GIPF pulled into Shoprite-AR brawl
Whether by design or by default, AR’s planned shutdown of Shoprite stores directly affects the GIPF, with whom the pressure group has been bickering for weeks.
14 January 2021 | Labour
The Government Institutions Pensions Fund (GIPF) could suffer collateral damage from the shutdown of Shoprite stores, planned by the Affirmative Repositioning (AR) movement for today.
AR - which for weeks has been a thorn in the flesh of the national pension fund, calling for fund members to gain access to their pensions before retirement, is now threatening to derail operations of the multinational retail giant, in which the pension fund is a 1.07% shareholder.
The Namibia Food and Allied Workers Union (Nafau) has successfully sued Shoprite after the High Court ruled in favour of the union’s demands last week. AR joined the fray later, saying the retail giant must comply with the demands or face a national shutdown.
Financial experts fear the planned shutdown might adversely impact Shoprite’s share price on the markets, subsequently pushing down the value of GIPF’s shares.
According to Shoprite’s 2020 integrated annual report, the GIPF is among the 15 beneficial shareholders that hold more than 1% in the group.
As of midday yesterday, Shoprite boasted a market capitalisation of N$79 billion. The GIPF’s shareholding translates into just over N$84 million in monetary terms.
‘Put the matter to bed’
Economist Salomo Hei, the managing director of the High Economic Intelligence Research Agency, said Shoprite should work on swiftly finding a solution to end the stand-off with its employees.
“Markets respond negatively to negative sentiments and it is therefore in the interest of Shoprite to put this matter to bed as quick as possible. With workers claiming that they are being mistreated, shareholders could be the most affected,” he said.
AR is hell-bent on forcing the retail giant to succumb to workers’ demands, which include higher pay and increased benefits. Most who work on contract claim they receive a salary of N$1 200 per month and have to spend up to N$750 on transportation alone.
The movement will today lead a shutdown campaign aimed at closing the doors of the retail giant.
AR spokesperson Simon Amunime this week called on the movement’s activists to shut down Shoprite stores across the country if the company “does not start negotiating in good faith”.
Shoprite Holdings currently has 95 corporate stores in Namibia.
While confirming industrial action at some the Shoprite and Checkers supermarkets by Nafau, the group said it is doing everything in its power to protect jobs.
Questioned about the potential impact the planned AR shutdown might have on its share price and operations, a group spokesperson said it is a priority for Shoprite to resolve the matter through the appropriate channels and in the interest of all parties.
The spokesperson added that it is an accepted retail practice to employ seasonal workers during peak periods, including the festive season, Easter and other peak times throughout the year.
Shoprite employed some casual workers on 15 December 2020 to assist at its shops during the festive season. Their contracts end tomorrow, 15 January.
Last Friday, the High Court ruled that Shoprite should not recruit any new persons to replace the striking workers.
The group said it has a long-standing view that all workers are entitled to reasonable and decent working conditions and it believes that it offers market-related salaries, adding that contingency plans are in place to continue trading in most stores with minimal disruption to customers where possible.
“Dealings with our employees are always on the principles of fairness and respect and in compliance with the provisions of prevailing labour legislation,” Shoprite told Namibian Sun.
While the AR-led shutdown comes at a time when the pressure group is entangled in a pension fight with GIPF, the fund’s CEO David Nuyoma said a shutdown will not be in the interest of anyone because jobs will be jeopardised.
“It is our wish that a negotiated settlement that benefits both parties is found. We also hope that Shoprite demonstrates good corporate citizenship as per the country’s labour laws and that they have the ability to address these types of challenges,” he said during a telephonic interview.
Nuyoma said although the GIPF’s investment is at a group level, bickering at lower levels cannot be ignored.
“Shoprite has a network of stores across Africa and, therefore, if any enterprise in the group is jeopardised, it will be felt across the group,” he said.