Cairns Foods struggles on

One of the country’s leading food manufacturing companies, Cairns Foods Ltd, is struggling to get back on its feet after being placed under judicial management.

A survey carried out by The Zimbabwean indicated that there is no viable production taking place at Cairns Foods factory. The decision to place the company under judicial management was made by Reggie Saruchera of Grant Thornton Camelsa on November 28, last year. It affected the company group Cairns Holdings Ltd and its subsidiaries, Cairns Foods, and M.E Charhon (Pvt) Ltd.

Under this period, the judicial manger was supposed to implement a strategic review of the company’s businesses and operations as part of his reconstruction plan. According to a document in possession of this paper signed by the judicial manager, Cairns Foods workers went on unpaid leave on December 17, last year with their employment contracts temporarily suspended.

Full employment terms are to be reinstated once the Group (Cairns Holdings) successfully concludes the reconstruction and turnaround process.

The suspended workers are to be paid a pro rata allowance of $116.40 based on the number of days they reported to duty between the period November 29, to December 14, 2012.

However, no meaningful developments have been witnessed in the areas under review. Cairns Holdings has a $20 million debt and is currently operating at five percent capacity utilisation due to acute working capital shortage. Prior to the Judicial Management, Cairns Foods’ Mutare branch was embroiled in a long running dispute between management and more than 150 of its workers.

The employer offered a poverty package of one-week service pay, two weeks severance package, payment of three months medical aid. Workers demanded 12 months for both service severance and medical aid. After intensive negotiations the parties hit a deadlock before referring the matter to the retrenchment board in terms of the Labour Act.

The retrenchment board ruled that the affected workers should be paid two months severance pay, two months pay for each year worked as service pay and one month pay as relocation allowance.

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