Engen in talks with staff over voluntary severance
ENGEN Petroleum is facing possible job cuts as the oil and gas company undertakes a major shake-up of the business.
Engen, whose refinery in Durban has a nameplate capacity of 120 000 barrels of crude a day, yesterday said that it was in talks with employees to streamline the business in a bid to remain competitive.
Engen spokesperson Gavin Smith said the company, which employed 3 000 people, had examined its operational structure with employees. He said the review had led to certain positions being affected.
“Engen and its employees have been engaged in a company-wide initiative to create an efficient organisation that will enable more focus on the customer in order for Engen to remain competitive and drive growth,” Smith said.
“Engen is currently engaging affected employees that are mainly based in its corporate offices to explore a variety of alternatives that include applying for a different role within Engen or applying for a voluntary severance package (VSP) to avoid retrenchments. This process is ongoing.”
Chemical, Energy, Paper, Printing, Wood and Allied Workers Union national co-ordinator Jerry Nkosi said voluntary packages had first been offered to managers in February. He said the packages had now been offered to employee’s low levels. Most of the workers had found the packages were attractive.
“We never thought that so many people would apply for VSP. Our duty is to preserve jobs and people have applied for packages, because they have a lot of service with the company. Even if the company offers financial training for employees what will happen to them a year down the line?” asked Nkosi.
Discussions
A source with knowledge to the discussions said employees had received letters in terms of Section 189 of the Labour Relations Act. “While they (Engen) anticipated shedding mainly older, white workers, they have been inundated by a take-up of applications for packages for voluntary severance packages from black staffers in all categories.”
Smith declined to divulge the number of employees who would be affected saying “any estimate as to the total reduction in the number of jobs at this stage would be pure speculation”.
Engen operates more than 1 500 service stations in 18 countries, of which around 1 000 are located in South Africa, the remainder in 15 countries across sub-Saharan Africa.
Smith said petrol attendants would not be affected by the process. “All Engen forecourt attendants are employed by our dealers and are not affected by this process.” Smith also said that the affected Engen employees would be engaged in an open, respectful and transparent manner.
Trade union Solidarity said it had not received any notification from the company.
Engen said its profit increase of R4.983 billion for 2015 was due to the significant decrease in inventory revaluation losses.
Losses
It said these losses were incurred in the prior year due to the downswing in the crude price, which commenced toward the end of the 2014 financial year.
“In 2015 it said it had weathered a stormy economic climate. A confluence of low growth, interest rate increases and high inflation affected household income.
Despite some relief from lower fuel prices, weakened currencies negated the impact of the falling oil price to the consumers,” the company said.