As South Africa finds itself in the stranglehold of an economic recession, Kaya FM has sent notice of contemplated retrenchment to its staff members in terms of Section 189 (3) of the Labour Relations Act 66 of 1995 (as amended)!
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On Monday first consultation with those affected started from 09:00 and 10:00 (CAT).
In the letter seen by MGOSI.co.za Kaya FM’s Greg Maloka said that it was with regret that they hereby notify staff that the company is contemplating embarking upon a retrenchment process which may lead to the possible dismissal of a number of employees.
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“It is necessary in such circumstances to consult with the employees regarding the possible retrenchments, on issues as detailed below. We wish to confirm that none of these issues have been finally determined. The company‘s final decision would depend on such representations you may make,” reads the notice issued by Greg Maloka.
Greg Maloka wrote that it is unclear to Kaya FM, based on the information at their disposal when the deterioration of the South African economy will cease in the foreseeable future.
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“At this juncture, the company must accept, based on the information available to it, that the South African economy may not recuperate, and may even deteriorate further, in the foreseeable future,” reads parts of the notice.
Kaya FM told staff members that it can unfortunately no longer ignore the fact that it, like all South African businesses, will not be immune to the prejudicial impact of the deteriorating and uncertain economic environment within which it operates.
“The company must, in addition to the above mentioned macro-economic factors, be mindful of the interests of its shareholders in two respects.
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“Firstly, it must ensure that the shareholders generate sufficient profits to service its loan account with the bank that it utilised to fund the purchase of its shares of the company. As things stand, the shareholders will default on their loan obligations with the bank because it is unable to service the loan within the agreed-upon repayment period.
“Secondly, it must ensure that the shareholders receive its desired return on investment in the short to long term.
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“The application of sound principles of financial management demanded that the company considered restructuring its business and so doing to declare a number of position redundant with the aim of cutting costs to allow the company to generate sufficient cash flow reserves to remain sustainable in the short to long term with due regard to the aforementioned challenges,” reads the notice.
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Greg Maloka further told staff members that Kaya FM does not envisage that there will be any alternatives to retrenchment but undertakes to consider any proposed alternatives that staff members may table during the consultations process.
MGOSI.co.za