Redundancy in Zambian Labour Law

Your worst fear has happened! After cutting your budgets and modelling numerous business scenarios your organisation has decided it needs to make staff redundancies. The bad news is you are about to enter some of the most difficult and painful times of your career. The better news is I am going to share a step by step guide about how to legally conduct your redundancy process in Zambia.

Having led several redundancy projects I understand that it can be quite overwhelming. Between deciding which roles should be affected and redesigning your organisational structure, labour laws may be the last thing on your mind. However the Employment Code Act, 2019 and the Employment Code (Exemption) Regulations, 2020 outline labour laws you must comply with when conducting redundancies.

The redundancy process

The redundancy process according to the Employment Code Act, 2019

Please note that all uncited in-text quotations from this section are derived from the Employment Code Act, 2019.

Step 1: Reasons for redundancies

According to section 55(1) of the employment code, terminations can be classified as redundancies if they fall under one of the three classes below:

  1. The employer ceasing or intending to cease to carry on the business by virtue of which the employees were engaged.
  2. The business ceasing or diminishing or expected ceasing or diminishing the requirement for the employees to carry out work of a particular kind in the place where the employees were engaged.
  3. An adverse alteration of the employee’s conditions of service which the employee has not consented to.

Therefore if your terminations do not wholly or partly fall under the three reasons above, it is possible they are not redundancies.

Step 2: The redundancy package

Employees are entitled to “a minimum redundancy payment of not less than two months’ pay for every year served and other benefits the employee is entitled to as compensation for loss of employment.”

This payment should be made “not later than the last day of duty of the employee.” In an instance where the payment cannot be made by the last day of employment “the employer shall continue to pay the employee full wages until the redundancy package is paid.

With this being said, the employment code has a section (127) for the application of more favourable conditions that states:

where a contract of employment, collective agreement or other written law provides conditions more favourable to the employee, the contract, agreement or other written law shall prevail to the extent of the favourable conditions.”

This matters to you! Imagine a scenario where your contracts of employment state that you will pay employees 3 months for each year served (gratuity) upon termination. Such a condition is more favourable to the employee than section 55(3) on redundancies. Therefore, keep this in mind as you make a decision. You may want to get a legal opinion on this or ask the Ministry of Labour for guidance.

Step 3: Notify the Ministry of Labour

60 days before the intended date of termination you will need to inform an authorised officer from the Ministry of Labour. This can be done in form of a letter containing the following information:

  1. The reasons for the termination by redundancy
  2. The number of categories of employees likely to be affected
  3. The period within which the redundancy is to be effected
  4. The nature of the redundancy package

I advise that you do this a few days before the final 60-day mark in case you are required to provide additional information.

Note that the Employment Code (Exemption) Regulations, 2020 also addresses Ministry of Labour Notification. Check out the redundancy section of my article on these regulations here for more information.

Step 4: Notifying Employees

Not less than 30 days before the intended date of termination, you will need to inform employees or their representatives of the impending redundancies. These notifications should include:

  1. The number of employees if more than one is to be affected
  2. The period within which the termination is intended to be carried out

These 30 days are also intended to be a consultation period to give employees or their representatives an opportunity “to minimise the termination and their adverse effects.”

According to Sithole-Mwenda and Changu (2021, p. 330), in their Comprehensive Guide to Employment Law in Zambia, the consultation period is intended to:

A Comprehensive Guide to Employment Law in Zambia
  • Give the employer an oppurtunity to explain the reasons for the proposed termination (. . .)
  • Hear representations on possible ways of avoiding or minimising the effects of the terminations
  • Discuss and consider alternatives
  • Reduce the number of employees to be declared redundant
  • Mitigate the consequences of the redundancies.”

This news will probably be unexpected and have gross consequences for employees and their families. Therefore as you make your communication plans, think about how to do it in a way that accounts for the fact that you are sharing information that will change peoples lives.

During your notification to employees, remember to be empathic and kind.

Note that the Employment Code (Exemption) Regulations, 2020 also addresses Employee Notification. Check out the redundancy section of my article on these regulations here for more information.

Other questions on redundancies

  1. What if our organisation cannot afford to pay redundancies due to finacial incapacity?
    • Your organisation “may apply to the Labour Commissioner for exemption from paying the redundancy payment:
      • As a lumpsum
      • On or before the date of expiry of the notice of redundancy
  2. Are there classes of employees who are not entitled to redundancy pay?
    • Casual employees
    • Temporary employees
    • Employees serving a period of probation
  3. What happens if the organisation is doing better and we want to hire people in the same roles?
    • If this occurs within 9 months of the terminations due to redundancies “the employer shall offer a contract of employment, in respect of the vacancy, to the employee previously declared redundant, before considering any other applicant.”

Please note that the above is intended for general information purposes only and does not constitute legal advice.

5 thoughts on “Redundancy in Zambian Labour Law

  1. Knowing that Employment Code (Exemption) Regulations, 2020 came into effect to regulate employment and labour market relationships in the wake of Corona and as well as trying to mitigate the effect of COVID-19 on organizations, my question would be is this gazette notice (No. 394 of 2020) issued by the Minister of Labour still in effect considering the fact that most of the COVID-19 restrictions have been relaxed?

    I would love you to tackle this in your next article.

    Liked by 1 person

    1. That’s actually a very good question and I was thinking about it as I wrote this. Given that Employment Code (Exemption) Regulations, 2020 also touch on redundancies! I will consider writing about that next! Thanks for taking the time to go through and share your feedback.

      Like

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