Diageo, Union standoff over 30pc proposed layoff

ETHIOPIA – Diageo Plc, a UK based company, has faced resistance from both the labour union and the Federation for Beverage, Tobacco & Allied Trade Unions, after Meta Abo Brewery’s proposal to layoff close to 30pc of its staff.

Close to 200 employees are set to their jobs out of the more than 600.

This is the fourth time the company has presented plans for mass redundancies over the past five years. Starting from 2014, the company has started to lay off its workers.

From August to September 2014, Meta sacked 314 employees in two rounds. Again, for the third time it has now added 22 to that list.

Those who left the company received a minimum of 19 months’ salary and more as compensation.

The letter sent to the Federation ten days ago lists over ten points, justifying its move to cut its employee numbers.

Among the many included are the need to upgrade the performance of the workers and assign the right staff.

“What we tabled is just a proposal for further discussion with the concerned bodies,” reads the general written response of the company sent to Fortune.

“We are implementing the cautiously crafted strategy that dictates structural and organisational changes,” it went on.

The Federation, on the other hand, is very clear on its stance to reject the tabled proposal.

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The Federation was not willing to disclose the content of its response.

“This is a move that is calculated to manipulate the legal lacunae on accountability, and we have seen so many employers using it,” said a source close to the issue.

Any event that entails the direct or permanent cessation of worker activities may entail a reduction of the workers, according to article 28 of the labour proclamation. Moreover, the introduction of new technologies may also be a cause.

The source he further justifies his stance, calling the move unfair, referring to the recent employment of expatriates.

“What we have now is many expatriates from different countries with a high payment,” said the source. “But so far no success is registered in its role in the brewing industry.”

The report by Diageo, as of June 2016, stated that there was a slight decline in Meta throughout the year. The company has the potential to produce 1.1 million hectolitres of beer annually in Ethiopia.

It was in 2011 that Diageo, a global giant in the brewing industry, acquired the years old Meta Abo Beer – a government owned factory since its establishment in 1967.

It was in June 1967 that Meta started its production, which was commissioned by the Italian company, Fred Barbry.

Then, the company took over the administration of close to 771 permanent human resource at a total cost of 225 million dollars – the highest offer for a government enterprise until being beaten by JIT’s offer for the National Tobacco monopoly.

Diageo, in addition to its beer brands in Ethiopia, such as Meta and Zemen, it is internationally known as the owner of renowned premium drinks, such as Johnnie Walker, Crown Royal, Smirnoff and Guinness.

The case by workers, in addition to the federation, has also gone to the Oromia Regional State Social & Labour Affairs Office and the Ministry of Social & Labour Affairs.

August 23, 2016; http://addisfortune.net/articles/diageo-union-standoff-over-30pc-proposed-layoff/

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