Rail parastatal TransNamib has set the wheels of retrenchment in motion with an internal memo sent to their employees, notifying them of the process.
The leaked memo in The Namibian’s possession reads: “Management hereby informs you that TransNamib Holdings Limited will commence with a rightsizing process through voluntary exits.”
The document is dated 3 November, and is signed by the company’s chief executive officer, Johny Smith.
In August this year, the company informed its workers of its plan to retrench about 340 of its employees – nearly a quarter of its current workforce.
This is to take place as part of a strategic business plan of the state-owned company which was approved by the Cabinet in 2018.
The company currently has 1 309 employees.
The downsizing exercise is targeting 154 employees who are close to retirement age, and 186 who are currently part of what has become the rail services operator’s non-core business.
The exercise would cost the parastatal roughly N$44 million to execute, but would save it a minimum of N$25 million on an annual basis.
The cost of employment for the company stands at 71% of its total annual income.
The company says the retrenchment process started at the beginning of this month.
“The retrenchments will take effect at the end of each month from November 2021 till end of March 2022, and will entail a voluntary early retirement exercise (strictly according to the TransNamib Retirement Fund rules), as well as for qualifying employees in specific business units that have been deemed non-core to TransNamib as part of its integrated strategic business plan (ISBP),” the memo says.
The retrenchments are necessitated by the company experiencing a substantial decline in cargo volumes, as well as by some positions becoming redundant as a result of certain services, like roads operations, being discontinued.
“As a result, it has become necessary to reduce the staff complement of the company to match its present business pattern and structure,” he says.
The offer is made only to employees who are employed within the non-core and support functions of the business, as well as employees who are within five years of normal retirement.
All retrenchments would strictly take place on a voluntary basis, and the offer is generally open to all employees, except to trains operations, shunters, assistant train drivers, train drivers, diesel electric fitters, plate layers, trackmen, track welders, and engineers, the memo says.
The retrenchment package offered to employees comprises severance pay of one week’s remuneration for each year of continuous service, one month’s notice on retrenchment, and a week’s special notice payment as per the recognition agreement with the Namibia Transport and Allied Workers Union (Natau) for employees in the bargaining unit.
The company says the process would be handled strictly within the stipulations of the Labour Act, and in accordance with Natau’s recognition agreement where applicable.
Meanwhile, TransNamib spokesperson Abigail Raubenheimer says the company will not comment on a leaked document.
The matter has to follow internal processes before it can be shared externally, she says.
“Should the document, which is an internal document, be published, TransNamib has the right to pursue this matter legally,” she says.