Project or task specific contracts and HR flexibility within Zimbabwe's construction industry

When I got into the construction industry, I realized that it was a totally new playing field that is different from telecoms. One of the prevalent employee contracts management practices in the Zimbabwean construction industry is the use of project or task specific contracts and hourly wage rates. These two HR practices were agreed upon by both employers and employees under the S.I. 45 of 2013.

Whilst I do not have any challenges with them (hourly rates and project specific contracts), I shall show you how they influence labour flexibility and the industrial relations climate within this industry. I do not deny that this could have been one of the best deals that employers reached in regulating the employment relationship.

I show you how these two practices put the role of HR dominantly on settling industrial disputes. I do not believe that HR should focus mostly on settling disputes! HR should set up systems to create work stability! HR must help the business in making money!

I shall also show you what mechanisms should be set so as to transform the role of HR in Zimbabwe's construction.

What is a project or task specific contract of employment?

A project or task specific contract of employment is a legally binding agreement between an employer and an employee which is expected to lapse once the task or project in question comes to a lapse. This contract is more common in project based work where there is a high degree of uncertainty about when projects and tasks at hand shall end. Under this contract, an employee is rewarded basing on factors such the job complexity of the task or project, the value or business that one brings the value of the project and so on.

In terms of the Labour Act Chapter 28.01, these contracts of employment are loosely expressed on section 12 (3) which reads, “A contract of employment that does not specify its duration or date of termination other than a contract for casual work or seasonal work or for the performance of some specific service, shall be deemed a contract without limit of time.” 

In the construction industry under section 27B(1) of the S.I. 45 of 2013 reads, “A contract that does not specify its duration or date of termination other than for the performance of a specific service, shall be deemed a contract without limit of time.” . Annexure 12, Clause 17 of the Collective Bargaining Agreement of the construction industry which is registered as S.I. 45 of 2013, shows an example of this type of contract of employment.

When employers are to offer employees certain types of employment contracts, they must explicitly state that this contract of employment is for strictly the performance of a specific task, service or project. For example, if a lawyer gets a client to offer legal services to someone who is being accused of theft at work the can reach a specific contract of employment. A specific contract is be reached between the client and lawyer that the latter is hired to handle legal representation for the alleged offender. When the work has ended then, the contract shall come to lapse.

Such contracts of employments are also ideal within the construction industry were the duration of employment of employees is directly dependent on a project work. Once the project ends or is discontinued, then the employment relationship is automatically terminated

What are hourly based rates of employment?

When an employer rewards or pays employees for the services that they require, they have a certain measuring yardstick that they may use. This can be the work done, time spent on a job or the amount of business that one brings in. One of these systems is called time rate and is based on the time that one spends on the job. This is one of the most common ways of rewarding employees and can come in various forms such as annual salaries, monthly salaries, weekly wages or hourly wages. In the Construction Industry as catered for under section 36B of the S.I. 45 of 2013, employees are rewarded basing on hourly rates of pay.

What is HR flexibility?

HR flexibility is the ability for a firm to be able to vary its Human Resource requirements basing on a particular situation. Given this current VUCA environment, companies are always seeking for ways by which they can be flexible with the staff numbers, staff skills and capabilities and staff costs. Hence this will see companies seeking for ways in which they can be flexible so as to remain viable entities. Such a concept has brought in HR practices such as flexi-time, performance based pay, shorter term contracts of employment, outsourcing and gig jobs.

A project based or task specific contract of employment is able to give employers such flexibility with their human resources. Having defined what a clearly shown you what a project or task specific contract of employment, hourly rates of pay and HR flexibility, I shall go on to show you how this affects HR flexibility and the resultant effect on the Industrial relations climate.

Impact of Project or Task specific employment contracts on HR flexibility

1.      Change of HR and business models

Nowadays the business environment is always uncertain. HR and business models quickly change as companies try to adapt and suit the difficult operating environment. More recently over the past few weeks there have been some gripping shortages of cement in Zimbabwe. Cement is a critical raw material within the construction industry. Suppose there is no cement, will you continue building a house project or you suspend it for a while? What happens to the employees? Do you pay them whilst they are seated or you don’t? If you do, what is the monetary cost impact?

Hence companies which use the project or tasks specific contract of employment are able to quickly vary their staff numbers and ultimately the amount of money that they pay employees. This will enable them to flexibly change the way they conduct HR (HR model) so as to suit environmental demands.

