, employees need every coin to help their children and dependants go back to class. They have almost nowhere to turn to.
Besides, these are employees’ entitlements. Employers should not hide behind the SI but should be able to dialogue with employees for a win-win solution.
If they cannot agree, they should settle for involuntary separations with full payout, as the law currently says. That is if the situation becomes dire.
For employers, they may have a solution to their financial quagmire.
For instance, Government has come up with a number of measures designed to stimulate economic activities which some employers can take advantage of.
For instance, Government has set aside K10 billion to cushion businesses against the worst effects of COVID-19.
This should help businesses through these unprecedented times.
Companies with business action plans are eligible to access the stimulus package, which is a loan that has to be paid back once their business improves. Government, through the Bank of Zambia, has come up with flexible payment terms.
This is one fund that could potentially address companies’ ability to meet such obligations as gratuity and leave days. It is worth considering.
So, while the SI seeks to shield employers from paying their leave and gratuity obligations, employers should be on the lookout for opportunities that could cushion their businesses.