Finance Minister Tendai Biti officially invalidated Workers Pensions by invalidating the Zimbabwe Dollar The announcement by Finance Minister Tendai Biti that the country has officially abandoned trading in its currency in preference of multiple foreign currencies is a major blow for workers in the country.
While there is no surprise element in the announcement given that the Zimbabwe dollar had long ceased to be recognised as legal tender in day to day transactions in the country, the official confirmation of its invalidity raises fundamental concerns about protected worker investments in the country.
By scrapping the local currency temporarily or otherwise the coalition government ahs at the stroke of a pen declared all cash investors in the local mint bankrupt and valueless?
This is a frightening development that should not be allowed to go unchallenged by the investors who must of necessity demand restitution from the State and Financial institutions holding their cash deposits.
It all started when Reserve bank Governor Gideon Gono embarked on a monetary policy that allowed the State to print valueless paper money which the State used to purchase foreign currencies which the country used to pay its foreign debts and recurrent expenditure obligations with.
Put mildly the Reserve Bank was transformed from a fiscal regulatory authority to an institutional State thieving apparatus.
Now that the State has bankrupted its millionaires that successive Zanu PF regimes boasted they had created is there no means with which Zimbabweans can hold the state for this daylight robbery.
By far the most prejudiced grouping is the working class.
The Zimbabwe worker has been compelled to make compulsory cash investments in an array of Pension Funds and Insurance companies Retirement Annuity Funds which were guaranteed in terms of the provisions of the Pensions and Provident Funds Act which has not been repealed and thus can be enforced at law.
All private sector workers and employers were in terms of the National Social Security Act (NSSA) forced to contribute to the no less than 6 percent of the employees’ gross basic incomes to the National Pension Fund arrangement.
The country does not have an unemployment benefit policy. Contributions to the NSSA were thus invested in fixed assets and interest bearing guilts while a substantial amount was chewed by administrative expenses.
The contributions were over many years when the Zimbabwe dollar had real value attached to it. It is only contributions in the last 3 or so years that can be said to have been valueless as they were based on incomes determined on the basis of a valueless currency.
Now that the local currency has been invalidated employees have lost the value they had saved over the years when the currency had real value.
In tandem with those losses there are many other employees whose conditions of service made it mandatory for them to be members of the employer arranged group pension funds where contributions up to 10% of the employees’ basic gross income were not uncommon to which the employer topped an equal amount after 10 years service in many instances.
Statutory Instrument No 323 of the pensions and Provident Funds Act prohibited employees from accessing the employers’ portion of contributions on withdrawal from the Group Pension Funds if they were under the normal retirement age and or at the very list before reaching specified early retirement ages of 50 years in respect of female workers and 55 years for males.
The inaccessible portion was compulsorily converted into a protected interest bearing annuity to be used to purchase a retirement pension or the employee on attainment of normal and or optionally early retirement age.
In many instances employees who resigned their jobs before reaching normal retirement ages stipulated in respective pension funds opted to have both their personal contributions and the employer portion converted into a Single Premium Protected interest bearing annuity to be availed to them on attainment of their normal retirement age.
The figures are not insubstantial as is evidenced by the minimum industrial wages that were announced for various industrial sectors in the country.
In many instances the employees actively bought Insurance Companies retirement annuities that were equally protected and guaranteed by the State in terms of the Insurance Act of 1987 as read with the Pensions and Provident Fund Act and Statutory Instrument no 323.
Now that the currency they invested has been invalidated the Minister was silent as to what is to become of these protected compulsory investments by employees.
Surely employees have a compelling case to take the State to task over these potential losses of investments they could have channelled into productive enterprise or real estate which is not affected by the decision to invalidate the currency of the country.
On the other hand there is a large group of workers who were victimised through illegal dismissal’ retrenchments without severance packages and or discontinuance of the enterprises they worked for without agreement on severance packages and or where agreement was reached the amounts were never paid.
Many cases of this nature are currently pending at the various established Labour dispute resolution legal and quasi-legal institutions.
Now that the claims awaiting arbitration determinations are in a local currency denomination that has been invalidated it would be a travesty of justice if the cases have to be abandoned because the quantum of restitution cannot be ascertained in a currency no longer having economic value.
It is imperative that the Minister of Finance gives directions in this regard. Workers should not be penalised in terms of their investments because of State incompetence.
The value of the Zimbabwe dollar may have diminished to nothing over the years but the diminished value cannot be expected to be passed to employees who had no means of mitigating it by converting their savings to other safer investment alternatives open to them as their funds were under exclusive control and management of the underwriters of the Pension Funds and or the defaulting employers who terminated contracts of employment unprocedurally without paying attendant terminal benefits within prescribed periods.
A fundamental legal principle in restitution damages is that the party in default must restore the prejudice to a level and extent that would leave the aggrieved at the same status he would otherwise have been at but for the deviancy in laid down procedures.
The Labour Relations Act 28:01 stipulates that terminal benefits must be paid within reasonable times as follows:
“13 Wages and benefits upon termination of employment
(1) Subject to this Act or any regulations made in terms of this Act, whether any person—
(a) is dismissed from his employment or his employment is otherwise terminated; or
(b) resigns from his employment; or
(c) is incapacitated from performing his work; or
(d) dies;
he or his estate, as the case may be, shall be entitled to the wages and benefits due to him up to the time of such dismissal, termination, resignation, incapacitation or death, as the case may be, including benefits with respect to any outstanding vacation and notice period, medical aid, social security and any pension, and the employer concerned shall pay such entitlements to such person or his estate, as the case may be, as soon as reasonably practicable after such event, and failure to do so shall constitute an unfair labour practice.”It cannot be seriously contested that most employers who have failed and or refused to pay retrenchment packages, terminal benefits for employees who resigned and or retired and or judicial and quasi judicial damages in cases they were found on the wrong side of the law up to the date the Zimbabwe currency was invalidated were abusing the strained legal system to buy time for eventualities like the one now obtaining.
But it is also possible for such companies to be held liable for their actions in the multiple currencies denominated value they are now trading in as they have not invalidated the fixed assets they possessed but have re-valued them in another currency denomination.
Those are the directives the Minister of Finance must give to the Courts to apply in cases of prejudiced workers.
That is the only way the coalition government can demonstrate that it is not embarking on a collision with the thousands of workers who in one way or another stand to suffer irreparable damage from the official invalidation of the Zimbabwe dollar
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