Retailer Pick n Pay said it was cutting about 25% of its workforce or roughly 500 jobs in light of plans to restructure the company “aimed at reversing losses and setting the business on the path of sustainability”.
The 100% Namibian-owned company, which is a subsidiary of Ohlthaver & List (O&L) Group, has a total workforce of 1 931, with 22 retail stores countrywide. The company said it avoided retrenchments in March after last-minute talks with the Namibia Food and Allied Workers Union (Nafau) where various alternatives to retrenchment were proposed.
Pick n Pay managing director Graeme Mouton said the employees, through the shop stewards and the union, have rejected the company’s offer.
“As you are aware, the O&L Group is passionate about people, and therefore all efforts were made to identify alternative measures to save the business while guarding as many jobs as possible. Covid-19 and lockdown only compounded an already dire situation, necessitating business realignment in order to secure the business and jobs into the future,” Mouton reasoned.
Mouton, however, said although they presented some proposals to the union leaders for consideration, such discussions were unsuccessful in finding an alternative to retrenchments due to Covid-19 negative effects on the economy.
Mouton said they also considered the proposals presented to them by the union, but these options did not deliver the cost savings required to sustain the business. The options on the table were that the employees agree to sacrifice the annual salary increase and forgo a 13th cheque this year, but that going forward, the 13th cheque would be converted to a performance-based bonus whereby bonuses would only be paid once the company is profitable.
Last year, both parties agreed that, as effective of 1 July 2019, about 1 830 Pick n Pay Namibia employees would receive a wage increment of 6% in the first year (1 July 2019 – 30 June 2020), 6.5% increase in the second year (1 July 2020 – 30 June 2021) and 7% in the third year (1 July 2021 – 30 June 2022) for both permanent employees as well as permanent variable time (PVT) employees.
At the time, both parties agreed that transport allowance for both permanent and PVT employees, as well as a housing allowance for permanent employees, would also form part of the agreement, while a 13th cheque equal to one month’s pensionable salary was guaranteed. Another agreement was that the cash card discount benefit, which Pick n Pay employees enjoy, be reduced. The last option was that Sundays would be included in the normal six-day working week, calculated monthly instead of weekly, as is currently the case.
Pick n Pay said that due to the prolonged economic downturn and reduced consumer disposable income, the company has experienced marginal to negative turnover growth over the past five years. Additionally, the company said that while the recession has steadily eroded turnover, costs have increased annually above inflation on all fronts, resulting in a decline in profit, leading to losses over the last two years.
2020-06-19 11:16:23 | 1 months ago