M&F 'to axe 38% of its staff'

"There is something wrong at Mutual and Federal. The company wants to get rid of 38 percent of its employees within eight months," said spokesperson Jaco Kleynhans in a statement.

He said the union had asked to have discussions with the company regarding an Article 189 notice it had issued stating its intention to dismiss the workers.

According to Mutual and Federal's annual report, the company had 3 311 employees at the end of December 2007 and, as suggested by the Article 189 notice, 2 678 employees at the end of May 2008.

Kleynhans said the group planned to retrench 623 employees within eight months.

Kleynhans said that according to the Article 189 notice, Mutual and Federal also clearly stated that there had been no retrenchments during the previous 12 months.

He said the proposed dismissals were part of a restructuring project named Claret. It would see employees retrenched if their positions no longer existed in new structures being formed, as well as employees whose current positions would differ dramatically from those in the new structure.

In March this year, Mutual and Federal had the opportunity to sell 70% of the company at R27.50 per share to Royal Bafokeng Holdings, but rejected the offer, said Kleynhans

"Last Thursday, Mutual and Federal's shares traded at only R17.50 per share."

He said the union was not happy with the company's "deception" regarding the magnitude of the retrenchments, and that it was obliged by law to discuss this with unions whose members were affected.

"The wrong heads are rolling. The problem is with management and shouldn't be placed on the employees' doorstep," Kleynhans said.

Comment could not be immediately obtained from Mutual and Federal.

- Sapa