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Legal opinion dismisses PTC staff on severance pay

Employees of Peoples Trading Centre (PTC) Limited face an uphill battle in their push for severance pay as legal opinions indicate that they are not eligible while still in employment.

The employees are fighting for the payout after conglomerate Press Corporation plc sold its 100 percent stake in PTC to a South Africa-based trading company Tafika Holdings Limited (THL).

On Monday, the employees of the struggling retail chain store staged protests at the company’s head office in Blantyre seeking clarification from management on the disposal of the PCL subsidiary to THL. The employees are demanding severance pay and pension benefits.

But a legal opinion dated March 22 2022 which PTC management sought on the matter dismisses the employees’ position, arguing they have no basis under the law as guided by the country’s Employment Act.

PTC staff in Blantyre during a strike on Monday

The opinion said the Act in Section 32 provides two scenarios when severance allowance is payable, which are termination of a contract of employment or unfair dismissal of an employee by the employer.

The opinion further states that termination of a contract of employment could be through redundancy, retrenchment or due to economic difficulties. It could also be as a result of technical, structural or operational requirements of the employer.

“The provision categorically states that these are the only circumstances where severance allowance is payable. In the circumstances at hand, none of the scenarios covered by the Act has happened.

“It can, therefore, only be concluded that no scenario has occurred to trigger the payment of severance allowance,” reads part of the legal document titled ‘Legal Opinion on Claim for Severance Pay by PTC Members of Staff on Acquisition of the Undertaking by Tafika Holdings Limited’.

In an interview yesterday, PTC chief executive officer Ferdinand Mchacha confirmed seeking the legal opinion following the employees’ demands to be paid the allowances.

He said: “At the moment we are waiting for the company’s workers union to advise us when we can meet and discuss the matter with them.

Labour law expert Allan Muhome agreed with the legal opinion yesterday, saying there was no need for PTC employees to demand severance because all the workers are still in employment.

He said: “No contract has been terminated and no one has been unfairly dismissed. Section 32 [of the Employment Act] states that when a business is sold employees go with the business unless otherwise stated.

The move to dispose of PTC, which was registered in 1973, comes on the back of poor performance which has led to lack of capital for it to smoothly run its operations in the country.

In 2016, PTC closed 20 of its 85 shops nationwide due to poor performance before unveiling an opportunity to local entrepreneurs later to operate the closed shops.

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