An investigation into the challenges faced by Zimbabwean firms as a result of the limiting of fixed-term contracts of employment by Section 12(3a) of the Labour Act (Chapter 28:01)

Abstract

The use of fixed-term contracts (FTCs) of employment is a common feature of most labour markets around the world. In Zimbabwe over 66% workers are on FTCs. This is mainly attributed to the need for flexibility to revise staff figures and swiftly respond to economic hardships and technological advancements, thereby remaining competitive and profitable. The cases of Lifestyle Zimbabwe Furnishers v Admire Mawoyo and 215 Others LC/H/02/2012, Rachel Kadzinga & 20 others v Eastern Textiles (Pvt) Ltd t/a Devstar Clothing LC/MC/02/2007, Zimbabwe Bata Shoe Company v Zimbabwe Bata Workers Committee LC/MD/24/2005 have however proven that in some cases employers have no reason to subject employees to fixed-term contracts as the jobs are of a permanent nature. In response to the case of Nyamande & Donga v Zuva Petroleum (Pvt) Ltd SC43/2005, where permanent employees were dismissed by three months’ notice without being paid retrenchment packages, the Government effected Labour Act Amendments. Section 12(3a) limits fixed-term contracts. This study sought to investigate the challenges faced by firms as a result of this regulation. Literature was reviewed by theme, looking at the definition of fixed-term contracts, main theories of fixed-term contracts, Section 12(3a) of the Labour Act, and comparison with regulations in other parts of the world. The research was descriptive, utilizing the survey strategy to answer research questions. The target population were Human Resources Managers of companies in Zimbabwe, from which 40 were selected using cluster sampling from members of IPMZ based in Harare. Primary data was collected through a questionnaire. Secondary data was gathered from journals, textbooks and the press. Data was presented in diagrams and narratively. The study found out that limiting fixed-term contracts of employment results in increased training and recruitment costs, unscheduled staff turnover, poor quality output and administrative stress. It was concluded that limiting fixed-term contracts negatively affects company competitiveness, business performance, employee commitment, and does not create more employment.It was recommended that firms pay attention to fixed term contracts limits, invest in effective HR planning and training, and remunerate fairly. Legislation should identify jobs for which there should not be a limit to fixed-term contract renewals. Further studies are to look at challenges to be faced by employees, and the feasibility of rehiring stopped employees after a considerable period of time.