2.      Employers are able to easily vary their numbers and threatening employee job security

Given the dominance of specific contracts, employers may easily terminate employee’s contracts of employment by means of putting in vague clauses on the nature of a project. These terms may be inscribed as, “To conduct digging of trenches at the building site.” The employer may simply wake up and inform an employee that there is no digging to be done and hence your contract of employment has ended.

Alternatively, employers may inform an employee not to come to work because the specific work that the employee was employed for is temporarily suspended due to project changes. For example, an employee was employed to paint and his or her contract of employment specifically states that. The employer may wake up today and change project plans due to any reason. Hence the employee who was employed to paint is rendered jobless.

There can be also cases were an employee may be asked not come to work because there is a work stoppage or any other justifiable reason. This practice is legally allowed at law within the construction industry under section 39 (1) of the S.I. 45 of 2013 although how an employer enforces this clause is subject to other labour law principles and practices such as the right to fair labour standards and constructive dismissal. 

Section 39 (1) of the S.I. 45 of 2013 reads,

“If not having been notified to the contrary, an employee attends for work at the designated time and place and is informed by his/her employer prior to commencing work that no work is available that day because of unsuitable weather and /or unworkable site conditions, the employee shall be paid for three hours at his/her current hourly rate for his/her attendance.”

Henceforth, such a clause gives room for an employer to frustrate an employee until they resign. Remember employees re paid on an hourly basis for the time for the total number of hours that they come to work. If an employee does not come to work, he or she is not paid! Off course there are other parties such as workers committees and trade unions that may give the employer pressure on such an issue, but the employer still has the room to exercise his or her own discretion. In the same vein the job security of employees become threatened!

3.      Employers are able to be financially flexible and hence this affects the stability of an employee’s monthly earnings.

As referred above on section 39 (1), employers have the power to conduct work stoppage and rain-off due to bad weather conditions and evade having a huge wage bill. Thus employers are able to control their wage bill through work stoppages. Whatever method employer choses to select employees not to come to work, an employer has the power to determine the monetary costs of his or her monthly wage bill.

This on the other hand threatens the stability of an employee’s monthly earnings. In some situations, the employees will not know how much they will be earning by the end of the month due to the precarious nature of their jobs.

4.      The length of the notice period is often contested.

In terms of section 12 (4) of the Labour Act chapter 28.01, an employer should give due notice to an employee whenever a contract is about to lapse depending on the duration of the contract. The question that often arise is this, ‘Do task specific contracts of employment require either party to give due notice?’ If so, how long shall be the notice period? If so, is it really being practiced? If not, what is the legal basis for that? For now, I shall leave this hanging. ‘If an employment relationship is regulated by a task or project specific contract of employment, is there any obligation at law by any party to serve due notice?’

5.      Indefinite projects make exposes employees to job insecurity

Generally the duration that an employee works on a given project is vague and quite often employees do not know whether they will remain employed under the same project within the next three months or so. We know in terms of project management, that the time of when a project shall end is not exact. What’s only given are project estimated times which vary due to a number of factors.

Impact on the industrial relations climate

Precarious work conditions which results in a propensity to embark on collective job action or any action that enables employees to vent out anger on the employer. Given such uncertain work conditions, there is always a high chance of the prevalence of unfair labour practices such as long working hours, conflict between management and employees and unfair labour standards. HR best practices will definitely go under threat!

It is common HR professional knowledge that when conditions are precarious, propensity to join unions, long working hours, etc.

Impact on the organisational structures and policies

Due to the fact that most companies are more structured basing on projects, permanent employment for some occupations and roles is not guaranteed. Secondly organisational structures are always changing as roles swiftly change with project demands and new projects coming up.

HR policies generally need to be flexible or otherwise; they will become a source of rigidities and bottlenecks within the company. Some employers might chose to run the risk of embarking on poor governance by not having HR policies at all. If they have some, they may have the barest minimum possible policies.

                                                

Role of HR practitioners in the construction industry

Given such a hostile work environment, the role of the HR practitioners thus forced by circumstances to be that of an Industrial Relations expert. If HR practitioners in this industry do not set up good systems, they will remain engrossed with conducting the largely administrative role of hiring and firing. HR KPIs will definitely become reactive instead of being proactive and preventive!

