Nexus between Labour Laws, Decent Work and Economic Growth in Zimbabwe
The ILO convened a panel discussion on the role of the labour market in supporting economic growth and factors that affect investment and productivity in Zimbabwe.
13 November 2015
HARARE (ILO News): On 13 November 2015, the ILO convened a panel discussion on the role of the labour market in supporting economic growth. The objectives of the dialogue were to improve stakeholders understanding of the Supreme Court judgement of June 2015 and the August 2015 Labour Amendment, as well as to share regional and international perspectives on labour law reform and decent work in the context of pursuing economic growth.
The dialogue was attended by workers’ representatives, employers’ representatives, Government officials, senior academics, ambassadors, the United Nations Country Team, informal sector representatives and the media. There were in-depth and candid conversations about why the Zimbabwean economy is not attracting investors nor growing. Participants also had the opportunity to hear from the experiences of other countries on how in the long term labour reform contributes to economic growth.
The discussion highlighted the need for broader and inclusive approaches towards addressing labour law reforms, which go beyond debates on the Supreme Court ruling and the Labour Amendment Act to include engagement and dialogue on how to attract investment and promote inclusive economic growth whilst protecting workers. This dialogue should be under the Tripartite Negotiating Forum (TNF), while the composition of the TNF could benefit from a review. The review would ensure a greater role for other stakeholders such as representatives of micro, small and medium enterprises and those working in the informal economy. It was also agreed that in addition to revision of the TNF composition, the discussions should be broadened to include issues of investment promotion and economic growth.
The meeting called on the Government to hasten the pace of reforms to improve the business environment, promotes competitiveness, efficiency and productivity, whilst guaranteeing decent working conditions. This could be achieved in part, by moving away from current consumptive models, dealing with the pricing of goods and services (public services such as water and electricity were identified as huge drivers) and taxes. Correcting these distortions could remove the current propensity to reduce labour costs and lower working conditions to improve business viability.
Government, Employers and Workers all agreed that labour law reform is a priority for growing investment leading sustainable economic growth. However, labour law reform is only one of many priorities that require equal attention, such as addressing economic fundamentals such as production, investor confidence, coherence and consistency of policies among others. The meeting noted the need to acknowledge that labour law reform is not a bigger priority than addressing economic fundamentals, such as productivity. This was underscored by a participant who said “current high levels of formal unemployment indicate that reductions in labour costs will not necessarily spur economic recovery. We are focusing our efforts on regulating only 6 per cent of the jobs as 94 per cent are informal”. This position was reinforced by a presentation by the ILO which showed that there is no link between less protection and stronger growth”.
Mr Colin Fenwick (ILO, Head of Labour Law and Reform Unit) narrated the evolution of labour law systems, the functions of the laws and the factors that influence the type of laws (economic down turn, trade deals etc.). Mr Fenwick also reminded participants of the composition and role of labour market institutions. He proceeded to present a cross-country comparison of market regulations and labour market institutions. A key highlight from this comparison is that evidence suggests that labour market institutions can contribute positively to equitable and sustainable development. Mr Fenwick concluded by challenging the stakeholders in Zimbabwe to be mindful of the diverse means and processes that could be employed to improve labour market institutions. “One of the key considerations that will influence the approach is how our choices will affect key issues such as social protection and if the desired results are long term or short term”, he added.
The dialogue concluded with a consensus that there was need for continued and inclusive dialogue among all stakeholders to ensure sustainable economic growth and development in Zimbabwe. Participants also conceded that there was need to review the key players in the labour market and the TNF dialogues, in light of the realities of the emergence of a growing informal economy.
The dialogue was attended by workers’ representatives, employers’ representatives, Government officials, senior academics, ambassadors, the United Nations Country Team, informal sector representatives and the media. There were in-depth and candid conversations about why the Zimbabwean economy is not attracting investors nor growing. Participants also had the opportunity to hear from the experiences of other countries on how in the long term labour reform contributes to economic growth.
The discussion highlighted the need for broader and inclusive approaches towards addressing labour law reforms, which go beyond debates on the Supreme Court ruling and the Labour Amendment Act to include engagement and dialogue on how to attract investment and promote inclusive economic growth whilst protecting workers. This dialogue should be under the Tripartite Negotiating Forum (TNF), while the composition of the TNF could benefit from a review. The review would ensure a greater role for other stakeholders such as representatives of micro, small and medium enterprises and those working in the informal economy. It was also agreed that in addition to revision of the TNF composition, the discussions should be broadened to include issues of investment promotion and economic growth.
The meeting called on the Government to hasten the pace of reforms to improve the business environment, promotes competitiveness, efficiency and productivity, whilst guaranteeing decent working conditions. This could be achieved in part, by moving away from current consumptive models, dealing with the pricing of goods and services (public services such as water and electricity were identified as huge drivers) and taxes. Correcting these distortions could remove the current propensity to reduce labour costs and lower working conditions to improve business viability.
Government, Employers and Workers all agreed that labour law reform is a priority for growing investment leading sustainable economic growth. However, labour law reform is only one of many priorities that require equal attention, such as addressing economic fundamentals such as production, investor confidence, coherence and consistency of policies among others. The meeting noted the need to acknowledge that labour law reform is not a bigger priority than addressing economic fundamentals, such as productivity. This was underscored by a participant who said “current high levels of formal unemployment indicate that reductions in labour costs will not necessarily spur economic recovery. We are focusing our efforts on regulating only 6 per cent of the jobs as 94 per cent are informal”. This position was reinforced by a presentation by the ILO which showed that there is no link between less protection and stronger growth”.
Mr Colin Fenwick (ILO, Head of Labour Law and Reform Unit) narrated the evolution of labour law systems, the functions of the laws and the factors that influence the type of laws (economic down turn, trade deals etc.). Mr Fenwick also reminded participants of the composition and role of labour market institutions. He proceeded to present a cross-country comparison of market regulations and labour market institutions. A key highlight from this comparison is that evidence suggests that labour market institutions can contribute positively to equitable and sustainable development. Mr Fenwick concluded by challenging the stakeholders in Zimbabwe to be mindful of the diverse means and processes that could be employed to improve labour market institutions. “One of the key considerations that will influence the approach is how our choices will affect key issues such as social protection and if the desired results are long term or short term”, he added.
The dialogue concluded with a consensus that there was need for continued and inclusive dialogue among all stakeholders to ensure sustainable economic growth and development in Zimbabwe. Participants also conceded that there was need to review the key players in the labour market and the TNF dialogues, in light of the realities of the emergence of a growing informal economy.