US highlights Zimbabwe’s rigid labour laws amid rising retrenchments

The United States government said Zimbabwe’s employment regulations prevent companies from reducing their workforce when the economy weakens. A recent investment assessment from Washington highlighted restrictions that prevent businesses from terminating contracts or reducing staff numbers in response to financial pressures.

Labor Minister Edgar Moyo announced in September that authorities would investigate companies conducting layoffs improperly. Many firms have dismissed workers to reduce expenses, then rehired the same roles under short-term agreements months later, a strategy unions claim avoids paying senior employees full compensation and benefits.

The State Department report explained that employers outside special economic zones must negotiate with workers and their representatives before considering staff reductions. Companies that proceed with cuts must provide one month’s salary for each year of service. The legal framework treats layoffs as retrenchments that require formal procedures.

Businesses increasingly hire temporary staff or graduate trainees to sidestep obligations tied to permanent positions. The 2015 labor law limits how many times employers can extend temporary contracts, though companies continue relying on short-term arrangements to avoid severance costs and termination requirements.