Home » General » HCCL Ordered to Pay U.S.$1,2 Million Exit Packages

Hwange Colliery Company Limited (HCCL) has been ordered to pay more than US$1,2 million retrenchment package to 16 managerial staff it laid off after embarking on a retrenchment exercise two years ago.

The 16 were part of the first batch of 200 workers that were retrenched, with the company arguing that they could not fit in the company’s turn around programme.

The managers are owed a total of US$1,261 173,12.

After Hwange Colliery failed to honour its obligations, the workers took their case before arbitrator Professor Lovemore Madhuku seeking to recover their severance packages.

Prof Madhuku ruled that HCCl terminated the contracts of employment of the 16 pursuant to a retrenchment exercise and should pay the agreed packages which were approved by the works council in terms of the Labour Act.

“Accordingly, I award as follows: That the contract of employment of each of the claimants (workers) be and is hereby declared to have been terminated on 31 August 2012 pursuant to the retrenchment exercise in the present case,” Prof Madhuku said.

“That the respondent (HCCL) be and is hereby ordered to pay each of the claimants the agreed retrenchment package which was approved by the works council.”

The dispute for determination was whether or not the workers were still HCCL employees notwithstanding the retrenchment which started in June 2012.

HCCL argued that notwithstanding the agreement, it exercised its right not to proceed with the retrenchment after realising that it could not finance the severance packages that had been approved by the relevant minister.

The workers’ lawyer, Mr Albert Chambati of Chambati, Mataka and Makonese law practice, argued that his clients were entitled to the agreed retrenchment packages following developments that led to the termination of their employment contracts.

In his ruling, Prof Madhuku said once the employer made a decision after the agreement, it was bound by it and could not thereafter purport to revoke it.

He described the HCCL’s letter of August 19 2012 seeking to reinstate the workers as a nullity.

“The employer cannot revoke a termination lawfully made after the completion of the retrenchment procedure,” said Prof Madhuku.

In June 2012, HCCL wrote to 200 workers informing them that the implementation of the company’s re-engineering and restructuring programme supported by the ERP technology resulted in the company having excess labour requirements.

In this case, the selected workers were declared redundant and excess to the requirements of the coal mining giant.

After the retrenchment agreement was sealed, HCCL wrote to the affected workers seeking to reinstate them after it allegedly failed to raise the money for retrenchment.

The workers said they had not been paid to date.

Mawere and Sibanda law firm represented HCCL in the case.

Source : The Herald