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Retrenchment deal softens the blow at Rio Tinto Rossing

21 March, 2013The Mineworkers Union of Namibia has negotiated favourable retrenchment packages for 276 workers at Rio Tinto’s Rossing Mine. The mine has been experiencing losses for some time affected by lower demand and prices for uranium.

“We have raised the bar in Namibia on how retrenchments should be handled with this case at Rossing” said acting General Secretary Jackie Karumbo. Management at Rossing embarked on the retrenchment exercise with the involvement of the union through a transparent process. Once workers accepted that retrenchment proposal due to affect almost a quarter of the workforce was a last resort measure, the union was able to negotiate favourable settlement packages, improving on the initial offer made to workers.

The final agreement exceeds legal minimum requirements for retrenchments in Namibia that only stipulates severance pay of one week wages for every year of service. Retrenched workers will receive three weeks wages for every year served as severance pay plus three months notice pay, pro rata thirteenth cheque, commutation of leave and a farewell donation. Medical aid benefits will remain in place for a period of four months after the retrenchment date.

In addition, retrenched workers have been offered three months training at a local technical college paid for by the company to improve skills that will hopefully assist workers when seeking future employment. They will also be entitled to remain in company housing for six months or receive six months housing allowance if they choose to leave immediately. Retrenched workers will be receive two months pay to assist with relocation on their departure.

Currently a voluntary separation exercise is taking place at Rossing and the union is assisting workers to understand their individual packages so that they can make an informed decision. MUN hopes the exercise will drastically reduce the number of workers that will be involuntarily subjected to retrenchments.

Karumbo says that MUN has learnt valuable lessons from negotiating the retrenchments. “We are not advocating retrenchments but one can not deny that retrenchments will happen in tough times. As unions we need to be proactive and ensure we have negotiated proper retrenchment policies in companies during good times. Companies need to put money away as part of their risk management for when the day comes that the company has to retrench, we hope it never comes but if does then the burden on workers is lessened.”