200 sacked employees of Indian firm threaten showdown with employers

The employees say the Indians told them that they don’t have a government and they (employers) can do whatever they want.

About 200 employees of European Soap and Detergent Limited, an Indian-owned manufacturing company in Lagos, who accused the management of unjust termination of their employment, have threatened to “deal” with their employers.

The workers, whose employment was terminated on May 20, demanded that their entitlements be paid, and their letter of disengagement changed from ‘termination’ to ‘redundancy.’

The furious employees said that the Indian owners of the company, including some Nigerian top staff, “assured” them that “we don’t have a government and they can do whatever they want.”

Kingsley Allen, a spokesperson for the workers, said that they began to notice delays in their salaries in 2013.

“We sensed there was problem, but the products were moving, in fact customers were depositing money to them even when they have not gotten the product,” said Mr. Allen, who worked in the Internal Audit department.

“When we sensed what was going on, we went to the management and asked them what was going on and they said they have some financial challenges and are trying to bring in more investors.

“But meanwhile, they have actually looted the funds of this company. The board of directors recently were asking the chairman, the Indian who is the owner of the company, to return N1.8 billion. And because this issue has been lingering, the chairman of the board of directors, Mr. Oboh, resigned.

“So many of us couldn’t cope, so we decided to resign. And then the MD, who is the son of the owner of the company, Suren Mirchandani, came to us and begged us to stay as they are trying to resolve the matter. And then staff stayed,” said Mr. Allen.

However, three weeks ago, the management announced to hapless employees that they could no longer continue running the business due to financial problems.

But instead of disengaging the workers by retrenchment, the company chose the cheaper route and issued them letters of termination of employment.

In their notice of termination dated May 20, 2014, and pasted on the company’s gate at the Amuwo Odofin Industrial Estate, the company stated that the termination was with immediate effect.

“The affected staff is therefore advised to collect their letters from Human Resources Department,” the notice added, and proceeded to list the names of all 197 staff.

A second notice, dated the same day, listed the names of five employees to be allowed into the company premises as staff representatives to negotiate with management.

“The staff said they cannot accept termination because it will damage the image of the staff before other employers. Also, they will use that opportunity to deprive the staff of their full benefits,” said Mr. Allen, who was among the staff representatives at the negotiation.

“We told them all these, that we cannot even accept termination because we had not committed any offence,” he added.

At the negotiation, the staff representatives said that they insisted that the 15 months pension, deducted from their salaries, be remitted to the Pension Fund Administrators. The staff also demanded their full severance benefits as well as changing their letters of termination to “what it is supposed to be.”

While the company management agreed to remit the pensions and pay the staff their entitlement, although both of them in four instalments; they stuck to their guns on the termination letters, insisting they would not change it, the workers told PREMIUM TIMES.

Suddenly, the company’s position at the negotiation changed – in addition to refusing to change the ‘termination’ in their letters of disengagement, the management decided they would now pay the entitlements in six instalments, or in four instalments for staff who agree to forfeit 50 per cent of their benefits.

200 sacked employees of Indian company2

The negotiations broke down.

“We even understand that from what they have computed for some of the junior workers (who earn about N30,000 monthly), some are going to go home with N7,000. And this is what they are going to pay six times? You can imagine these kinds of human beings,” Mr. Allen said.

“In negotiations, they (the Indians) were telling us we don’t have a government. Even the Chief Accountant, Reverend Oritsetoye Adebowale, whom they were using to negotiate with us, was saying the same thing.

“We are still calling on the (Governor) Fashola, the House of Assembly, Tambuwal and others. Indians cannot say we don’t have a government and they can do what they want to do once they have the money,” Mr. Allen said.

PREMIUM TIMES learnt that three companies – Texlon Limited; Diamond Spinner; and European Personal Care Ltd – run by B.K Mirchandani, the Chairman, and Suren Mirchandani, his son, had been closed in the past under similar circumstances.

According to the employees’ handbook seen by PREMIUM TIMES, the appointment of an employee may be terminated if within any period of twelve months he has been found guilty on three occasions of committing any offence for which the company applied sanctions.

“Termination of employee resulting from (a) above shall be subject to notice in writing to the affected employee with one month salary or wages in lieu of notice,” stated the handbook which was given to all the workers at the start of their employment.

“In event of termination of employee’s, all his outstanding account and/or his loans with the company shall fall due for immediate payment,” it added.

Nehemiah Ogala, an employee, said that his benefits totalled N150,000.

“So what will I be getting if they are going to pay me six times. It’s unfair,” said Mr. Ogala, who was a supervisor for casual workers in the company.

“Our casuals were robbed too. They promised to come and vandalize here but they brought police, they saw police with gun, they shot in the air and they all ran away.

“They brought the police since last week and have been giving them N150,000 each day. The auditor is here, he can tell you what is in the system,” Mr. Ogala, Who worked for six years in the company, said.

The company’s response

Phone calls to Suren Mirchandani did not go through as his line was unavailable.

But in defence of the company’s position, Mr. Adebowale admitted that they were going through a “financial stress.”

“For six months, without producing, the company has been struggling to pay salaries,” Mr. Adebowale told PREMIUM TIMES over the phone.

Mr. Adebowale said that the company was in the “capital raising process” which would take another three months to conclude.

“The people cannot remain in the company for three months without salary. You can’t ask them to come to work without pay, when the owners said they don’t have the capacity.

“So the decision was, pay them off and in three months, call them back. In some other places, it could be seen as a kind of leave. But the staff would not cooperate,” Mr. Adebowale said.

The company’s Chief Accountant further stated that to show the company’s sincere intention, the heads of the various units were not asked to leave, so they could easily recall their team members after three months.

“The bone of contention is because the people said they want their termination changed to redundancy and the company said it is not redundancy. That is the problem. They refused to take their termination letters,” said Mr. Adebowale.

“While negotiations were still going on, the people were violence prone. When some of them were carrying objects, the company said since they refused their letters and behave like this, lock the gates, let them stay out. Anybody that wants to collect his letter will be let in.”

Mr. Adebowale also said that restructuring and recapitalization is a normal thing in business.

“Dispute is resolved by dialogue. If the violence is there, how do we move forward?

“We asked them, can we have a Memorandum of Understanding? If the management decides to use other terms apart from termination, will you accept a severance based on termination?

“That is their problem. Because what goes with termination is different from that of redundancy,” Mr. Adebowale said.

On the claims of the company’s management telling the workers “their government cannot do anything,” Mr. Adebowale said that “it is not true.”

“Nobody ever said that. Nobody will undermine the government of the land.

“The people were the ones raining insulting words on us. If you go to my Facebook, you’ll see all sorts of insulting words on my personality. Did I employ them? They are taking it very personal, which is unfortunate.

“We are the ones talking to them on one side and talking to the management on the other side, to try to strike a balance. The management keep saying ‘We don’t have the money.’ How do I make the commitment.”

For the past one week, dozens of irate workers have continued to converge outside the company gates brandishing placards and tree branches and banging on the iron gates.

Mr. Adebowale said that he had been unable to go to work since last Friday due to the “violence prone” workers.

He also declined to comment on the alleged N1.8 billion fraud by B.K Mirchandani, the company’s Chairman.

“Those things they are mentioning, I wouldn’t want to comment on that. The shareholders have the analysis of the account. I wouldn’t want to delve into that,” Mr. Adebowale said.

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