22 August 2014

Zimbabwe: Zupco Hamstrung By U.S.$15 Million Debt

THE Zimbabwe United Passenger Company (Zupco) has attributed the firm's failure to pay salaries to its precarious financial position which includes a debt overhang of more than US$15 million, businessdigest has established.

In response to a July 30 letter by the disgruntled workers' lawyer, Exodus Donzvambeva from Wintertons Legal Practitioners who had given the company seven working days to pay outstanding salaries or face litigation, Zupco CEO Tendai Masaire said the company was working towards paying all its salary arrears.

More than 800 workers at Zupco engaged Donzvambeva to get their unpaid salaries and allowances amounting to more than US$1,3 million.

"The failure to pay the arrear salaries has not been deliberate but is a result of the depressed revenues which the company is currently receiving," Masaire wrote to Donzvambeva in a letter dated August 13 2014. "The company also has a debt overhang of more than US$15 million and this includes salary arrears."

He added that the company has an obligation to pay employees retrenched in 2010 their severance packages. Masaire said the company plans to have paid up all retrenchees by October.

Management felt for the plight of its workers,and was making efforts to ensure that they are able to pay their salaries every month, he said.

Masaire pointed out that the company has applied to the Ministry of Labour for an exemption of the 6% increment effected last year by the National Employment Council (NEC)for the Transport Operating Industry.

"As your client is well aware, the company filed an application for exemption on the 6% increment. The company cannot afford to increase the salaries of its employees when it is failing to pay them the current salaries," he said.

"An appeal against the decision of NEC turning down the application has been made to the Ministry of Labour and the company awaits the minister (Nicholas Goche)'s decision on the appeal."

He said the national workers committee chairman Onson Mashinga had no legal right to represent the company's employees when suing their employer.

"He (Mashinga) is the national workers committee chairperson but that does not give him powers to represent the employees outside the company," Masaire said. "There is no indication that every one of the employees cited in the attachment on your letter agreed or authorised him to institute legal proceedings against the company."

Zupco has since suspended Mashinga, sources said.

Meanwhile, Donzvambeva this week, on the instruction of the Zupco employees, wrote to the NEC for the Transport Operating Industry to intervene in the dispute between the workers and their employer.

"Our clients have instructed us to launch with your good offices several unfair labour practices which are being perpetrated against them by the employer," Donzvambeva said, "and these include non-payment of outstanding salaries, non-payment of food allowances for drivers and conductors, unpaid leave days, placing of employees on short time without approval from the NEC, non-payment for working on industrial holidays and non- payment of 6% increment which was effective on 6th July 2013."

He said the company has not bothered to engage workers for mutual discussions and "kindly request the urgent intervention of your good offices."

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