CHAPTER TWO

• The Trade Union Situation in Zambia: A Bird’s Eye View
• TABLE I: National Employment Trends
• TABLE II: Formal Sector Employment (000)
• Table III: Public companies affected by liquidation or receivership as at 31 December 1995

CHAPTER TWO

The Trade Union Situation in Zambia: A Bird’s Eye View

From its inception the labour movement in Zambia has not been spared from political interference, abuse or control. During the struggle for independence the labour movement constituted an active ally of other nationalist movement. When independence was achieved in 1964 the government in power wanted to extend the symbiotic alliance to actual control. When this could not be achieved the state used its powers under the law to deal with dissension from the labour movement. In some instances the state achieved control through incorporating labour leaders in the mainstream structure of the ruling political party. For example the top brass labour leaders were arrested and detained under presidential power in 1982. On the other hand some prominent members of the labour movement were appointed as members of the ruling party’s central committee.

The labour movement also witnessed its incorporation on the ruling party’s national council based on the principle that the party was supreme.

These and many other overt and covert overtures and acts on the part of the state towards the trade union movement demonstrated government perception of the labour movement as a pillar of formidable influence. It also shows that the state machinery could take appropriate steps in order to control and weaken the labour movement.

One of the factors that has made the Zambia Labour Movement to be one of the strongest in Africa was the retention of the principle of one union in one industry up to 1990. Indeed the period between 1971 to 1991 was the era of capacity building with legal support of the trade unions. By 1990 the ZCTU had organisational structures similar to those of the United National Independence Party (UNIP) across the country. The overwhelming success of the movement towards democracy in 1990-1991 was largely due to the organised structures of the ZCTU which the MMD took advantage of and used.

When the MMD took over the reins of power from UNIOP in 1991 they promised as overhaul of the legal structure of the labour movement in order to strengthen it. Essentially this was interpreted to mean the redrafting of the 1990 Industrial Relations Act particularly as it affected the organisational structure based on the multiplicity of unions. It will be recalled in fact that before its ascendancy to the helm of political power the MMD, itself dominated by former labour leaders such as Frederick Chiluba, strongly condemned the 1990 Act as being anti-union and divisive. Yet, as the same time, the MMD leadership promised to usher in liberal policies.

Hence one the priorityareas when the MMD assumed power was to embark on the World Bank and International Monetary Fund (IMF) supported Economic Structural Adjustment Programme(ESAP). This has had far-reaching implications on the labour market trends, employment and trade union density mainly due to the privatisation of publicly owned companies which could not stand the competitive nature of ESAP.

Privatisation, which is invariably an inevitable incident of ESAP, has had to be implemented in the framework of the unrealistic legal regime with regard to support systems or mechanisms for those out of employment. Another dimension to this has been the lack of cohesion and vision by the labour movement which had remained divided. The last factor has been government’s wish, through a number of instruments, to extend liberalisation to the organisational structure of the labour movement.

The question to be addressed relation to those factors is: What, in real terms, has liberalisation meant to the effectiveness and organisational structure of the labour movement?

Zambia’s labour force, a scenario which is common in the Southern Africa sub-region, has a tendency to record a disproportionately high growth of the informal sector against a declining formal sector employment. According to the 1991 Central Statistical Office (CSO) Priority Survey on the Social Dimensions of Adjustment published in 1993 the labour force was estimated at 3.2 million with an average annual growth rate of 2.1 percent and dominated by about 54 percent of persons aged between 12 and 34 years of age. The study showed that about 64 per cent of the labour force was located in the rural areas with a high proportion of female employees. The bulk of the labour force was unskilled with high levels of illiteracy particularly among the women and the youth. The priority survey estimated the unemployment rate at 22 per cent and the rate being higher for females.

The reliability of these statistics have been questioned and doubted particularly that the survey considered subsistence farmers and unpaid family workers as being ‘employed’ [ Fn 1: See also Banda D.A. and Muneku A.C. "The Impact of Structural Adjustment Programme on the Labour Market and Unionisation in Zambia’s study conducted on behalf of the Friedrich Ebert Stiftung (FES) Zambia and the ZCTU in 1996 which paper was subsequently presented to a ZCTU workshop.]
If this is discounted it is estimated that the unemployment rate ranges between 70 to 80 per cent.

It will be noted from Table I for instance that against the labour force of 3.5 million only 526.4 thousands were in informal sector employment with the public sector and agriculture having the largest share as can be observed from Table II. It will also be observed from both tables that there has been a progressive increase in unemployment resulting in a general decline of the formal sector employment. Formal sector employment has been declining at an annual average of 2 per cent. The most affected sectors in terms of the decline in employment levels are manufacturing, construction and mining. The public sector, on the other hand h as registered an increase between the years 1993 to 1994. This picture is likely to change negatively because of the restructuring of the public service [ Fn 2: See the 1997 Budget Speech, Government Printers, Lusaka 1977.] .

