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Business Reporter.
Meikles Department Stores has reversed its decision to retrench 55 workers after the Retrenchment Board ordered it to pay out almost US$1 million in retrenchment packages. Meikles department stores chief executive Mrs Belinda Sharples said the company has since reinstated the workers after deciding to grow the business rather than pay US$900 000 in retrenchment packages.
“We cannot afford to pay the packages proposed by the Retrenchment Board because we are currently facing a liquidity crisis. It is better for us to grow the business and create employment rather than pay the packages.
“Our decision to retrench has been reversed by the executive and the company is prepared to carry the costs,” she said in an interview.
The Retrenchment Board proposed that Meikles pay a month and a half salary per year served but the retail company challenged the judgment.
In an appeal letter to the Retrenchment Board, Meikles Stores stated that it cannot afford the proposed retrenchment packages.
“During the course of the retrenchment board meeting we agreed that if the board chose to impose packages above what we are ready to offer, Meikles Department Stores would have no option but to continue to carry to the monthly expenses of excess staff and allocate them to the various business units,” read part of the letter.
As part of the appeal the company said the Ministry of Labour and Social Welfare together with the Retrenchment Board do not have the power to impose retrenchment packages on the employer.
The letter stated that the retrenchment application is made by an employer to seek the board’s permission to retrench and neither the board nor the minister has the right to terminate the services of an employee of Meikles Department Stores.
“Once permission is given to retrench, the employer then has the right to decide whether to exercise that permission or not and obviously the size of the package will determine whether the retrenchment should go ahead or not. In this case it is in our best interests not to retrench,” part of the appeal added.
However, the Zimbabwe Labour Centre, which is representing the Meikles employees, defended the position of the Meikles Stores employees saying the employer-employee relationship was under threat therefore the company was supposed to adhere to the judgment proffered by the board.
“It is now common cause that the minister approved the proposed retrenchment of the employees on October 14 this year.
“The employer-employee relationship ceased to exist, thereby we request that Meikles Department Stores should initiate the payment of our clients’ retrenchment packages forthwith,” Mr Gwisai said.
Meikles Stores has been posting losses since the advent of dollarisation four years ago and in August this year the retail company announced its intention to lay off 55 workers in Harare and Gweru.
The Thomas Meikle Stores group currently comprises eight department stores: Barbours, Greatermans and Meikles Department stores in Harare’s busy Central Business District, including the specialised hardware outlet in Orr Street; a Barbours Store in Sam Levy’s Village, Borrowdale, and Meikles Department Stores in Bulawayo, Gweru, Mutare and Masvingo.
The stores offer a selection of electronic and household appliances, ladies’ and men’s fashions, boys’ and girls wear, furniture, kitchenware, luggage and travel accessories, a wide range of shoes and footwear, baby and toddler gear, toys, and other family “goodies”.
The first Meikle Store in the country was opened in Masvingo (then Fort Victoria) in 1892, when Thomas Meikle, with his brothers Jack and Stewart, saw a business opportunity to supply a starved market and moved across the border from South Africa. The businesses grew rapidly, with stores being opened in quick succession countrywide.
However, the department store concept is slowly being overtaken by events globally, hence the need to downsize by reducing trading space and trimming staff as well.
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