The impact of privatization on contracts of employment
Date
2013-10-22
Authors
Shoko, Juliana
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Abstract
Zambia, a country in South-Central Africa has undergone massive policy changes both in the political and economic spheres. In the political arena, the country, prior to independence, then known as Northern Rhodesia, developed from a British protectorate under the British South African Company from 1884, to being colonised by the British government from 1924 to 1964. After independence, multi-party politics was the order of the day in which time, the United National Independence Party (UNIP) was the ruling party. Thereafter, the then Republican President, Dr. Kenneth Kaunda, whose political party was UNIP, created a one-party political system. This party ruled for twenty-seven (27) years until the re-introduction of multi-party politics under the Movement for Multi-party Democracy (MMD) government, in 1991. This was as a result of the collapse of Communism in Eastern Europe and the United Soviet Republic (USSR), and also an outcry by the Zambian people to change the one-party system as it was proving to be futile. In relation to the economic sector, the country discarded the socialist oriented policies propounded by the former government, which was geared towards a centrally planned economy. The MMD government has embarked on policies in favour of a liberalised economy, where free market policies are strongly emphasised.
It is imperative for us to initiate our research from the time Zambia was under colonial rule and assess how the country has developed its economic policies to reflect the prevailing situation.During the time Zambia was under colonial rule that is from 1924 to 1964 the mining industry was the single largest employer among all the Zambian industries and the country's chief earner of foreign exchange. It must be noted that employment contracts date back to time immemorial and analysing its evolution and current status to employers and employees will play a vital role in critically analysing the framework of present society, vis-a-vis, and the privatisation process.At independence, Zambia was among the African countries with a strong economic base1. However, the UNIP government embarked on socialist oriented policies, providing free education, free medical care, among other facilities, thereafter diverting the income from mines into providing social welfare instead of focusing on the most needed development of manufacturing industries, agriculture and other related infrastructure for sustainable development.Total dependence on mining brought about serious problems as the prices of copper slumped due to worldwide depression brought about by the sudden increase in the price
of crude petroleum products and the collapse of commodity prices like, copper, on the world market. The saddening thing is that the then government continued on socialist principles. The result was devastating, economic stagnation, run-down infrastructure and a general failure to maintain the industrial sector because of lack of these industries to absorb the ever increasing population in gainful employment. In short, the mining industry failed to spark the growth of the many secondary industries, which could have provided employment opportunities.The situation continued to deteriorate until 1991 when the Movement for Multi-Party Democracy (MMD) government took over the reigns of power and introduced drastic economic policy changes. When the MMD government took over control of the government through the 1991 Presidential and Parliamentary Elections, the MMD government stated that it was going to seek to undertake " an unbreakable integrated package" of economic reforms. Their motive dwelled on creating a 'free market economy' where private businessmen were able to engage in trade in Zambia. In so doing, they decided to Privatise State Owned Enterprises in order for the burden placed on government to be alleviated and thus the companies could be run more sufficiently to meet the present day technological advancement.These policies have been implemented and the process of privatisation has been ongoing. An Act was introduced which was to be used as a yardstick for the process in Zambia.
Various modes were adopted to carry out the program. However, among the major areas that were affected was the employment sector. Many changes have been made to the work force in the privatised companies. Workers have had their contracts of services altered to suit the new employer's conditions or they have simply been declared redundant due to the fact that they do not have any work for them. Furthermore, these workers have been retrenched claiming that the workforce is too large to sustain, or simply that they do not have any jobs for them. Government's intention was that, as soon as these companies are privatised, many jobs would be created for Zambians and better working conditions shall be advanced. This would be as a result of decentralizing these large parastatals, and making them more specialised in their work. In that way, more qualified people would be employed to work in various positions. Furthermore, more money would be pumped into various organisations for their smooth running by their private owners, which in the long ran, would provide good conditions of service for the employees.These ambitions of government have today, proved to be futile. We see many Zambians stranded and unable to sustain a more positive way of living because of lack of job opportunities to see them survive. Where does the problem lie? Is there a misunderstanding of the concept of privatisation and its application to the labour sector? Who is to blame for the mishap of arriving at an understanding of the workers conditions of service? Is there a loophole in the Law relating to the two areas and their
interrelations? These are among various issues that we intend to discuss in this research paper.This essay shall endeavour to show how the courts of law in Zambia have responded or interpreted contracts of employment under the privatisation process at different levels in the development of this branch of law.Chapter one discusses the period of nationalisation in Zambia from pre-eolonial times, until the re-introduction of a free market economy in 1991, by the Movement for Multi¬party Democracy (MMD).Chapter Two discusses Privatisation. It is in this chapter that the Zambia Privatisation Act, under the Zambia Privatisation Agency, has carried out various modes of privatisation.Chapter Three endeavours to show how privatisation has affected the rights of employees as well as the legal obligations. It also provides an in-depth illustration and analysis of a number of cases that have arisen out of a misunderstanding of these terms and conditions of the employment contract.Chapter Four tries to summarise the study and then proceeds to recommend possibilities of clarifying the whole aspect. From there, a conclusion shall follow.
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Keywords
Privatization --Law and legislation--Zambia , Labour laws-Zambia