HR may eventually fail to play a strategic role and focus on value adding activities such as HR budgeting, HR forecasting, talent risk management, organisational design, remuneration modelling, setting up alumni societies, performance management and training and development. I believe HR must help the business in making money.

Recommendation

1.      HR must be data savvy

Given such circumstances, I strongly recommend that HR must be proactive and focus on creating systems that are preventive in nature. HR must keep up to date data on why certain industrial relations cases are happening. It is quite simple, excel sheets and mere observation can help HR to deduce the root causes of organisational distress are. HR would then be able to co-relate issues and predict the likely trends that are going to happen in the future.

For example if there are more issues to do with accidents coming from one department, why are they happening? What should be done? HR must not just focus on processing medical bills and attending to those injured at work. They must go beyond that and seek for appropriate remedies to solve that.

2.      Engagement and communication is key

“Men hate each other because they do not know each other… They do not know each other because they do not communicate… They do not communicate because they are separated…- Martin Luther King Jnr.          

Most problems can be solved through talking and discussions. HR must focus on ways to ensure that there are constructive engagement and communication channels within the company. These can have a wonderful impact on employee engagement levels, revenue per employee levels, average project completion time, average labour cost per year and hours spent on disciplinary hearings.                                                                                                      

3.      HR to invest more in Employer branding so as to attract the best talent

In simple terms, employer branding is simply expressed as the value that is attached on a company reputation in relation to its conditions of employment. This value is assessed by a company’s stakeholders such as its employees, prospective employees, the general public, its customers, investors and the government.

A good brand would help the company in an array of benefits such as boosting investor confidence, attracting top talent, controlling talent attrition rates, enhancing credit worthiness of the company and the ability to get lucrative contracts.

In terms of employer brand management, I recommend an inclusive approach since the concept is influenced by all facets of the business. Hence I strongly recommend that companies should set a business sustainability and reputation panel that also involves key decision makers such as the Chief Executive Officer (or her or his Executive Assistant), Chief Talent Officer, Chief Marketing Officer and Finance Director.

This panel would then cascade down to lower levels of organisation such as the shop floor. Remember that for a strategy to be successful, everyone should be involved!

Conclusion

Every industry and work situation has its own issues that influence key HR dynamics within work organisations. What is more critical is to create an HR strategy that has KPIs aligned with the situation and execute it effectively. All the concepts such as HR flexibility, task or project specific contracts and hourly rates are not detrimental to your business if they are properly managed.

My ideas are not prescriptive or pointed towards anyone. These ideas are meant to share insights and help each other as business professionals. More so, I am not an authoritative source of reference. Does not and copy paste my ideas without thinking critically. My views remain an act of independent thinking that is open to debate and I acknowledge that. Nevertheless, take time to listen to the sound of the honey bird and you will definitely find honey!

About the Writer

The writer is called Farai Mugabe. The writer holds a Master’s degree in Strategy and Governance and a BSc. Human Resource Management (Honours) degree. He is a top graduate from Midlands State University and is currently working with a global construction firm in delivering value. The writer is one sprouting talents in the HR and strategy fraternity. Farai was awarded two coveted academic awards by Midlands State University and these are, The MSU Book Prize and The T & H award for the best male student in the HR Management department.

He has worked in the following industries: The Telecoms, construction, health care, and education industries. On top of that Farai has worked in both the private sector and public sector and also had some first-level contact with the Mining and Non-Governmental Organisation (NGO) sectors.

The writer has a broad understanding of people and strategy and is one of the emerging talents in the HR industry. Farai is a results driven individual who has a strong passion for people and strategy issues. He is strong-willed and transformative in approach. This article reaffirms his undying love for Strategy and people!

In this article, Farai discusses how Project or task specific contracts influence HR flexibility within Zimbabwe’s construction industry. This will eventually have a butterfly effect on the Industrial relations climate, the HR strategy and business strategy. The writer also goes on to give solid and pragmatic recommendations on how to handle the situation.

Reading this will equip you with the requisite Project or task specific contracts and HR flexibility within Zimbabwe's construction industry. It will also give you key insights as to how to effectively manage such a scenario from a Business and HR perspective.

  As usual, Farai is novel in his approach. He is able to build suspense and interest as well simplifying all business issues at hand with less jargon. The author writes in his personal capacity and this article was written for sharing insights and academic purposes only. Therefore he accepts no liability for any injuries, inconveniences or whatsoever that this article might cause. He can be reached on the following email address: [email protected]