Retrenchment Board gives AMH ultimatum

via Retrenchment Board gives AMH ultimatum | The Herald December 11, 2015

 Ivan Zhakata Herald Correspondent
The Retrenchment Board of Zimbabwe has given Alpha Media Holdings (AMH) an ultimatum to show its audited financial statements, total wage bills and a breakdown list of the managers who were dismissed. The board yesterday ordered AMH, the publishers of NewsDay, The Zimbabwe Independent and The Standard newspapers, to bring the documents to court after the company claimed it was in financial constraints and could not afford to pay its dismissed managers.

This comes after AMH made an application for exemption from paying out full retrenchment packages after it dismissed 70 workers following the July 2014 Supreme Court ruling that allowed employers to terminate contracts on three-months notice. In its application, AMH managing director Mr Vincent Kahiya said his organisation has been experiencing viability challenges.

“Following the 17 July 2015 Supreme Court judgment, Alpha Media Holdings (AMH) terminated employment contracts of eighteen (18) employees on notice. Parliament went on to amend the Labour Law adding a new provisions that employees dismissed on the basis of the Zuva decision are to be paid retrenchment packages in retrospect,” Mr Kahiya said.

“AMH makes this application for exemption from paying packages because the business is financially incapable and consequently unable to pay retrenchment packages timeously.

“Since January 2014, AMH has been experiencing viability problems. This is because AMH has been unable to generate sufficient sales and advertising revenue. This can be attributed to the liquidity constraints that the country as a whole is facing and the low economic growth.

“Unfortunately for AMH, operating expenses have remained the same in particular as they relate to fixed employee costs of salaries and stator obligations, and overheads such as electricity and rentals,” he said.

Mr Kahiya said AMH’s revenues have failed to meet its expenses and that the company “is in perpetual loss making position and this has affected its ability to pay its employees full monthly salaries timeously since January 2014”.

Mr Cephas Mavhondo representing Thomas Mashava (vendors supervisor), Walter Marwizi (editor of The Standard), Joe Mudangwe (accountant), Henry Diya (sales and distribution manager), Miranda Sibanda (Bulawayo office manager) and Wellington Toni (sports editor of NewsDay) successfully argued that the board could not make a decision without AMH’s financial statements.

“The board is urged to demand that employer furnishes our clients and the board with the total number of employees whose contracts of employment were terminated, the package each employee is supposed to be paid, the current wage bill and the bank statements,” Mr Mavhondo said.

“The employer alleges that 18 employees had their contracts terminated on notice. This is disputed. It is on record that the employer terminated contracts of nearly 70 employees. The figure 18 is misleading and an attempt to trivialise the actual numbers. To confirm that the employer has the financial capability, immediately after terminating the contracts of the said 70 employees, the employer employed almost the same number of employees as replacements,” he said.

Mr Mavhondo also told the board that AMH failed to disclose its external funding from the Media Development Investment Fund (MDIF). He said MDIF injected $250 000 to fund the retrenchment exercise in which Trevor Ncube, AMH chairman’s relatives benefited.

“The employer is publishing their newspaper titles on a daily and weekly basis which proves that they are financially able,” Mr Mavhondo said. “Trevor Ncube has profitable businesses outside Zimbabwe, namely Mail and Guardian, a weekly newspaper in South Africa.”