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Prosper Ndlovu and Fairness Moyana, Business Reporters
COAL miner, Hwange Colliery Company Limited (HCCL) has pressed the panic button after it hinted workers should brace for retrenchment as part of a restructuring exercise meant to save the troubled parastatal from collapse.
The exercise is expected to trim top management and render scores of workers jobless in a move that acting board chairman Jemester Chininga said would cut labour costs by $15 million per year.
The board and management met in Hwange on Monday to discuss the issue, which has angered the disgruntled workers who are owed more than two years in salaries.
“The purpose of our visit is to kick start the process of downsizing. We’ve met the management to brief them about the process. We even told them that we see there’s a super structure at management level,” said Chininga.
“The next step is for management to go down so they can identify a leaner structure that’s in line with the level of our activity in the business.”
He could not be drawn to disclose how many workers were likely to be affected by the restructuring exercise but only said the process would cut across posts using the grading system.
“We’ve some indications but these figures aren’t fine but our initial estimates are that we can save $15 million a year with a leaner organisation. Once management has identified the departments and areas that need restructuring we’ll be moving into stage two of the implementation plan,” said Chininga.
However, close sources say about 1,300 of the estimated 3,000 plus workforce would likely be affected by the exercise through the abolishment or re-assigning of some senior positions, early retirement and forced leave.
Indications are that the company will seek to have workers opt for voluntary retrenchment through a notice.
A copy of a draft notice shown to Business Chronicle states: “The offer is open from 4th of April to 8th of April 2016. The deadline for submission of application is therefore 8th of April. Applications will be submitted to Mr J Zulu.”
However, management has said it reserves the right to approve the applications insisting not everyone would be eligible.
“As the company is going through very difficult times, should we fail to get sufficient numbers through voluntary retrenchment, other measures may be adopted,” reads the notice.
The initial application scheme applies to management employees from levels one to executive. However, indications are that it will extend to the entire staff in due course.
Out of the 23 managers currently running the affairs of the company, only eight will remain, the sources said.
The conditions of the voluntary package offer include paid leave and notice pay — in line with the number of leave days per individual plus three months notice pay at two weeks’ pay for every year of service.
The notice says HCCL has engaged the Reserve Bank of Zimbabwe about issuing Treasury Bills as a guarantee for salary payments.
Chininga said the latest financial results in which they posted a net loss of $115 million were not pleasing and reflected a need to downsize the workforce, which was no longer aligned to the level of operations.
He painted a gloomy picture of high expectation of turning around the company’s fortunes arguing that the current liquidity situation in the market was gravely affecting the sourcing of working capital needed for operations.
“We’ve been trying to raise funds and after successfully raising the funds for major equipment we needed to raise working capital but the liquidity situation in this market is very tight.
“We’ve come to the conclusion that the market can’t support us quickly enough for us to start recovering.
“We’ll still continue to try and raise funds in the market. But in the meantime we’ve realised that our level of operations are no longer aligned to the level of workforce that we have,” Chininga said.
HCCL, which requires at least $10 million working capital, has been facing serious operational challenges emanating from the undercapitalisation and underutilisation of new equipment sourced from India and Belarus last year.
The mining company is facing litigation for claims amounting to $20,6 million while cases worth $20,1 million have been awarded against it.
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