Meikles pays workers $600k for layoffs

via Meikles pays workers $600k for layoffs – DailyNews Live 21 March 2015

HARARE – Meikles Limited subsidiary, Thomas Meikles Stores, has set aside $600 000 towards the laying off of 150 staff members as part of its restructuring plans following the closure of a number of their stores countrywide.

The group has since 2012 closed Greatermans and some Meikles stores and the hundreds of workers affected were accommodated in the Meikles group so that they would not be rendered unemployed.

Panganayi Ngorima, the Thomas Meikles Stores spokesperson said the company had been forced by economic factors beyond its control to reduce the number of outlets in its stores’ division.

“Thomas Meikles Stores has been forced to close branches since 2012 and we have tried to absorb those affected staff either into our remaining outlets or transferring them to other companies within the group,” he said.

“Unfortunately, we were not able to accommodate all the affected employees and this has resulted in today’s decision to pay off those staff members,” added Ngorima.

Yesterday, the company paid the affected employees’ benefits, which included payment of the three-month notice period, leave pay and gratuities for staff that have worked for the company for more than five years.

Ngorima noted that the company has at all times strived to balance the welfare of the employees with the economic reality facing the stores “and we believe the termination packages we have paid today represent the best compromise between these two considerations”.

The Meikles group of companies is one of Zimbabwe’s largest employers with a staff compliment of over 9 000 people nationwide.

Most companies in the country have been on a restructuring exercise since the introduction of the multiple currency system in 2009 due to the harsh economic environment as evidenced by low aggregate demand and negative inflation.

The gloomy situation is forcing many companies to either scale down operations or completely shut down as there seem to be no light at the end of the country’s anaemic economic crisis.

The National Social Security Authority estimated that more than 700 companies officially closed while over 10 000 jobs were lost between 2011 and 2014, further affecting disposable incomes and demand.

Struggling companies are in sectors such as the motor industry, tourism, agriculture, security, furniture, mining, cement, engineering and timber.

Even government is struggling with its wage bill and has been advised by the International Monetary Fund (IMF) to retrench to ease the burden on treasury.

Due to economic hardships, most companies are laying off in large numbers while those who resign or are fired are not being replaced.

Some workers in Harare and Mutare protested against the layoffs but analysts were quick to point out that actually Meikles had done well to pay off their workers unlike other companies which have to be dragged to court to pay or who have to be liquidated first.