|12 August 2016
In the face of a prolonged economic downturn and the need to restructure, ship repair company Elgin Brown & Hamer (EBH) Namibia has – after nine weeks of negotiation with the Mining Metal Maritime and Construction (MMMC) union – successfully managed to reduce recent retrenchments to a minimum and ensure the bulk thereof opted for voluntary separation.
At the time of the decision to retrench employees, EBH Namibia employed 551 people – 466 permanent staff and 85 fixed-term contractors (FTCs). Of the 102 employees retrenched, 82 opted for voluntary separation; while ultimately only 20 employees had to take compulsory retrenchment.
“Of the 82 employees voluntarily retrenched, there were 17 in the 55 – 62 year age bracket, of whom seven volunteered for early retirement,” explains Hannes Uys, CEO of EBH Namibia.
“It is also noteworthy that 71.3% of those leaving EBH Namibia opted for early retirement or voluntary retrenchment; and that compulsory retrenchments made up less than 30 % of the total number of employees retrenched,” he adds.
Regarding retrenched expatriate employees, he adds that – depending on market conditions and the demand for resources at that point - the company will recruit Namibians to fill these positions.
The last working day for those affected by the retrenchments was July 29, 2016.
"It is a painful decision to have to retrench and not something we took lightly," asserts Uys, emphasising that it is EBH Namibia’s sincere intention and hope that the retrenchment packages provided will assist the affected employees to move forward constructively.
With a prolonged low oil price and depressed economic cycle, it was imperative for the company to reduce costs and improve efficiencies. In March 2015, EBH Namibia began proactively implementing stringent performance improvement projects (PIPs).
In spite of these proactive steps, EBH Namibia continued to experience a 50% decline in docking activity. In response, the company carefully analysed both operational and human resources aspects of the company. It was found that, in spite of the savings brought about by the PIPs, the prolonged downturn dictated the adoption a company-wide restructuring and stabilisation programme, announced in April this year.
In deciding to implement the retrenchment decision, EBH Namibia worked closely with the MMMC, the EBH Namibia Workers Representative Committee (WRC) and the Namibian Labour Ministry. To reduce compulsory retrenchments to a minimum, early retirement and voluntary retrenchment options were offered to all EBH Namibia employees, irrespective of their seniority.
Commenting on EBH Namibia's relationship with the MMMC and the WRC, Uys says: "Our relationship with the MMMC and the WRC as strategic partners is good, and we are continuing to enhance it.We would also like to extend our sincere thanks to both parties for their cooperation leading up to signing of the Retrenchment Agreement," he continues.
The MMMC is affiliated to the Namibian National Labour Organisation (NANLO), whose President is Evilastus Kaaronda, who concurs with Uys's comments: "The fact that this agreement was ultimately achieved through mutual co-operation and perseverance demonstrates the willingness of both parties to work together to ensure the company's long-term future," he says.
"There is the very real possibility that, when the oil price strengthens, we will be able to re-employ some of those whom we have just had to retrench," Uys continues. With a view to this, the company intends forming a 'pool' of Namibian FTCs that it will call on as and when future projects require additional resources.
"It is widely predicted that a resurgence of the oil price is very likely to occur in mid to late 2017. The tough measures that we are being compelled to take now will ultimately ensure a stronger and more sustainable EBH Namibia; which will be ready to take full advantage of the upturn when it comes," he concludes.