East African Portland Cement Company (EAPCC) has laid off 800 employees in the company, in an attempt to create a much leaner workforce in order to trim the company’s wage bills.
On Thursday the 8th of August 2019 the acting managing director of East African Portland Cement Company (EAPCC) Stephen Nthei, made it known that the roles previously handled by the sacked employees, will be merged and salaries subsequently reduced to keep the cement manufacturer afloat.
Mr. Stephen Nthei is quoted as saying that, “We have a workforce whose total cost, compared to the productivity, is very high. Our target is to operate with less than 600 people earning less than what they are earning now.”
Regarding re-employment, all former employees who successfully reapply for jobs will be expected to take a 40 percent cut on their previous wages.
As at June 2018, Portland Cement had 936 employees which were split as 448 on a permanent basis and 488 on contract. The figure has since dropped according to the acting Managing Director.
A memo which was sent to all employees by Stephen Nthei, stated that the firm has makes a loss of 8 million Kenyan Shillings every day, and will as a result, have to declare redundancies in order to avoid collapse.
The memo reads, “All positions of the company will be declared redundant and the employees released. Subsequently, all jobs will be reconfigured in terms of job consolidation and enrichment in line with restructured and leaner organisation structure.”
It added that, “The company acknowledges that the exercise is a difficult decision but the best option in the present business circumstances.”
Acting Managing Director of East African Portland Cement Company (EAPCC) has called for a meeting of all staff next week, on Friday the 16th at the factory’s headquarters in Athi River.
The East African Portland Cement Company (EAPCC) has already notified the workers’ union and the Labour office.
With the first group of employees expected to be laid off early next month (September), the East African Portland Cement Company (EAPCC) has already notified the Workers Union and Labour Office.
According to Mr. Nthei, the management of East African Portland Cement Company (EAPCC) wants a staff count of not more than 600.
600 million Kenyan Shillings will be spent in the redundancy.
The Managing Director stated that, “It is this high because majority of people who have been on unionisable levels have to be paid their gratuity levels when severing the relationship.”
East African Portland Cement Company (EAPCC)’s management has informed its staff that all payments will be made at the point of exit, adding that permanent workers will get a golden handshake of 30 days for every year worked, accrued gratuity, as well as outstanding leave days.
For employees on contracts, the only severance will be to pay for contract termination.
Workers will also be paid a sum of 1.5 billion Kenyan Shillings which was awarded to contract staff after losing the case to stop the award after it was issued by the industrial court in July 2015.
According to reports by Business Daily Africa East African Portland Cement Company (EAPCC), is stuck in negative working capital with its obligations maturing within the next 12 months outstripping current assets by Sh7.3 billion. This potentially makes it difficult to service its short-term obligations.
The East African Portland Cement Company (EAPCC) is counting on cash inflows from the sale of its land to the Kenya Railways Corporation (KRC). About 3 billion Kenyan Shillings, is reportedly still outstanding.
The Managing Director stated that, “We have received commitment of the payment of this money and we want to be matching it with phased implementation of this programme.”
The East African Portland Cement Company (EAPCC) had in 2018, sold 900 acres of its prime land to the Kenya Railways Corporation (KRC) at 5 billion Kenyan Shillings.
The East African Portland Cement Company (EAPCC) has so far, received a downpayment of 1.2 billion Kenyan Shillings.
The land will be used as an inland depot which is currently under construction.
