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Mine denies claims that it will cut salaries

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“We were not aware that they were planning to make such a drastic announcement on the salary cuts and conditions of employment”

KIMBERLEY Ekapa Mining (KEM-JV) has refuted claims that it will reduce the salaries of employees by 12.5%.

This follows a statement by the National Union of Mineworkers (NUM) in Kimberley, which expressed its outrage regarding the apparent reduction in salaries.

In the statement, the union said that it had been blindsided when informed about the salary cuts during a meeting that was called earlier this month on November 14.

According to the regional secretary of NUM, Cornelius Mahne, the union was not afforded an opportunity to consult with its members about the matter.

“Normally we have to consult with our members once we are given the right information. The manager, however, said they will not allow us to consult. We were not aware that they were planning to make such a drastic announcement on the salary cuts and conditions of employment,” said Mahne on Saturday.

“The general manager said he is not discussing anything with any union and merely sharing the company’s view on cutting the salaries of our members. We made it clear that we cannot allow being ambushed and undermined because we have a collective agreement that must be observed.”

Mahne claimed that work conditions are also set to be changed.

“The employer wants to cut maternity leave for employees from three months paid and one month unpaid. The sick days is said to be cut from 120 days to only 36 days. We are shocked by these announcements, especially since we were not granted an opportunity to consult with members.”

Mahne said that the salary reduction would hit employees hard.

“One has to remember that the same company cut salaries by 5% not so long ago. Now they want to cut another 12.5% from employees. How will these workers survive? Employees are demoralised and angry. Who would not be when more than 10% is taken away from your livelihood.”

He added that the union was also not informed about what prompted the decision.

“This company was starting to do well. They were not struggling. We were never told what led to this decision and are in the dark about their reasons,” said Mahne.

However, Ekapa’s chief executive officer (CEO) Jahn Hohne said yesterday that employees were informed about the challenge that the company was experiencing and that they had managed to turn the matter around.

“All Kimberley Ekapa Mining (KEM-JV) staff members were informed on November 7, 2019 that the company has managed to turn the business around sufficiently so that a salary reduction of 12.5% across the board for all staff members could be uplifted. Full salaries will be paid again to all KEM-JV personnel from November 2019 onwards,” said Hohne.

“Everyone pulling together to save our company made it possible to prevent the closure of the mine and the retrenchment of our 1 400 employees. I am truly proud of each employee, who as a collective showed what can be achieved when you do the right thing for the right reasons with the interest of the whole team at heart.”

Previous reports stated that KEM-JV had become economically unsustainable and unviable as a result of world market price reductions for rough diamonds, unless an alternative business model could be implemented.

Hohne said the employees suffered a three-month pay reduction.

“The three-month temporary salary reduction was effective as of August 1, 2019, while the company also reduced and optimised contractor, service provider and other costs. The success of the interim measures was dependent on employees committing to ensure that the safe and fully productive capacities of all business units were achieved, specifically targets for increased underground production. The salary reductions have been uplifted in the meantime, although the company is not totally out of the woods yet.

“We are working diligently to reimburse all the salary reductions as soon as possible with repayments from the earliest available distributable profits. Our target is to start the first repayments from the middle of December 2019,” he said.

The company said that a separate issue is a new proposal for the alignment and standardisation of some benefits for employees.

The general manager of KEM-JV, Howard Marsden, said that NUM had excused itself from a meeting to address the matter.

“The company believes that this is an important issue and requires consultation with all stakeholders. We therefore initiated the consultation with representation from all stakeholders, including NUM and other union and non-union representatives,” Marsden said.