Table I below shows national employment trends while Table II shows trends in formal sector employment by Sector.

TABLE I: National Employment Trends

	1986	1987	1988	1989	1990	1991	1992	1993	1994
P/M	6.6	6.8	7.0	7.2	7.4	7.6	7.8	8.4
PGR	2.7				3.5
LFM	2.4				3.2		3.5
ELFM	2.4				2.5
UR	13					22
FE	526	530	533	540	543	544	546	526	405

SOURCE:
EMPLOYMENT TRENDS 1994 AND ZAMBIA IN FIGURES 1996.CSO

Key:
P.M....................Population (Millions)
P.G.R ................Population Growth Rate %
L.F.M .................Labour Force (Millions)
E.L.F.M...............Employed Labour Force (Millions)
U.R ....................Unemployment Rate %
F.E......................Formal Employment (‘000)

TABLE II: Formal Sector Employment (000)

	1990	1991	1992	1993	1994
Agriculture,Forestry, and Fishing	79.8	77.7	82.0	82.8	78.3
Mining and Quarry	64.7	64.8	62.1	58.2	51.2
Manufacturing	72.1	75.4	73.6	67.6	57.1
Electricity and Water	7.1	7.6	8.4	5.7	5.1
Construction 33.4	33.1	27.8	22.1	17.5
Distribution, Restraunts & Hotels	55.1	55.2	51.3	49.3	49.6
Transport & Communication	33.8	34.4	31.0	29.0	29.0
Finance, Insurance & Real Estate	32.9	35.8	39.0	37.0	33.8
Public Sector 159.4	162.2	170.7	166.3	173.9
Redundancies	3	4	6	5	9
TOTAL	543.3	544.2	546.2	526.4	405.5

SOURCE: ZAMBIA IN FIGURES, CSO, 1996

The declining employment trends have been attributed to the privatisation programme which has been associated with job losses. This also has a direct effect on the levels of unionisation. For example, according to the Research Department of the ZCTU, ten public corporations liquidated between 1992 and 1994 deprived the labour movement of a substantial membership as a result of which more than five thousand jobs were lost. Table III shows the public Companies affected by liquidation or receivership.

What is probably of some significance is the role of the labour movement in the whole scenario of structural adjustment programme in so far as it affects the interests of the workers.

To start with, the labour movement in Zambia has in the past few years, been rather very weak to influence government policy especially in the implementation of ESAP. What the country has witnessed is a quickly contracting formal sector employment and a rapidly growing informal sector. Those ejected from employment, either by virtue of privatisation or liquidation, have had little protection from the labour movement which had been left helpless as the law on collective bargaining does not allow a negotiated package for retrenched workers.

Table III:
Public companies affected by liquidation or receivership as at 31 December 1995

NAME OF CORPORATION	INDUSTRIAL	NUMBER OF WORKERS REJECTED
Mansa Batteries Limited	Manufacturing	800
National Import and Export Corporation	Trading	38
National Wholesale and Marketing Corporation	Trading	134
National Home Store Limited	Trading	406
Zambia National Consumer Buying Corporation	Trading	720
Mwaiseni Stores Limited	Trading	98
City Radio and Refrigeration Limited	Trading and Electronic Repair Works	95
*Zambia Airways Corporation Limited	Air Passenger Transport	1300
United Bus Company of Zambia Limited	Passenger Road Transport	1500
Contract Haulage Limited	Cargo Road Transport	600
TOTAL		5691

• Includes National Air Charter in Air Cargo Transport
Source: ZCTU Research Department

When ESAP started to be implemented in earnest in 1992 the laws relating to liquidation, minimum standards and employment were those dating back to the colonial era. The introduction and subsequent implementation of ESAP did not involve the participation of the labour movement at the policy, design or delivery levels although in theory the law establishes a Tripartite Consultative Labour Council (TCLC) where such important matters could be discussed. As a result of rushed implementation of ESAP without regard to the social as well as legal safety mechanisms to ensure that the law was in line with the changed economic circumstances, retrenched employees were faced with totally unrealistic and unbearable conditions for loss of employment. For instance, under the archaic law on liquidation a former employee could only be entitled to ZK200.00 (about 50 cents) - an amount which could hardly buy such an employee even a bottle of Coca-Cola in Zambia. Under these conditions, the labour movement was and continues to the helpless because of a technical hitch that retrenched former employees are no longer in employment capable of being negotiated for. Therefore, such former employees were at the mercy of the State.

