First Capital blames fee cuts for retrenchments

Pension fund manager First Capital has been forced to retrench five of its employees because of a 50% management fee reduction paid to it by one of its big clients, its CEO Martin Mwinga says.

This follows claims that the company was targeting employees who had joined the Namibia Financial Institutions Union to fight for better pay and working conditions.

Last month, the company issued a notice of retrenchment to at least five employees.

One of the retrenchment notices stated that “the company is anticipating retrenchments due to a reduction of the business for economic reasons”.

A meeting is scheduled for this Friday with the affected employees and their recognised trade unions for negotiations around any alternatives to dismissals, criteria for selecting employees for dismissal, dismissal conditions and severance packages.

Retrenchments will be effected on 15 April.

‘We had no choice’

One of First Capital’s biggest clients is the Government Institutions Pension Fund (GIPF). First Capital provides mortgage loan facilities for civil servants.

Reacting to the claims, Mwinga said First Capital had been informed last year that one of its clients would be reducing its fees.

“We are affected like any other company. At the moment we have one big client and the client informed us that the management fee will be reduced by 50%, the fee that they paid to us. We had hoped to attract a big client but couldn’t. We had no choice but to cut costs.

“Some positions became redundant,” he said.

Mwinga denied claims that workers affected by the retrenchments had raised grievances regarding low salaries and countered that First Capital had given its staff members salary increases during the lockdown brought on by the Covid-19 pandemic.

“We gave increases during Covid. We never received letters of demand of salary increments. We never had any complaints or grievances. We never had quarrels with staff,” he said.

Unfounded

According to him, First Capital staff members were informed that the company would consider making non-critical positions redundant if it were unable to secure a big client to fill the gap in management fees it would lose.

He dismissed the notion that employees who had been singled out for retrenchments were being cut loose from the company because they joined labour unions.

“We prepared employees that retrenchments may be coming. That claim is unfounded. We were trying by all means to see if we can turn the situation around. We are not dumping them; we had to cut those positions non-critical to business,” he said.

Two managers who had not signed up for membership with the union had also been affected, Mwinga added.

The Namibia Financial Institutions Union has in the meantime called on First Capital not to proceed with the planned layoffs, saying the company was not following the spirit of the Labour Act.

“We wish to bring to your attention that the process followed to date was not in line with the spirit, purport and objects of the Labour Act as you were obliged to negotiate with the recognised union in good faith on alternatives to dismissals, how to minimise dismissal, the conditions on which dismissals are to take place and how to avert the adverse effects of the dismissals,” its secretary general Asnath Zamuee said.

Hostile

When asked what the way forward was, Zamuee said a meeting would take place this week.

According to her, the company was yet to explain the criteria used to select the targeted employees affected by the retrenchments, that the selected employees were targeted because they had raised internal grievances and were vocal about pay conditions and that First Capital was hostile to its employees taking up membership with the union.

“The employer was hostile, did not want the union on its premises and we had to meet under trees. It affected the most vocal employees,” she said.