PICK n Pay Namibia has announced that it will retrench a total 500 employees from its 22 retailers around the country.
This was revealed by Managing Director of Pick n Pay Namibia, Graeme Mouton, who stated that various rounds of discussions with the Namibia Food & Allied Workers Union (NAFAU) and shop stewards were unfortunately unsuccessful in finding an alternative to retrenchments.
Mouton stated that although Pick n Pay Namibia considered the proposals presented by NAFAU, these options did not deliver the cost savings required to sustain the business.
“The employees, through the Shop stewards and Union, regrettably rejected the company’s proposals, opting to rather follow the retrenchment route,” he said.
The giant supermarket group further claims that in March 2020, in an attempt to avoid retrenchments, Pick n Pay engaged NAFAU, with which the company has a recognition agreement, to propose various alternatives to retrenchment such as employees agreeing to forgo the annual salary increase.
It was also suggested that employees forgo a 13th cheque this year, but that going forward, the 13th cheque would be converted to a performance-based bonus whereby bonuses will only be paid once the company is profitable.
In addition, the retailer stated that the cash card discount benefit
which Pick n Pay employees enjoy, be reduced and that Sundays be included in the normal 6 day working week, calculated monthly instead of weekly as is currently the case.
“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,” said Mouton.
He further added that due to the prolonged economic downturn and reduced consumer disposable income, the company experienced marginal to negative turnover growth over the past five years.
Furthermore, while the recession has steadily eroded turnover, costs have increased annually above inflation on all fronts, resulting in a decline in profit and leading to losses over the last two years, Mouton said.
He added that a restructure exercise aimed at reversing losses and setting the business on the path to sustainability was therefore initiated.
In addition to various cost cutting measures, the company also offered employees voluntary separation packages and early retirement options.
Mouton noted that uptake on these offers were, however, low, resulting in extensive dialogue through which the company presented the employees with the option of retrenchment or alternative measures aimed at reducing costs without job losses.
Pick n Pay is a 100% Namibian-owned entity that employs a total 1 931 employees at its 22 retail stores in most major towns in Namibia and subsidiary of the Ohlthaver & List (O&L) Group.