283 ex-Admarc staff win compensation case

The Industrial Relations Court (IRC) in Blantyre has faulted Agricultural Development and Marketing Corporation (Admarc) over the manner it fired 3 283 of its staff and has ordered that they be compensated for unfair dismissal.

The court’s decision follows an application by 3 283 former Admarc employees led by Alex Mal ikebu who were dismissed in January last year as part of a restructuring process. The applicants were being represented by lawyer Shepher Mumba.

Delivering his ruling on Monday, IRC vice-chairperson Tamanda Nyimba noted that Admarc had a legal obligation to consult its former employees before effecting the mass terminations of employment.

He also observed that Admarc did not give valid reasons for terminating the contracts, contravening Section 57 (1) of the Employment Act in the process.

Said Nyimba: “To reiterate my pronouncement already rendered herein above, for all I have reasoned, judgement is hereby entered in favour of the applicants.

“I further make an order for compensation for unfair dismissal and for unfair and unsafe labour practices.”

However, he could not indicate how much the State produce trader should pay its former employees, but said the court will later make an assessment.

In its submissions, Admarc through its lawyer Francisco Chikabvumbwa argued that there was no legal obligation for the State produce trader to consult the former employees before effecting the mass terminations of employment.

He said Admarc took the trouble to consult the applicants through staff circulars that were being issued frequently, explaining to the applicants about the impending retrenchment.

C h i k a b v u m b w a further argued that the ex-employees were also consulted through meetings with their Workers Union representatives.

Section 57 (1) of the Employment Act states that “the employment of an employee shall not be terminated by an employer unless there is a valid reason for such the capacity or conduct of the employee or based on the operational requirement of the undertaking”.

And Section 57 (2) of the same Act provides that “the employment of an employee shall not be terminated for reasons connected with his capacity or conduct before the employee is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide the opportunity”.

In January 2023 Admarc fired its entire 4 000-plus staff effective February 1 2023 as part of its restructuring process. In a circular to the employees dated January 30 2023 then Admarc acting general manager Ethel Zilirakhasu said the company was implementing a 100 percent retrenchment and the last working day for all staff was January 31 2023.

Ministry of Agriculture had closed Admarc in September 2022 and sent its entire staff on paid leave to pave the way for restructuring. However, it continued to perform some social services with selected staff members.

The Ministry of Agriculture outlined the conflict between Admarc board of directors and management, leading to poor governance and abuse of company finances and theft by some employees, as some of the factors that influenced the decision. The ministry also cited low productivity by some company employees.