More than 2 000 Zambian workers have been left in the lurch as the South African franchise shop Supreme Furnishers was liquidated by a Lusaka High Court this week.
The court order scuttles the government’s opposition for Supreme Furnishers, with its subsidiary companies Barnetts and Hifi Electrical, to cease operations in Zambia. Lawyer for the workers Mark Haimbe has asked the court to make an order for all employees to be paid their terminal benefits in full.
The courts have now blocked the company from moving or transferring any assets or cash to South Africa, in an attempt to force it to pay workers their terminal benefits.
Durite Chella, a shop attendant, believes workers are being treated this way because the majority of them are unskilled.
“Would they have treated us this way if we had [college or university] degrees? It is because the majority of us are attendants and do not have formal qualifications, that’s why they throw us in the streets,” she says.
Supreme Furnishers and its subsidiaries have more than 10 outlets in Zambia.
Labour Minister Patrick Kafumukache expressed shock at the investor’s decision to pull out of Zambia at such short notice and without paying workers their full benefits. His Deputy Minister, Chile Ng’uni, described the liquidation as “fallacious” and “contemptuous”.
Ng’uni said workers had exhibited the most decent behaviour for the seven months the company was in limbo, sacrificing in the face of doom, banking the company’s takings, kept property and used the due process of law to resolve the matter, only to receive a kick in the face.
“Workers should not despair because government is not going to allow Zambians to be abused.”
Assuring words, but they have only earned the ire of workers.
“How can the ministers now say they are shocked when it is them that award these licenses to these opportunists — with no exit clause, nothing to protect workers?” asked Leah Numutenga, one of the workers.
She said workers had been faithfully working for the company since its inception and to be treated in this manner with no protection from the government was similar to living in the pre-independence days when natives were abused.
“This thing about Supreme Furnishers closing is not new. It was on the cards as soon as we knew their five-year grace period for paying tax was over. And we were diligently telling government to beware.
“Now that it has happened, the government has taken no action apart from saying they should give us our terminal benefits. What happens when those benefits finish? Where do we get jobs? We have to feed our families,” said Joseph Phiri, another worker.
Supreme Furnishers is the third South African franchise to close down after the expiry of its tax grace period. Smart Centre, a clothing company, turned into another company, Duns, and then closed last year.
Food chains Quick Save and Pie City also closed down two years ago. All eyes are on Shoprite, a huge department store, whose management changed hands, but after huge protests, the new administration was forced to keep on all the workers.
Ng’uni said the closure of South African businesses in Zambia was a consequence of post-privatisation challenges that needed urgent solutions. He said the decision to privatise and open Zambia’s markets were a good idea but “perhaps we were too gullible, desperate or maybe somebody was profiteering from the exercise, but its handling has been a shambles”.
Barnetts manager Andrew Chella said the government should not start looking for excuses because it had been folding its arms while Supreme Furnishers began closing its shops countrywide last month.
“This company has been running without a board of directors. We have done everything by the law but they have issued instructions from South Africa and we are now thrown on the streets. This is arrogance,” he said.
So incensed have the workers been that they marched to former Zambian president Kenneth Kaunda’s house and presented him with a petition in the hope that he could intervene on their behalf as a world-famous statesman. The workers begged Kaunda to lobby support on their behalf with the international community.
Kaunda said it was criminal for the investor to abandon its workers in that manner. He advised the workers to approach the Zambian government through the minister of labour and foreign affairs because the matter needed the intervention of the South African government.
He also advised President Levi Mwanawasa to speak with his South African counterpart, President Thabo Mbeki, over the issue.
South African high commissioner to Zambia Reddy Mampane said his office had formed a business association to monitor the activities of South African-based investors in Zambia, because he too was not happy that investors fled when their tax rebate period expired.
Supreme Furnishers lawyers Corpus Globe argue that the firm was heavily indebted and refused to comment further.
When the Zambian government began privatising and opening up the country for investment in 1993, it offered, as an incentive, a tax-free grace period of five years.
Franchises such as Shoprite, Game, Woolworths and Peps and other food chains flooded the country. After the initial grace period was over, some of the companies either closed down completely or were sold to other investors who were due for another five-year grace period.
Opposition parties have always warned that there was not enough in the investment act to guarantee workers’ rights or an exit clause that would safeguard the interests of the country.
Commerce Minister Dipak Patel says the government needs to rethink its investment policy and make it more Zambia-friendly.
“Our hands are tied because we appeared to have set ourselves up for a fall. We have to scrutinise this policy again,” said Patel. — IPS