Wages of those in the baking sector to be now based in USD

The Zimbabwean government has approved Statutory Instrument 22 of 2023, which includes changes to the Collective Bargaining Agreement for the Food and Allied Industries (Baking Sub-sector). These changes affect minimum and actual basic wages, transport allowances, and the recognition of continuous service for employees in the baking sub-sector.

While the Statutory Instrument relates to minimum and actual basic wages have been increased for the period of 1st April 2022, to 30th of June 2022 it provides modalities for how these benefits are o be determined going forth. The wages will be indexed at the RBZ auction rate prevailing on the 21st of each month. The National Bakers Association of Zimbabwe and the Baking Workers Union agreed to these changes during their meeting on 5th of August, 2022. The new wage rates are tabulated below:

The law also seeks to reward employees who have been continuously in the employ of a given organisation. Employees who have worked for their employer for a certain number of years will receive a percentage increase based on their current basic salary. This increase recognizes the length of service of an employee and is awarded as follows:

• 5 to 9 years: 2% of actual wage
• 10 to 14 years: 3% of actual wage
• 15 to 19 years: 4% of actual wage
• 20 to 25 years: 5% of actual wage
• 25 years and above: 6% of actual wage

It is important to note that while this is well-intentioned it may fail to bring the rewards those who created envisaged. Zimbabwean employers have started to rely heavily on short-term contracts in a bid to underpay workers. Long-term workers are constantly made to sign short-term contracts. This has been happening in the banking sector too.

The law also reviews transport allowances to be paid to employees in the banking sector. Transport allowance will be paid to those employees who live outside a one-kilometre radius of their workplace. The transport allowance has been set at USD 26 for the period of May 2022 to June 2022. For the month of April 2022, the transport allowance was set at ZWL 3,000.

These changes to the Collective Bargaining Agreement for the Food and Allied Industries (Baking Sub-sector) will benefit employees in the baking sub-sector by increasing their wages and recognizing their length of service. Employers will need to ensure that they comply with the new wage rates and provide the appropriate transport allowance to eligible employees.

This new law also has a lot of ZWL figures agreed upon at the time when stakeholders met and bargained but these are now hopelessly outdated due to the ZWL constantly losing value. That’s why the USD indexing part was agreed upon to prevent having to constantly come back to the negotiating table.