In Namibia, union resists shutdown of state-owned factory and retrenchments

The state-owned August 26 Holdings is planning to shut down one of its subsidiaries on the grounds that a theft of USD 1.76 million has caused financial stress. The union has demanded a halt to the retrenchment plan

January 27, 2020 by Peoples Dispatch
Namibia workers
(Photo: Namibian Broadcasting Corporation)

The Namibia Food and Allied Workers Union (NFAWU) has taken a stand against the planned retrenchment of 86 workers employed in a textile and garment factory owned by August 26 Holdings Limited, a state-owned enterprise. Shares of this company are held by the ministry of defense on behalf of the government of Namibia.

August 26 is planning to shut down its textile and garment factory because of a N257 (USD 1.7) million theft, allegedly committed by someone from within the company, which has landed it in financial stress. However, the union is skeptical of the claim.

“For the past two years, they planned for the closure of this business and did not make any effort to have a meeting with the employees and share the problems or the company’s financial difficulties they alleged,” said the general secretary of NFAWU, Jacob Penda, according to The Namibian.

It was only in a meeting on January 15 that the company informed the union that all the 86 workers employed in the textile and garment factory will be retrenched by February 28.  

Since the board has claimed that the company has not been making profits, “where is this stolen money coming from, if it was stolen from the company’s account?” asked Penda, demanding that the retrenchment plan be put on hold. 

“We are asking them to put this retrenchment on hold until we get the right information and the issue of the missing money has been dealt with. We must find alternatives to keep employment of these people in the current entity,”  Penda said.

While the company has tried to reassure the union that it intents to absorb the retrenched workers into other subsidiaries of August 26 Holdings, the union has pointed out that this might not be feasible because none of the other 10 subsidiaries of the company manufacture textiles and garments. 

“Is there any subsidiary within the holding company that is doing textiles apart from the subsidiary that intends to retrenching workers?” Penda questioned. “How will someone employed as a textile trimmer be deployed within the holding company? As a trimmer, am I able to do logistics at the other subsidiary or advertise insurance?”

 The NFAWU has asked the company for more information on the missing money and its source. A meeting between the company and the union to discuss this issue is set to take place this week.

“In the absence of relevant information, we cannot take it up to the next level. Relevant structures have to intervene to secure employment of these people rather than retrench them,” Penda said.