Job creation - Zambian labour law: the key to improving business performance
The International Labour Organization (ILO) and its partners have launched an important campaign to ensure business growth and sustainable economic development by promoting the creation of decent work in the booming Zambian construction sector.
A market analysis of Zambia's building construction market system was conducted to investigate the growth opportunities for micro-small and medium enterprises (MSMEs). Findings demonstrate that there is a strong connection between complying with Zambian labour law and business growth.
It is true that labour laws and regulations have obvious direct cost implications for MSMEs through, for instance, the imposition of minimum wages; allowances; severance pay; social security and implementing occupational health and safety measures. Equally, however, compliance with labour laws can enhance the growth prospects of businesses by contributing to improved working conditions for workers, which in turn can contribute to increased productivity and ultimately improved competitiveness of the enterprise. Facilitating good working conditions through labour law compliance, therefore, is an investment in a more productive workforce that will directly impact the performance of the business.
To make sure labour laws are understood as one of the most important tenets of the business enabling environment, ILO through the Law-Growth Nexus II (LGN II) Project is working closely with key developing partners: the Ministry of Labour and Social Security (MLSS); the National Council for Construction; the employers' and workers' organizations at national and construction sector level; and the Norwegian Agency for Development Cooperation to roll out a Labour Law Advocacy and Awareness Campaign.
The Campaign is currently reaching more than 200 construction MSME owners across the country. Members of the National Association for Medium- and Small- Scale Contractors (NAMSSC), the Zambia Association of Women in Construction (ZAWIC) and MLSS have been trained by the ILO to deliver the message of how complying with labour laws can improve the growth prospects of a business.
Ms Zila Milupi, National Project Coordinator for the LGN II Project
Over the last few years, Zambia has managed to maintain an impressive macro-economic growth rate. However, Zambia's growth has not resulted in a significant increase in job creation and progress on poverty reduction. The Government of Zambia fully recognizes the challenge of facilitating more broad-based wealth and job creation and has identified private sector development as a strategic means to boost employment, with particular emphasis on the development of Micro, Small and Medium Enterprises (MSME).
One sector with high potential for the creation of employment in Zambia by way of MSME development is the building and construction sector. This sector, which makes up 21.1% of the economy, has experienced rapid growth in recent years, and is expected to expand further due to public sector funded infrastructure development projects and strong demand in the residential housing and office retail market. The building industry in particular offers excellent potential for broad based wealth and job creation due to its comparatively high labour intensity, low entry barriers for semi-skilled and unskilled labour, and high concentration of MSMEs. The building industry is furthermore an excellent means of promoting the creation of green jobs that make a direct contribution to the preservation or restoration of environmental quality – including jobs that help to protect ecosystems and biodiversity, reduce energy, material and water consumption through high-efficiency strategies, de-carbonize the economy and minimize or altogether avoid generation of all forms of waste and pollution.
The application, effective enforcement and compliance of MSMEs with the labour laws in Zambia depend enormously on the overall knowledge and comprehension of the labour laws by the MSME operators themselves. A large number of Zambian employers and workers remain unaware of their rights and remain unprotected from potential injustices or victimization. The overall lack of understanding of labour laws by individuals in MSMEs as well as the lack of dissemination of the law and poor literacy rates renders this hurdle a challenge to overcome. There is, further, inadequate appreciation among MSMEs of the value added to the business' performance through complying with labour laws and improving working conditions. Indeed MSMEs don't always realize that compliance with labour laws can significantly improve performance of the business. These information communication obstacles directly contribute to the lack of respect for the rule of (labour) law, which undermines the quality of employment created through the MSME sector. It is these factors that the Green Jobs Programme seeks to address through the advocacy and awareness campaigns on labour laws, including adherence to occupational safety and health (OSH) and social protection (SP) components of labour law.
The Law-Growth Nexus II Project, with its specific focus on increasing the uptake of labour laws, is part of the Zambia Green Jobs Programme. The Green Jobs Programme is a joint UN programme involving Food and Agriculture Organisation (FAO), United Nations Conference on Trade and Development (UNCTAD), International Trade Centre (ITC), United Nations Environment Programme (UNEP) with ILO being the lead institution.