Union wins round one of PPC Aggregates – employees retrenchment packages dispute

Botswana Mine Workers Union (BMWU) has emerged victorious in the first round of its legal dispute with PPC Aggregates Botswana regarding retrenchment packages of forty five(45) former employees of Quarries Botswana & Francistown Quarries, subsidiary companies of PPC Aggregates.

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The  Francistown High Court has dismissed with costs the dilatory application by PPC Aggregates Botswana over their wrongful calculation of retrenchment packages owed and due to former employees of Quarries of Botswana and Francistown Quarries, following the company’s acquisition by PPC Aggregates Botswana.

On the 23rd August 2021 the BMWU, following its victory on the determination of whether employees were in continuous employment of PPC Aggregates, instituted proceedings for the enforcement of its Retrenchment and Redeployment Agreement against PPC Aggregates.

PPC Aggregates contended the suit and applied for an exception, citing that the BMWU’s claim disclosed no cause of action to the extent that the Employment Act made no provision for the payment of retrenchment packages.

On the 2nd September 2021, the Francistown High Court ruled in favor of forty-five (45) PPC Aggregates workers, whose retrenchment packages were wrongfully calculated by their employer despite the existence of a binding Retrenchment and Redeployment Agreement entered and concluded between Quarries Botswana and Botswana Mine Workers Union on the 11th November 2004.

The matter had been before the courts since 2012, and had gone through different stages of litigation.

In dismissing the dilatory application, Mogomotsi J said, “It is common cause that, the defendant was not party to the retrenchment agreement between the plaintiffs and their former employer. However, upon acquisition of the plaintiff’s former employer, the defendant stepped into the shoes of the plaintiff’s former employer and became the successor in title”

The Judge further highlighted that the successor in title in this instance had no right to unilaterally vary the plaintiff’s contract, “especially where such variation was calculated in its execution to disadvantage the plaintiffs”.

Botswana Mine Workers Union accused PPC Aggregates of trying to kill the BMWU’s case on technicalities and prevent it from being heard on the merits so as to avoid liability of paying retrenched employees outstanding benefits.

The dismissal of the application, means the main suit, which was instituted by summons, will proceed to trial on the merits  and initial case management conference is slated for the 16th October 2021.

“This is an important victory for workers. It shows the courts attitude towards knavish employers who harbor intentions of using accounting concepts including restructuring as justification for breaching binding agreements concluded with the Union. The ruling was fair and it gives workers a fighting chance in asserting their rights against employers in a system that often favors capital (employer) “said BMWU Executive Secretary Kitso Phiri

In July this year Botswana Mine Workers Union contended the sale of PPC Aggregates by PPC Botswana citicing the former ‘s pending labour disputes.

In third party noticefollowing Competition & Consumer Authority’ s merger notice the Union submitted that PPC Aggregates had sought to swiftly conclude the sale transaction without consulting the Union against binding obligations under its collective labour agreement (CLA) with the BMWU.

In terms of the CLA, PPC management is required to consult the Union on all and any economic activity likely to impact employees’ terms and conditions of employment.

The Union submitted that  PPC Aggregates had outstanding industrial labour matters before the District Labour Office and a Court of Appeal case in respect of annual wage increments for 2019/2020.

The Union further revealed that PPC Aggregates also had a pending case before the High Court over payment of retrenchments packages owed and due to employees following the acquisition of Quarries of Botswana.

According to section 48C of the Trade Unions and Employers Organization Act, disclosure of information by management to the Union is a legal prerequisite for collective bargaining.

The Union Executive Secretary Kitso Phiri said failure by PPC to comply with this legal requirement despite several requests to do so and was deliberate flouting of its collective labour agreement presented all the ingredients to cause the Union to make a third-party notice under section 50 (3) of the Competition Act of 2018, and interdict the sale of PPC Aggregates.

“The  conduct of PPC Aggregates is inconsistent with the International Financial Reporting Standards relating to non-current assets held for sale and discontinued operations and a breach of its recognition agreement” Phiri said in statement  in July

BMWU requested Competition Authority to conduct a thorough vetting of merger and acquisition applications by mining and quarrying companies and to introduce public hearings of these processes to ensure that all interested parties including the Union are afforded an opportunity to make submissions in respect of transactions.

In its merger notice decision Competition Authority however went ahead and conditionally approved the PPC Aggregates sale.

Pursuant to the provision of section 53 of the Act, the Authority approved the proposed acquisition of the entire issued share capital of PPC Aggregate Quarries Botswana (Pty) Ltd from PPC Botswana (Pty) Ltd by Danoher Botswana Pty Ltd with a number of conditions amongst them that there shall be no merger specific retrenchments or redundancies that may affect the employees of the merged enterprises.

However, as stated under Section 61 of the Act, Competition Authority stated that the approval does not override or negate any other mandatory statutory approvals or processes that any of the parties to the merger must comply with under the Laws of Botswana.

 

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