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The East African : May 3rd 2015
The EastAfrican BUSINESS MAY 2-8,2015 CROSSED LINES Africell in legal battle with sacked workers Ab≥upt ≥et≥enchment of middlelevel and senio≥ manage≥s last month is the subject of an inqui≥y By GAAKI KIGAMBO Special Correspondent conduct a quick but extensive restructuring of Orange to retun it to profitability is now fading. This follows a determined cam- T paign by retrenched staff to be paid all terminal dues due to them. The company’s abrupt retrench- ment of its middle and senior managers last month — despite a promise not to at a December meeting with officials of the Ministry of Gender, Labour and Social Development — is now the subject of an inquiry by the same ministry. The ministry’s chief accounting officer said last week that they are waiting to hear from both the company and the sacked employees before making a decision on the way forward. “There are a number of meetings going on because before I solve the problem I must understand from all sides,” said Pius Bigirimana, the Permanent Secretary at the ministry. “I have now listened to the com- plainants and I have meetings with the Africell people also. When I have all the information, I will compare it against each other then get my legal team to check for any legal implications before we take any final positions,” added Mr Bigirimana. Should the ministry decide in favour of the retrenched workers, their victory is likely to inspire those staff whom the company retained but who have not been for- he hope that the Lebanon-based Africell telecoms group would mally transferred to Africell to either insist on the terms that they previously worked under or to demand better ones. The EastAfrican has learnt that Africell has neither issued new appointment letters nor official work IDs with its logo as proof of legal takeover of the staff too. Yet, like a number of other telcos, it has outsourced some departments, along with staff members it retained, to human resource agencies in order to cut costs and lessen the burden of directly managing a large workforce. However, there has been little explanation, let alone prior information, about these changes, which is causing anxiety because employees cannot tell who the official employer is. On March 27, Africell terminated 60 contracts just a day after management had communicated plans to lay off some members of staff in order to establish a solid ground for the company and to give it a competitive edge in the market. The targeted staff members were denied access to the company premises and actually learnt about their fate two and half kilometres away at Kabira Country Club, an upmarket fitness centre, where management had asked the security manager, assissted by a column of police officers from the antiterrorism unit, to direct them to converge. A legal note to the company from lawyers of the retrenched reads: “We have had the opportunity of perusing our clients’ termination letters, contracts of service and 36 Kisa≥awe d≥y po≥t coming soon HELLEN NACHILONGO Special Correspondent A PRIVATE cargo handling and logistics company, DSM Corridor Group Ltd, has started construction of a dry port in Kisarawe district, 40km from Dar es Salaam port. The project will cost a total Tsh32.8 billion ($17 million). According to DSM chief execu- tive officer Erik Kok, the move is aimed at reducing congestion at the Dar es Salaam port. “The multipurpose dry port is approximately 100,000 square metres; at the moment; we have started developing 20,000 square metres,” he said. Mr Kok told said the current WORKERS DEMANDS Orange workers at a past expo. Picture: Morgan Mbabazi your human resource manual and have concluded that your actions were highhanded and a brazen breach of their terms and conditions of service. “Our clients found your termi- nation benefits package lacking in so many ways and did not address most of their concerns as per their contracts of employment and the human resource manual,” the note further reads. But Mohammad Ghaddar, Afri- cell’s chief executive officer, insists every action the company has taken so far was necessary, proper and legal. “First of all, nobody was laid off arbitrarily. Everybody was laid off under the law. It was a collective termination and we informed the labour department [at the Ministry of Labour] as per the law and we paid everybody their terminal benefits including their leave days, allowances and other payments. So what we have done was completely according to the laws in Uganda,” Mr Ghaddar told The EastAfrican. Through a letter from the Uganda Communications Employees Union to the Ministry of Labour, the retrenched workers are demanding: Full payment of the March salary; A certificate of good service, accompanied by a cheque covering unpaid overtime; All claims from the provident fund, supervised by Uganda Retirement Benefits Regulatory Authority. Social security contributions for those aged 50 and for the company to remit contributions for the rest; Repatriation costs to workers’ places of origin or new abode; Accumulated allowances for night duty per diem and fuel; Long service financial awards to long serving workers; It would like a negotiated severance pay or gratuity determined at three months’ pay per year of service in Orange. construction is expected to cost Tsh2.8 billion ($2 million). The project has so for employed 170 people but will employ upto 270 when complete. “The port will handle about two million tonnes of cargo every year,” he said. Cutting costs Last year, the firm handled over 1.6 million tonnes of cargo, which is over 10 per cent of the 14 million tonnes handled by Dar es Salaam port in that year. According to Mr Kok, taking cargo to Kisarawe dry port and then through Kibaha by truck and onwards to the hinterland will reduce transportation time and costs. Mr Kok also said that his compa- ny is in talks with Tazara officials to work out a deal to have cargo from Kisarawe hauled by rail to neighbouring landlocked countries to further reduce freight charges. Tazara has a capacity of trans- porting five million tonnes of cargo per annum, but handles less than 400,000 tonnes due to poor infrastructure and financial problems. Mr Kok said that the dry port will handle various bulk items such as cars, fertiliser, and related cargo. Insu≥e≥s o≠e≥ cove≥ fo≥ political, te≥≥o≥ism ≥isks but no take≥s By HALIMA ABDALLAH Special Correspondent UGANDA INSURERS could soon cover political and terrorism risks in their policies. At its meeting last month, the Association of Uganda Insurers said that interested members can offer the cover to help businesses remain afloat after major disasters. The terrorism cover forms part of the as- sociation’s 2015 strategy to grow penetration particularly in untapped markets. The risk will be covered under the Political Violence, Terrorism and Sabotage Policy. “The strategy is to educate the public that these covers are available and to encourage them to take them out so that when such a situation occurs, the insurance company is in a position to manage the losses that would arise,” said the association’s chief executive, Miriam Magala. Terrorism is a global phenomenon that is fast spreading in East Africa. With the exception of Burundi, all other East African countries have experienced terrorist attacks, with Kenya and Somalia shouldering the biggest burden in terms of frequency and magnitude. Three weeks ago, over 150 university stu- dents were massacred in Kenya when Al Shabaab terrorists attacked the Garissa University College in Garissa, 200km northeast of Nairobi. Even so, the regulator, the Insurance Regu- latory Authority (IRA) said that the demand for the cover is low. “We have not seen such cover come up for approval, but as regulators we ask players to be innovative,” said Mariam Nalunkuuma, IRA spokesperson. In spite of the optimism, the industry is caught in a dilemma: While it is an opportunity for the industry to penetrate the market, it comes with the risk of enormous claims that can cripple it. “There will be an adjustment to premium. We shall also consider what losses should be covered,” said Magala. However, she Miriam Magala Picture: File added, the amount to be paid would be subject to approval by the regulator. It is also expected that insurance compa- nies will continue to receive support for reinsurance from the Africa Trade and Insurance Agency (ATI) to provide reinsurance for terrorism covers. Already ATI has been providing reinsur- ance services to companies in respect to political violence risks, especially for traders. This helps to strengthen the capacities of insurers to pay. Impact of terror Before the September 11, 2001 terrorist at- tacks in the US, standard commercial insurance policies included terrorism coverage as part of the package, effectively free of charge. Today, terrorism, coverage is generally offered separately at a price that better reflects the current risk. The impact of the terrorist attack of Sep- tember 11, 2001 for example was substantial — producing insured losses of about $39.4 billion according to the Insurance Information Institute. Losses were paid out across many different lines of insurance, including property, business, interruption, aviation, workers’ compensation, life and liability.
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