Meikles forced to retrench 55 workers

MEIKLES LIMITED is reviewing the trading model for its departmental retail unit, Meikles Stores, which has been forced to retrench 55 workers due to viability challenges.

The bid to cut costs by reducing the size of the workforce has, however, run into problems after the workers rejected the company's proposed retrenchment package.

Meikles Limited confirmed the plans to review Meikles Stores trading model, but would not go into the finer details except to say it was a result of low demand and competition.

Meikles Stores has since retrenched 35 non-managerial and 20 managerial staff in a bid to reduce costs and improve viability threatened by the low demand and competition.

Meikles Limited executive director Mr Mark Wood said: "Due to the lack of disposable incomes amongst the general population and competition from the informal market the existing trading model is being re-examined to determine best way forward."

Meikles Stores is a division of the Meikles Stores Group, comprising other well-known department stores including Greatermans and Barbours. The stores group is a subsidiary of Zimbabwe Stock Exchange- listed conglomerate Meikles Limited.

Retailers face stiff competition from imports, especially low priced products from China and South Africa, which supplies about 60 percent of products consumed in Zimbabwe.

Zimbabwe relies heavily on imported products due to low capacity utilisation in industry, which is suffering from lack of funding following a decade of economic decline.

Mr Wood would not discuss the disputed retrenchment package for the workers Meikles Stores has laid off saying: "In view of the fact this issue is before the Retrenchment Board, it would be premature to speculate on the outcome."

However, workers' legal advisor Mr Tawanda Katsuro of the Zimbabwe Labour Centre said the dispute with the employer largely revolved around issues of service pay, severance package, relocation allowance, medical aid cover and gratuities.

"They (Meikles) argued that the employer is making financial losses and is in the process of restructuring the business from department to (general) retail," he said.

While Government will decide on other disputed issues the parties have agreed on issues of gratuities and re-engagement of the workers after three years when viability improves.

Workers want five months' service pay, four months severance package, four months relocation allowance and 18 months medical aid cover against the employer's one month service pay, two months severance and six months medical aid cover.

The agreed package would then be multiplied by the number of years served by an individual to determine each of the laid off workers' total retrenchment package.

Mr Katsuro said that the argument that Meikles Stores could not afford the package demanded by the retrenched workers because it was facing viability challenges did not hold water because its parent company, Meikles Limited, was operating profitably.