How A Wage Spat Caused Govt. To Back A Shoprite Boycott In Namibia

From Windhoek comes the story that Africa’s biggest retail chain, Shoprite Holdings, is in the middle of a spat with basically everyone, including the government of Namibia, apparently.

The summary of the story is that the Namibian government has lent its voice in support of a boycott of Shoprite as a way of forcing the hand of the retailer in a matter involving employee benefits.

For four weeks and counting, Shoprite’s employees in Namibia have been on strike. According to Reuters, more than 2,000 Shoprite workers led by the Namibian Food and Allied Workers Union (NAFU) have been on strike since December 23 demanding better salaries and working conditions.

The workers are demanding a salary increase of six hundred Namibian-dollar (NAD 600.00 or USD 40.34), a housing allowance of NAD 450.00 (USD 30.22), a transport allowance of NAD 500.00 (USD 33.58), and permanent employment for temporary workers who have been with the retailer for over a year.

Since the strike took effect, NAFU has made it part of its mandate to dissuade local consumers from buying from Shoprite and its subsidiaries until the labour dispute is settled. And on Wednesday, January 20, government authorities revealed their stance on the matter, and it wasn’t exactly neutral.

“By now, it is public knowledge that the union (NAFU) has been asking the public and other consumers not to buy from Shoprite and its subsidiaries until the strike/dispute is resolved. The ministry supports this position,” Labour Minister Utoni Nujoma said in a statement issued yesterday.

It is mostly unacknowledged but Namibia happens to be one of Shoprite’s biggest markets outside of South Africa. In Namibia, Shoprite employs a total of 4,300 people across all of its 18 locations and generates up to USD 449 Mn in annual sales, according to some sources.

The Southern African country is one of the foremost grounds for the retail chain. Shoprite first arrived in Namibia in 1990 and is currently listed on the Namibian Stock Exchange. In Namibia, Shoprite owns retail stores such as Shoprite Checkers, Shoprite Stores, OK Foods, Hungry Lion, and Usave.

As per the current squabble, it’s been reported in the local media that Shoprite has stuck to its initial proposal to give workers between 5 percent and 10 percent wage increments without other benefits such as housing and transport allowances.

It is understood that full-time workers at Shoprite earn between NAD 1.2 K (USD 80.59) and NAD 2.5 K (167.89) per month. Labour Minister, Nujoma, says this is especially low compared to the average wage of Namibian workers, which is slightly above NAD 6 K (USD 402.94).

There are also concerns in Namibia over the company’s insistence on employing a large number of casual workers whose wages can be as little as half of those on permanent contracts.

To buttress this point, Reuters claims to have obtained court documents which show that most striking employees have temporary contracts, some for extended periods of up to more than 10 years and earning between NAD 300.00 (USD 20.15) and NAD 400.00 (USD 26.86) per week.

Negotiations have been fraught with various maladies since the industrial action took effect.

“Neither I as minister nor the government is oblivious to the problematic developments surrounding the strike, which may well call into question whether the company is bargaining in good faith or acting unlawfully,” Nujoma said.

The minister said he had been informed that Shoprite is now considering another illegal strategy to fight the union.

There are claims that the company has, in the past, fired hundreds of workers who went on strike over issues such as casual employment, extremely low wages, and refusal by the employer to remit trade union dues.

“A form is being circulated by Shoprite’s directors among workers asking each employee to sign an undertaking to: a) abandon the strike and, b) end the workers’ mandate to NAFU to represent them in collective bargaining. … the employee could then be dismissed for rejoining the strike. This is blatantly illegal,” he said. The minister also mentioned he would intervene in the dispute to “reach an amicable solution.”

It won’t be the first time Shoprite is running into troubles like this in Namibia but this particular episode has garnered a lot of attention especially after the company allegedly refused to comply with orders from the Labour Court.

Overall, it’s been a torrid last few years for Shoprite outside of its home country, South Africa. The company has run into several difficulties that have forced it to increasingly retreat or consider retreating from markets outside its homeland.

For instance, Shoprite has since withdrawn from Kenya and is considering selling off its Nigerian subsidiary after running into myriad economic and political problems. And now, Shoprite seems to have run into fresh trouble in Namibia with competitors like Spar and Sentra smelling blood.

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