Fin24

Lonmin warns of retrenchments

2012-10-31 17:33

Johannesburg - Lonmin [JSE:LON] Platinum has put unions on notice that it is contemplating restructuring, which could include retrenchments, the company said on Wednesday.

"I can confirm that we have notified the unions," vice president for human capital Barnard Mokwena told Sapa.

He said a news statement on the matter would be issued.

The notice to unions said the number of employees who might be affected was not known at this stage. Lonmin currently employs 28 042 people.

The company is at the centre of an inquiry into a shooting where 34 people died and 78 were wounded when the police opened fire on them during a strike over pay in Marikana on August 16.

It took more than a month before an agreement, brokered by religious leaders and the Commission for Conciliation, Mediation and Arbitration brought workers, some of whom had broken away from the National Union of Mineworkers, back to their posts and got shafts running again.

Trade union Solidarity said it received the Section 189 notice from Lonmin on the start of a retrenchment consultation process, dated October 30.

"Solidarity will do everything in its power to prevent retrenchments from taking place, because it is unfair for employees that did not participate or instigate the unprotected strike and unlawful protest action, to become the victims of the five weeks of workplace anarchy," spokesperson Gideon du Plessis said.

According to the notice, the company was reviewing its current operating model and contemplating restructuring Marikana operations.

It needed to manage current cost pressures affecting the business. A preliminary overview indicated a need for cost savings.

Signed by Mokwena, the notice reads: "All these initiatives could result in retrenchments."

Over the next weeks, management would consult on its reasons for restructuring, and to receive input from trade unions and non-unionised employees in Patterson job grades F, E, D and C.

The company wanted to reach consensus on measures to avoid and minimise redundancy, the number of redundancies, the timing of proposed redundancies, and selecting employees and severance pay for employees who might be retrenched.

The alternatives of cost cutting and a moratorium on recruitment had not been enough, and any other alternatives would be considered.

"The proposed retrenchment is envisaged to be implemented during early 2013," the notice reads.

The severance package proposed was two weeks' remuneration for each year of continuous service with Lonmin Platinum.

Notice pay, accrued annual leave and any contractual entitlements would be paid out by no later than the employee's last working day, provided a medical exit exam was concluded and company assets returned.

The company proposed to offer counselling, financial planning, and other reasonable services requested.

In the last year it had retrenched three people, the company said.

Du Plessis said, in response to e-mailed questions, for this restructuring "the target is management and not really our members, but we are representing most of the senior and skilled employees who are affected.

"We will get more information at the first consultation session next week. We merely believe that these employees are now innocent victims."

After the August 16 shooting the strike at Lonmin ended after workers were granted above-average wage increases.

Under the pay agreement, the lowest underground worker would earn R9 611 (up from R8 164), a winch operator R9 883 (up from R8 931), a rock drill operator R11 078 (up from R9 063) and a production team leader R13 022 (up from R11 818).

All workers were also promised a once-off R2000 bonus.

Comments
  • jack.blacking.56 - 2012-10-31 17:57

    Finally, time to get the machines in.

      colin.dovey - 2012-10-31 18:11

      Mechanisation of SA Gold Mines with the narrow Gold seams as not quite as simple as is the case in Copper Mining. I was involved in underground research in this - one of the alternatives we looked at was the use of Lasers. Our Gold and Platinum mines are unique for narrow seams at depth.

  • JamesMWood - 2012-10-31 17:58

    Offer them the choice of salary cut or loss of job, with christmas coming up it will be intereesting to see what they opt for. If retrenchment and payout, that money will be gone by year end, what then? Apply to another mine which is probably thinking of cutting staff too?

  • John.Yossarian22 - 2012-10-31 17:58

    No surprise there. Refer Economics 101.

  • bennie.kruger.5 - 2012-10-31 17:58

    Good, now few have more, but many will have nothing.

  • khethu.ndlovu.3 - 2012-10-31 18:05

    I saw it coming. Who has not?

  • Neal Sing - 2012-10-31 18:12

    It was predictable!No company can afford such losses and increases whilst keeping afloat.Mining costs a lot of money-running costs.I just feel sorry for the numerous families who are going to be affected

  • simon.zwane.5 - 2012-10-31 18:20

    Bad timing Lonmin. The wounds are still so fresh and the commission is still sititing. are they trying to inflame emotions and cause more strikes. Awful PR for a company with such a dented image.

      jacqui.grigg - 2012-10-31 19:20

      You reap what you sow.

      Erna - 2012-10-31 19:22

      So when should they have done it? When they've gone belly up?

      krad.knight.56 - 2012-11-01 07:36

      U obviously dnt have a cannolli abt how economics works do u ? Exports are down due to weaker demand from the WORLD !!, Production costs up...how are companies like Lonmin, Godlfields, Amplats going to survive ?? The retrenchments tht WILL happen is just the tip of the iceberg...watch the domino effect as other mining companies start. AGL has already started retrenchments at international operations...

  • ntokozo.kunene1 - 2012-10-31 18:21

    Lonmin is exploring retrenchments. There are consequences for stupidity. The 29% unemployment rate is heading for 50% in a hurry.

  • Nkuleh Kop Luthuli - 2012-10-31 18:23

    Lonmin had no choice. That what happens when you demand things which are excessive, what goes around comes around. Well done.

  • sello.r.molefe - 2012-10-31 18:27

    Productivity needs to match output... Lonmin production has been dropping nd our people have been mislead by retards..

      sbusiso.david1 - 2012-10-31 18:48

      Honourable Mr Malema must provide job for this guys who are facing retrenchments

  • john.radebe - 2012-10-31 19:12

    It's a shame that it had to come this...

  • ngoako.mathekga - 2012-10-31 19:25

    We expected that, not a suprise at all.

  • Daniel Mah - 2012-10-31 19:58

    that was coming

  • dylan.mugabe - 2012-10-31 21:16

    Pity the CEO can't dip into the 56million he takes annually. This is just more greed and is exactly why this country can't move forward.

  • krad.knight.56 - 2012-11-01 07:31

    yah neh...the chickens have come home sooner than anticipated...forward automation !!!!

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