East African Portland Cement Company (EAPCC) has declared its entire workforce redundant, effectively firing its entire staff and asking them to reapply under new terms.
In an unprecedented retrenchment decision that has shocked its staff, the firm said it has been incurring losses of upto Sh8million every day and it cannot take it anymore.
“In the last three years, the company’s market share has drastically reduced, impacting negatively on sales and subsequent profitability,” a leaked internal memo signed by its acting managing director Stephen Nthei said.
“This may be attributed to many reasons, key amongst them being increased competition and inadequate working capital,” the memo added. Nthei said he was in a meeting and is yet to return our calls to clarify how many staff will eventually be fired, but the move is set to see hundreds sent home.
The firm, which is majority owned by the government, has also blamed its poor performance on the dilapidated plant and machinery, which it says is in dire need for modernization to give it a competitive advantage.
“These basic challenges touch on the company’s ability to meet crucial performance indicators including staff costs,” the memo reads.
Consequently, the company says it is now faced with the need to restructure its operations, which will include a staff rationalization programme ‘to balance the institution’s running costs and current levels of productivity.’
“This process will, unfortunately, render jobs redundant. In the spirit of fairness and in regard of the service rendered by the affected staff, this exercise will be done within the provisions of section 40 of the employment act collective bargaining agreement,” the firm said.
Nthei says all positions in the company will be declared redundant and all employees released. Subsequently, all jobs will be reconfigured in terms of job consolidation and enrichment, and in line with a leaner organisation structure.
The action by Portland marks a new high in the ongoing sackings in corporate Kenya. No firm has taken a similar action of letting all staff go in the recent past, but it appears the firm has taken the action to shield itself from political interference.
According to the terms of termination, staff will be given a notice period according to their individual contracts. They will also be given severance pay for 30 days for every year worked as well as payment of all accrued gratuity to the date of separation.
They will also be paid their accrued leave days. They will then be encouraged to compete for the few positions that will be created in the new organisation.
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