Unions in uproar over wage freeze

The acrimony started when Finance Minister Ng'andu Magande, presenting the 2004 budget in Parliament, announced that government had imposed a wage freeze on civil servants' salaries.
Government has 'cut a pound of flesh' out of the small and a struggling civil service, through the high tax of 40 per cent for an income of more than ZMK5,000,000 (approximately US$ 1,030).

Government argues that the imposition of a wage freeze is for the country to reach the Highly Indebted Poor Country (HIPC) initiative by December, 2004 and to attain the new Poverty Reduction and Growth Facility (PRGF). Zambia would then receive the promised US$ 3.8
billion debt relief from the World Bank.

But the labour movement has since protested over the increase and reforms on Pay As You Earn (PAYE). The most heated issues has been the PAYE tax change, introducing 40 per cent in addition to the existing 30 per cent rate.

The immediate question posed by the disagreement is the need to develop an effective wage policy for government. This includes the relationship between the budgetary process and the wage freeze.

Government is still reviewing the law related to minimum wages and conditions of employment
legislation, as the present one is vulnerable to abuse and requires redrafting. ZCTU and the Zambia Union of Financial and Allied Workers (ZUFIAW) has declared they would not support
the ruling Movement for Multi-Party Democracy (MMD) in the forth-coming 2006 elections, but that they would identify another opposition party to rally behind.

This has offended government, calling the Unions as 'rebels' and warning civil servants not to be
partisan. Chief Government Spokesperson Mutale Nalumango warned that if civil servants became political, the law would soon visit them.

"When you choose to not to support government, you are rebelling and when one works against government, that's an offence, there are no other words for that", said Nalumango. This comes at a time when civil society and the church are calling for the reduction of the bloated Cabinet. Stakeholders are also protesting and rejecting the payments of the mid-term parliamentary gratuity of ZMK31.2 billion (US$ 6.4 million) for the 150 Members of Parliament (MPs), that make up the country's National Assembly.

Joyce Nonde, President of the Federation of Free Trade Unions of Zambia (FFTUZ), says it is doesn't make sense to ask workers to forego a wage increment in the national interest and then pay millions of dollars as mid-term gratuity to Parliamentarians and government Ministers.
"Let Finance Minister (Magande) enjoy his office and we enjoy our poverty", Nonde said.

The Jesuit Centre for Theological Reflection (JCTR) observes that 80 per cent of Zambians live under impoverished conditions, and cannot afford the normal three meals per day. The Zambia Federation of Employers (ZFE) have called for settlement of the impasse between government and the labour unions, through social dialogue.

ZFE Acting President Stuart Lamb says the federation was concerned about the industrial discontent, unresolved issues concerning workers' housing allowances, PAYE and the wage freeze. "The federation's position is that all social partners have a common agenda, that of developing the nation and providing jobs and decent living for all Zambians", said Lamb.
He notes that due to the liberalization of the economy in the 1990s, a large and untaxed informal sector exists in Zambia and deprives government of the much needed revenue. "They enjoy an unfair competitive advantage over the formal business sector and does not share the burden
of increased PAYE with the majority of employees", he said.

Lamb says there is need for government and the workers' unions to meet and discuss the impasse, given the sensitivity and political leadership required to solve such an issue, in the interest of industrial harmony.

Some analysts say the wage freeze disagreement between government and the unions, cannot and must not end unresolved or left to chance. However, the issue of wage freeze is not a new tool for successive governments in Zambia.

In November,1997, the MMD government of former President Dr. Fredrick Chiluba imposed a wage freeze on the workers, which was to last until the end of 1998. Then, like now, the workers opposed it, but could not succeed in winning the battle.

Chiluba, who is now being pursued by the National Task-Force investigating the corruption and 'plunder' of national resources, has since admitted that wage freeze can cause pain to workers.
The former President said initially, HIPC was not meant to cause pain on the citizenry. "If government is saying workers should have a wage freeze, then it becomes contrary to HIPC objectives. Some people will tell you to impose a wage freeze, but it's up to government to consider the right decision”, he said.

"The International Monetary Fund will cause you to impose a wage freeze in the morning and in the afternoon, they will ask you why you imposed a wage freeze", Chiluba added. "We have heard people saying we must do this and that in order to reach the HIPC completion point. I realise that people need information about this topic. HIPC is not an animal, a new car, an aeroplane or a pot to cook in. It is an initiative that was started by my government", Chiluba said at a recent National Bishops' Conference.

Chiluba said problems of workers' poor conditions of service started in 1991, when he assumed office. At the time, the country had a debt of over US$ 7 billion and was required to service it every month. Before this, workers were being told by the government of the first Republican President Dr. Kenneth Kaunda, to sacrifice by 'tightening their belts'.

Despite heeding all calls by leaders for sacrifice over the past years, workers conditions have not
changed; poverty and unemployment has risen to alarming levels.