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BNC in messy restart crisis

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Bindura Nickel Corporation (BNC) employees on Thursday took the resources company to court, challenging the termination of their employment contracts through forced but unfunded retirements, nearly two years after the country’s sole primary nickel producer shut down its mining operations.

The case, filed at the Labour Court in Bindura by about 30 employees, extended the catalogue of BNC’s long-drawn-out and ever-multiplying labour disputes springing up from its decision to place Trojan Mine, Bindura Smelter and Refinery and Shangani Mine on care and maintenance in December 2008 and from a failed retrenchment bid the following year.

Since then BNC, in which AIM-listed Mwana Africa has a controlling interest, has struggled to offload the redundant workers, who numbered an estimated 2 700 employees at the time it shut down the operations, and in so doing, has sparked numerous labour cases that now threaten to stall its restart plan.

The miner is understood to have made several fruitless attempts in the last two months to pressure the company’s worker leadership into signing a new labour accord, which would enable it to review and amend employment contracts ahead of its restart programme, scheduled to start with Trojan Mine.

In August, BNC announced it had completed a pre-opening Competent Person’s Report (CPR) for Trojan Mine and opened negotiations with potential financiers to sign off-taker deals.

To restart all the three mining operations, BNC says it must raise approximately $100 million and commit at least $65 million of this to Trojan.

The CPR, compiled by SRK Consulting (UK) Ltd, confirmed that Trojan’s mineral resource runs at 3,5 million tonnes of ore with a mean grade of 1,29% Ni and with potential to increase at depth.

In its trading update on August 10, Mwana Africa disclosed that SRK’s CPR review had glossed over outstanding financial liabilities to creditors and the protracted labour conflict, both of which require quite significant funding commitments, which may weigh on and probably hold up the scheduled restart programme.

“Additional aspects of the Trojan restart programme, including reaching settlement with remaining creditors, and reassessment of staffing levels, for which additional investment will be required, have not been reviewed by SRK,” reads, the update.

In an interview on Friday, national representative of the Associated Mining Workers’ Union, Frank Muvhevhi, confirmed the latest labour dispute and explained the issue started in October last year when BNC revived its failed retrenchment bid, starting with those about to attain 60 years ahead of its restart programme.

He said the company had also tabled a new offer for those willing to consider voluntary retrenchment/retirement, which comprises nothing more than a three-month notice salary and cash for outstanding leave days.

The notification of the forced and unfunded retirements — in the form of a retirement agreement form — was first publicly circulated on October 30 last year and contains six blank spaces where the name of the retiree is inserted as well his/her date of birth, retirement date, retirement notice period and the termination salary.

“Please take note that the company shall pay you as soon as funds are available,” reads part of the form, which ends by asking the retiree to consent to the forced retirement through the clause: “I …., do hereby consent to my retirement from BNC Limited on the grounds of a normal retirement.”

Muvhevhi said BNC was retiring the employees on a three-month notice salary of $300 ($100 x 3 months) without service salaries and confirmed the “first victims” of the forced and unfunded retirement have challenged the “unfair labour practice” in court.

“As worker leadership we have said no to that. Retrenchments should be fairly funded and due benefits should be paid,” Muvhevhi said.

“People cannot leave the mine with $300 after working for 30-40 years. That is ruthless and it’s our biggest concern as worker leadership. Management has compiled a list containing the date of birth of every worker. On reaching your retirement date, which is 60 years, you are being retired without benefits.

“Yet, the people being retired are the very people who were supposed to benefit from the retrenchments.
At that time (April 2009), they had not yet reached their retirement age. The company decided to stop the retrenchments because they didn’t want to pay packages to these people because they had many years of service.

“Now they have decided the best thing is to force them into retirement during care and maintenance so that they don’t pay anything.

“Our argument is that the retirements must be funded fairly and service salaries paid. We want them to be done properly after the restart programme.”

Muvhevhi said the forced and unfunded retrenchments/retirements could eliminate a sizeable number of BNC employees by the time the mining operations come back on stream, as the average age of the company’s employees is about 40.

He added that BNC in August also proposed a new reengagement accord known as “Works Council Agreement between Parties to BNC Joint Consultative Council” presented as a BNC “remodelling” plan, under which it hopes to develop new employment contracts by the time it restarts operations, if the worker leadership signs.

According to Muvhevhi, the proposed production/employment pact is abstracted from Australia, Canada and New Zealand legislations and basically seeks to “casualise labour” by introducing closed contract periods and “sweating systems.”

He contends that is almost equal to signing “new contracts”, in violation of BNC’s undertaking when it reversed its retrenchment bid in May last year.

Under the accord, the worker leadership is being asked to bind itself to the following conditions:

Introduction of “long-hour shifts” of 10-12 hours a day;
Timeline for the agreement;

Change in the “cope or content” jobs by adopting a multi-skilling and multi-tasking approach under which every job (employee) would go through re-regrading;

Offloading of excess labour.

“We have been negotiating on the proposed agreement since March this year. Workers demanded at least three benchmark visits to other mines to see if the system was being implemented anywhere in Zimbabwe,” Muvhevhi said.

“We visited Zimplats, Unki and Mimosa (mines) and found out that the system is not being implemented anywhere in Zimbabwe. It’s a notorious system.”

Muvhevhi claims the new accord would eliminate about 9 000 employees and achieve the same objective as unfunded retrenchments. In the proposed agreement, BNC suggests that it will consider “various legal options” to take care of the excess labour.

“It is recognised that the remodelled business may result in excess labour. To this end, the employer may consider various legal options and stakeholder engagements to manage excess labour.”

The first retrenchment bid flopped on May 21 last year when the nickel extractor withdrew its application to offload 2 229 workers on grounds it could not fund the retrenchment bill and promised to retain every employee without altering employment contracts.

The Labour Ministry had approved the retrenchments on April 9 on the condition that BNC would pay a three-month severance salary, a service pay equal to one and half salary for every year worked, a relocation allowance within 12 months, six months’ post-notice medical aid and a six months’ post-notice funeral allowance, among other terms.

But five days earlier, BNC chief operating officer B Manhando had applied to the mining industry’s National Employment Council (NEC) seeking exemption from meeting its contractual obligations to the workers as well as permission to pay a flat allowance of $40 regardless of grade from February to December 2009.

Twice, the NEC threw out the application allegedly suspecting BNC could use the exemption for retrenchment purposes.

Further, on July 14, Manhando circulated a circular announcing the company had suspended more “benefits and financial assistance” in addition to those withdrawn in November 2008, as it was not “generating any form of revenue” since shutting down in December 2008.

“The company says one thing today and does another tomorrow. It’s quite unfortunate,” Muvhevhi said.

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