Pula Steel extends employees� unpaid leave
Onalenna Kelebeile | Tuesday August 2, 2016 18:00
This is despite the fact that the parties went for mediation at the labour department early this week where Mmegi Business is informed that Pula Steel was ordered to pay the employees as it was found to be in contravention of Section 16 of the Employment Act.
The company sent its employees on a one-month unpaid leave at the beginning of July after it was ordered to close down for failure to comply with the set safety standards to instal pollution control system by the Department of Waste Management and Pollution Control in June. Corporate Services director, Brian Mosenene confirmed the extension of the unpaid leave. He said the extension was necessary because though they have completed the installation of a pollution control system to comply with the necessary safety standards, they do not know when the Department of Pollution Control and Waste Management will inspect and give a green light for the plant to resume production. “If we allow employees to return to work now we will face a situation where we cannot afford to pay them,” he said.
The administrative closure of the company in June aggravated the already weak financial situation of the company and placed the company in a position where it fails to meet its financial commitments, including payment of salaries.
“We have completed the construction of all necessary pollution control facilities and have since written to the department to come and conduct inspections. They promised that they will come in due course after which production can resume,” he added.
He also confirmed that they went to the labour department for mediation and said the department will advise on the way forward.
“We sought legal advice before we resorted to giving employees unpaid leaves so the decision we took was within the scope of the law. Employees have the right to lodge a complaint with the department, but we still stand by our position,” he said.
Mosenene said employees complained of late consultations, but when the plant closed “we immediately” started the process of appealing to authorities. “We realised that we cannot afford to keep employees when there is no production,” he said.
Employees on the other hand said that Pula Steel was found guilty of breaching the Employment Act hence the arbitrator is expected to be issued an advisory award for the company to pay its employees because it was unlawful.
Pula Steel is the first integrated steel plant in Botswana with 71% shareholding by BCL Mine and was constructed at a cost of P130 million. The suspension of operations at the plant means that Pula Steel loses about 100 tonnes of production daily and P70,000 a day towards fixed costs and has a negative effect on gross profit amounting to P100,000 a day.