Under the Statutory Instrument No. 171 of 1995 a minimum compensation of three months salary for a retrenched worker whose minimum period of service is ten years or more is provided for . There are no corresponding provisions for those employees whose period of service is less than ten years.

Beside that the labour movement is weak, (and we shall address the question as to why) the government has not been pro-active in its design and implementation of ESAP particularly as this had had an effect on levels of employment and poverty.

In Ghana, for example the government took ‘a number of steps to deal with its substantial liabilities for end-of-service benefits to retrenched workers’ [ Fn 3: ILO, World Labour Report, 1995, Geneva, p.58] .
Such steps included the introduction of a national pension scheme to replace the inadequate retirement package, a revision of the relevant laws on collective bargaining, employer responsibility and social security as well as the creation of an institutional arrangement to oversee the social costs of adjustment.

In this regard the Programme of Action to Mitigate the Social Costs of Adjustment (PAMSCAD) was put in place. Such or similar steps were not taken by the Zambian government and the labour movement has continued to be marginalised in that sense.

According tot he ILO 1995 World Labour Report another example is that of Mauritius where ‘Trade unions kept the right to negotiate their transferred workers’ terms and condition of service with their employers.’ [ Fn 4: Ibid p.59]

The Report further notes that it is close contracts between the Mauritian trade unions and the new employers that has kept to the barest minimum the adverse effects of Privatisation on employment.

With an unbridled implementation of the Privatisation programme and its adverse effects on levels of employment and, therefore, unionisation, the labour movement can only look up to the informal sector for membership. This is not without its own problems and limitations. To start with the composition of the informal sector is such as to restrict the entry of the labour movement into it. The combination of such attributes cannot favourably be exploited to labour’s advantages.

According to Nyirongo (1997) [ Fn 5: See a paper by Nyirongo Griffin ‘Employment in the informal sector. Can it be sustained?’ presented to the ZCTU? FES Policy Workshop on Employment and Lobour Market Policies, Lusaka, May 1997.] there are seven characteristics of the informal sector.

• First, the sector is heterogeneous and includes the socially repulsive and illegal activities such as prostitution and drug peddling.
• Secondly, those engaged in the informal sector are generally characterised with a very low capital intensity.
• Thirdly, informal sector activities often lack access to official credit.
• Fourthly, low or primate technology is a feature that often inhibits capital expansion.
• Fifth, the markets are limited and will often depend on established direct relationship with customers. This entails a lack of distribution network in the sector.
• Sixth, the informal sector is relatively dependent on the formal sector for inputs. By extension, a large number of those today engaged in the informal sector, finance their activities from savings generated out of formal employment.
• Finally, and this is important for the penetration of the labour movement into the informal sector, it is characterised with low and unstable wages although exceptions can be found. Indeed most of the participants in the informal sector are self-employed.

These characteristics are very visible in Zambia and can hardly be said to be favourable for the penetration of the labour movement in it. The ZCTU has in the recent past been advocating for the recruitment of informal sector participants into the labour movement and largely because of the outlined factors above, the scheme has not taken off and is unlikely to take off in the foreseeable future.

Added to this is the fact that the sector is highly fragmented making is all the more difficult for the labour movement to have a defined and coherent structure for its regulation. And this is so inspite of the steady increase of the sector as an alternative to the formal sector employment. For example, according to the Labour Force Survey, (1986) Priority Survey (1983) and the Quarterly Employment Inquiry, (1994) the informal sector grew by 28 per cent between 1986 and 1993 while the formal sector declined during the same period by 11 per cent. The 1993 survey indicates that out of the 2.3 million participants in the informal sector 56.3 per cent were self employed while 41.7 per cent comprised unpaid family workers. As additional 1.8 per cent were engaged as private sector employees and at lease 0.2 per cent were in private forms with less than five workers. These statistics further underscore the nebulous character and fragmented status of the informal sector and the difficulties compounding the labour movement penetrating in this sector.

The legal framework would also appear to be the obstacle particularly with the self employed in the informal sector. Given that the sector is heterogeneous it must follow that the economic activities are also diverse and would not all fit in one occupational definition. This being the case then one would expect a multiplicity of unions within this sector structured along crafts. The alternative would be to h have an all embracing union for the entire informal sector. As pointed out earlier, there are problems with the definition of ‘employee’ when one has to deal with the self-employed who, in any event, would not need a union to interfere with h is business as he is ‘self employed’.

With all these problems and challenges confronted by the labour movement in Zambia, what role has the State played and what has been the reaction of the labour movement. This is the subject for discussion in the next chapter.