US dollar payment of salaries dilemma

WITH the economic meltdown continuing to erode salaries, many employees are now searching for ways of preserving their earnings and many are now demanding payment in US dollars. Unions have already made their position on wage payment clear, they are demanding payment in US dollar and employers have openly responded by saying that without exporting and earning foreign currency they are unable to meet workers’ demands.

Some workers have dusted their contracts and are threatening legal action if they are not paid in US dollars; they argue that when they signed employment contracts their contracts were in US dollars and as such the employer cannot pay them in bond notes or RTGS transfers. The question that arises is what will happen if such disputes are taken to court.

The legal argument that is raised by workers is that their contracts are express in that out of the multi currencies, which are legal tender in Zimbabwe, the employer chose to pay in US dollars and offered them a contract in US dollars and not bond notes or RTGS transfers.

Their argument is that despite the fact that the Reserve Bank said and made law that said the US dollar and bond notes were equal, the law did not say they were identical. They argued that because the bond notes were merely equally to the US dollar they are not currency and they cannot be used outside Zimbabwe. They argue that they tolerated bond notes because they were banked in the same account with US dollars and now that they are banked separately they can no longer accept bond notes and RTGS payment but they want their pay to go to their real US dollar account.

This argument has not been without critics, while some lawyers are cautious arguing the matter is winnable depending on how the contracts were crafted, others say the matter could be difficult to win given that the practice of mixing bond and RTGSs is backed by Reserve Bank legislation and others argue that the arguments can be defeated by Public Policy considerations.

Some have argued that by accepting bond notes for all these years workers had by implication accepted bond notes and RTGS and as such they cannot now turn around and argue that they do not want bond notes and RTGS transfers. The whole discussion is a sensitive and emotional one to employers who are watching their dollar value becoming eroded and workers whose salaries have lost buying power.

In conclusion, instead of litigating it’s important for stakeholders and Government to engage each other and find a workable solution to avoid collapse of businesses and long litigation, which might not be that helpful to desperate workers.

Davies Ndumiso Sibanda can be contacted on: Email: stratwaysmail@ yahoo.com.