Choppies caught again…this time breaking labour laws

03 Dec 2018

BY BONNIE MODIAKGOTLA

Choppies Enterprises - the country’s leading retailer has been caught in violation of labour laws following inspections done at some of its stores across the country by government agencies. 

Tshenolo Mabeo, minister of Employment, labour Productivity and Skills Development, disclosed to parliament Thursday that labour inspections carried on 35 Choppies stores identified labour laws violations, which range from overtime payments, sick leaves, maternity leave days and failure to pay accrued benefits. 

Parliament was told that Choppies management does not recognize sick leave notes from government health facilities, only accepting those from private healthcare providers. Paradoxically, the bulk of Choppies earn minimum wage thus making it difficult if not impossible to afford private healthcare with its exorbitant consultations fees – which on average start from around P250. Choppies cashiers and packers on average earn less than P1000. 

In other violations, Choppies female employees get three months’ maternity leave instead of the prescribed six months. It was also disclosed that employees are not furnished with copies of their contracts. Mabeo revealed that the labour inspections picked that employees who joined the pension scheme were not paid their severance packages for the period prior to joining the scheme. 

Moreover, employees are not allowed to form employee representative committees. The minister said he was not aware that employees who have grievances are dismissed without disciplinary hearing as such cases were not brought up to the attention of labour inspectors. 

Mabeo told parliament that since the beginning of this year, eleven trade disputes were registered and referred to the industrial court, with the disputes “involving unfair dismissals, terminal benefits and overtime amongst others”, he said. 

Following the inspection that identified violations, the minister says Choppies was advised about labour laws, and where they were found lacking, they were advised to bring their practice in line with the law. 

In April this year, Choppies employees in South Africa and Botswana went on a strike over low salaries and long work hours. The strike in Botswana only affected one store, and the employees were subsequently dismissed in what Ramachandran Ottapathu, the CEO, described as an illegal strike. Ramachandran has defended Choppies pay structure saying it is guided by the country’s minimum wages regulations thus they are in compliance. 

Meanwhile, Choppies last week had to contend with similar complaints from employees at their Zimbabwean stores. The employees decried unpleasant working conditions were sexual harassment is rife, in addition to unfair dismissals, low pay and racial attacks where some black employees are allegedly called baboons by their managers of Indian origin, according to reports carried by Zimbabwe media houses.

Faced with the deteriorating work conditions, the employees through unions reached out to Phelekezela Mphoko and his son Siqokoqela Mphoko - who since Choppies entered Zimbabwe in 2013 were paraded as the majority shareholders of the grocer. The Mphokos are reported to have met the employees at the company’s headquarters to hear their grievances, a development that attracted the wrath of the group’s top management based in Botswana. 

“Kindly note that Mr P Mphoko and Mr S Mphoko do not have a financial or operational say in the business of Nanavac. We strongly request that all employees desist from dealing with the above-mentioned persons with immediate effect,” Ramachandran Ottapathu, Choppies Enterprises CEO hit back in the terse statement. 

“Any action taken as a result from the above-mentioned persons will be contrary to the company rules and procedures and disciplinary action will be taken against the responsible employee (s).”

Choppies Enterprises, an investment holding company for Choppies subsidiaries is entangled in a fight with Mphokos over the shareholding structure in Zimbabwe. Choppies entered the Zimbabwe market in 2013 in a partnership with the Mphoko family though an investment vehicle called Nanavac Investments Private Limited, in which the company registration records show that Mphoko owns 51 percent while Choppies Enterprises had a 49 percent stake. 

This was done to satisfy the Indigenization Act which prevent foreigners from owning more than 49 percent shareholding in local businesses. Still, Choppies has always maintained that the true deal is they own and control 93 percent of economic interest in Nanavac while the Mphokos have only 7 percent.