Between 1996 and 1997, the Government of the Republic of Zambia introduced a home empowerment scheme for employees of the Government and public entities which permitted groups of employees to purchase houses. Under this policy, the eligible employees were those who were sitting tenants during the course of employment and had not yet been paid their termination benefits.
The scheme also applied to:-
- widows and children of deceased employees of the Government or public entities who had not been paid their terminal benefits at the time the Government scheme was put in place;
- retired, redundant or medically discharged employees who were employees of the Government or public entities at the time the scheme was put in place.
Beyond the government policy which applied only to public sector employees, the entitlement to housing was only so if provided for in the contract of employment. From 1965 to 1997, every employer was under obligation to cause every employee in his service to be adequately housed at all times and at his own expense. Where he was unable to provide adequate housing for employees in his service, he had a duty to pay such employees rent allowance in lieu of such housing. In 1997, this law was repealed and from 1997 to 2019, the employer had the discretion to provide to their employees with housing – it was no long mandatory.
This notwithstanding, specific workers such as general workers, office clerks, drivers, receptionists, clerks and shop workers were entitled to a monthly housing allowance at the rate of 30% of the employee’s basic salary. However, this benefit only applied to these specific workers.
In 2019, there was another change in the law. Under section 92 of the Employment Code Act, an employee is obliged to provide either housing, a housing loan, housing allowance or an advance to its employees. It is submitted that this provision has found its way back in the Employment Code Act to protect employees, especially vulnerable ones. However, the question is whether this provision will be feasible in the current financial and economic climate and whether or not it will discourage employers from having large workforces. A further problem would be that employers will be less willing to pay higher salaries to employees because of the obligation to provide them with housing or funding for housing.
The reader should take note that the Employment Code Act does not prescribe a minimum amount for what should constitute the housing allowance. This is challenging because without prescribing a minimum, in theory, an employer can pay any amount to the employee and state that they comply with the law. A further challenge is in a situation where the employer does not pay the housing allowance at all – if the employee sues the employer, it will be difficult for the court to award the underpayment of housing because no amount is provided. A minimum of 30% of the basic salary is only provided for the specific workers but for other workers, even an advance could suffice.
For these reasons, the provision on housing in the Employment Code Act, whilst a robust inclusion to the law should be looked into again given the challenges above.
