NAC manager challenges scrapped vehicle scheme

A senior Namibia Airports Company (NAC) manager has taken the state-owned enterprise to the Office of the Labour Commissioner, arguing that the abolition of its controversial motor-vehicle scheme resulted in an unlawful change to his employment conditions.

Jason Kweyo, NAC’s manager for fire and rescue at Hosea Kutako International Airport, is challenging a remuneration offer that was N$116 688 below the annual package he says was agreed on during negotiations over the loss of his vehicle benefit.

Documents seen by Namibian Sun show that NAC offered Kweyo an annual total cost-to-company package of N$683 820. Kweyo maintains that the applicable D1 public-sector lower-quartile package was N$800 508.

The dispute was heard before arbitrator Namupala last Friday.

The matter centres on competing calculations of what Kweyo should have received after NAC abolished its vehicle scheme and converted affected employees to a total cost-to-company remuneration structure.

Kweyo had been allocated an Isuzu KB300, originally purchased by NAC for N$500 000 on 21 May 2018.

As part of the restructuring, NAC offered managers and executives the option of having the vehicles in their possession transferred to them, on condition that they would not receive new vehicles under the abolished scheme.

Kweyo says the remuneration package attached to the restructuring did not reflect what had emerged from negotiations with the company.

In a letter dated 17 January 2023, NAC placed Kweyo’s previous annual remuneration at N$620 000.

“It was resolved that the 5% inflationary increase coincides with the total cost to company (TCTC) conversion values proposed by PwC to abolish the car fringe benefit for the said employees,” NAC wrote.

Kweyo, however, contends that a proposal approved by the board following engagements with employees in March 2022 placed the applicable D1 public-sector lower-quartile package at N$800 508 annually.

“According to the offer letter dated 05 August 2022, the board approved the proposal amount N$800 508 per annum D1 NAM Public-Lower Quartile, resulting from the March 2022 engagements with the employer; however, I have identified the offer N$683 820 per annum as being lower than what was proposed,” Kweyo wrote in his summary of the dispute.

The difference between the two figures amounts to N$116 688 a year.

Kweyo further alleged that employees in the higher D3 to D5 grades were offered the amounts that had emerged from the negotiations, while his D1 package fell below the proposed figure.

“D3-D5 were offered what they proposed, which I believe is unfair labour practices,” he wrote.

Kweyo said he would consent to the change in his employment conditions if his package was adjusted to the N$800 508 figure.

“In conclusion I will only consent to a change to my employment term and condition if the total cost to the company will be N$800 508.00 per annum in accordance with the comparable Namibia Public Sector Lower quartile,” he wrote.

Scheme abolished

NAC abolished its Motor Vehicle and Car Scheme Policy in September 2020, moving affected employees, including management, to total cost-to-company packages.

“This communication serves to inform you that in line with the board resolution taken at its meeting held on 23 September 2020, the Motor Vehicle and Car Scheme Policy was abolished, effective 23 September 2020 and all staff members are to be moved to Total Cost to Company (TCTC),” NAC informed Kweyo in an offer dated 5 August 2022.

NAC appointed PricewaterhouseCoopers (PwC) to review its remuneration structure. According to the offer letter, the board approved the PwC study in December 2021 for implementation.

“The outcome of the study and the recommendations were approved by the Board during December 2021 for implementation with effect from 1 April 2022, provided that due consultation processes have taken place with the affected parties,” the letter states.

The study was presented to NAC’s executive committee and management team on 28 January 2022, followed by further engagements with employees from March 2022.

The board subsequently resolved on 30 June 2022 to increase the total cost-to-company values proposed by PwC by 5%, backdated to 1 April 2022.

“Considering the above, I have the pleasure to inform you that the Board resolved at the Board sitting on 30 June 2022 to increase the total cost to company values proposed by PWC to abolish the car fringe benefit with 5% effective 1 April 2022,” the letter states.

The revised offer increased Kweyo’s annual package from N$620 000 to N$683 820, while abolishing his company-car fringe benefit.

“Therefore, this revised offer letter wishes to inform you that your total guaranteed package will be amended as indicated in the table below with effect from 1 April 2022 to abolish the Company Car Fringe Benefit,” NAC wrote.

Kweyo told Namibian Sun yesterday that he had already paid off the vehicle.

“I paid off the car already, using my own salary. I was being deducted 25% of my salary, which was going towards the car instalment,” he said.

Vehicle transfer

As part of the restructuring, NAC’s board resolved to transfer Kweyo’s existing scheme vehicle to him through a loan arrangement.

The company said the loan balance would be reduced monthly in line with the vehicle’s depreciation until it reached a minimum residual value of N$5 000 over the remaining period of his benefit cycle.

“The board resolved at the sitting on 30 June 2022, to transfer your current car scheme vehicle on a loan agreement whereby the loan balance reduces with the monthly asset depreciation value to a minimum asset value of N$5 000 over the remaining period of your current benefit cycle,” the offer reads.

NAC attached a transfer-of-ownership agreement for Kweyo’s signature and instructed him to sign the remuneration-restructuring document.

It warned that failure to accept the proposed changes would trigger a dispute-of-interest process.

“Should you not accept the proposed changes, the issue will be regarded as a dispute of interest and the employer reserves the right to embark upon internal and, if unresolved, external dispute resolution proceedings in terms of the provisions of the Labour Act,” NAC wrote.

Kweyo was given seven days to accept or reject the offer.

His lawyer, Dirk Conradie, responded on 28 November 2022, arguing that the abolition of the vehicle scheme could only apply to employees who had accepted the amended employment conditions.

“Kindly be advised that the abolishment of the Vehicle Scheme and Car Allowance Policy is only valid in respect of employees who were offered and accepted terms that were favourable to them.

“In other words, the change of employment terms is only valid, if accepted by the affected employees,” Conradie wrote.

Minister orders vehicle recovery

The dispute comes amid renewed scrutiny of NAC’s former vehicle scheme.

In July, Works and Transport Minister Veikko Nekundi ordered the company to recover all 19 vehicles from executives and managers.

The vehicles were originally purchased at a combined cost of N$14.7 million.

The labour dispute now places under scrutiny not only the fate of the vehicles, but also whether NAC lawfully altered the remuneration conditions of employees affected by the scheme’s abolition.