Retrenchments further killing the economy

In the face of retrenchments and thousands of youth entering the market, joblessness is on the increase.

29 October 2018 | Business

Let us hope the economy will recover so that employers can start and increase recruiting, or recall employees. Erkki Nghimtina, minister of labour, industrialisation and employment creation

Yolanda Nel

In the past year, retrenchments have become synonymous with a number of Namibian companies, with more than 1 600 people having been retrenched in a six month period.

These figures date from October 2017 to March 2018 and since then, even more Namibians have lost their jobs. “Retrenchment makes you feel as if you weren’t a good enough worker,” said Riaan Pretorius* who was recently retrenched.

“How does top management make a decision like that? Is it based on your income, how long you’ve worked at the company or what?” he wanted to know, adding that the people who were retrenched at the company he worked for, have been there for many years.

“Others who were not retrenched haven’t even completed a full year at the company,” he said, however, this could not be confirmed before going to print.

Few vacancies

In the current financial environment, vacancies are few and far between. “And when you see something in your field, you also know that you are competing with students who have just finished school or university,” Riaan said.

Experience is valuable but it comes at a price – a price some companies are not willing to fork out for anymore.

“Luckily we still have my partner’s salary, but as I was the breadwinner, we had to make some sacrifices, especially with regards to household expenses,” he said.

Although he survived retrenchments at the company he works for, Anton Visser* says his and other staff members’ salaries were cut. But even with the salary cut, Anton says some people’s salaries weren’t paid, with some having to wait months for their wages.

At some point during the year, the financial situation improved somewhat, but now they are back to square one, with a couple of months of salary in arrears again

“Many of us are being forced to dip into our savings just to get by – that is if they were in the position to save in the first place,” he said.

Reasons

Labour, industrialisation and employment creation minister Erkki Nghimtina spoke at the National Assembly on Thursday, saying that many retrenchments were due to the closure of companies, contracts ending and restructuring. This reaction came after a question by Popular Democratic Movement lawmaker, Jennifer van den Heever.

Van den Heever had questioned issues around unfair retrenchments and asked if government had mechanisms in place to protect employees. “To what extent has your ministry made sure that procedures are followed when employees are retrenched?” she asked.

Nghimtina said he views retrenchment as a last resort when all other means to preserve employment have been exhausted. He added that the Labour Act provides some form of protection to employees identified for retrenchment. This includes that the employer must give at least 30 days’ notice of the intended retrenchment to a recognised trade union or workplace union representative as well as the employee.

He added that said notice must specify the reasons for dismissal, the number and category of affected employees and the date of dismissal.

The employer must also negotiate in good faith with the trade union to explore various possibilities, as opposed to just retrenching employees. This include alternatives to dismissal; looking at the criteria for selecting employees for dismissal; how to minimise the dismissals; the dismissal conditions and how to avert adverse effects of the dismissal, Nampa reported earlier this week.

Heart-breaking numbers

Statistics provided by the minister show that from 1 October to December 2017, 781 employees were retrenched. Of these, 280 employees were retrenched from 38 companies due to their closure. Sixty-seven were retrenched due to their contracts ending, while 59 were let go as a result of company takeovers.

An additional 196 were retrenched for economic reasons, while 105 lost their jobs due to restructuring. Also, during the period in question, 74 employees lost their jobs due to technological changes and other reasons.

As for the period 1 January to March 2018, 835 employees were retrenched from 87 companies. During these six months, the ministry handled 1 151 labour disputes, of which 899 were successfully conciliated without leading to a strike.

For now, Nghimtina and his ministry have pinned their hopes on the recovery of the economy.

“Let us hope the economy recovers so that employers can start and increase recruiting, or recall their employees, and in this way contribute to the reduction of high unemployment and retrenchment in the country,” he said.

*Not their real names

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