The salary increase standoff between Debswana and the Botswana Mine Workers Union reached fever pitch last week when the union took a decision to seek relief from the labor department after negotiations with the mining giant collapsed. BMWU Secretary General Jack Tlhagale told The Sunday Standard last week that they have decided to approach the labor department for mediation after successive meetings with Debswana bore no results.
“Debswana has steadfastly refused to accede to our demands for a salary increase. We have therefore found it fitting that we should approach the labor department to mediate the issue and help us to reach a common understanding” he said.
Debswana Public and Corporate Affairs Manager Esther Kanaimba-Senai confirmed the stalemate on Friday, adding that Debswana and the union have agreed to go through the mediation process, in line with the dispute resolution process outlined in the 2007 Memorandum of Agreement between the BMWU and Debswana.
BMWU is demanding a 15% salary increase from the mining giant to cushion against the debilitating effects of the global economic recession. The union’s demands are premised on an earlier decision by De Beers, Debswana’s parent company, to award its employees salary increments across the board. De Beers employees in Botswana were treated to a 7.7 % salary increment while their Namibian and South African counterparts got 8% and 9% respectively. To that end BMWU is demanding a 15% salary increase, calculating inflation at 12.6 %, with an added 2.4 % adjustment.
Kanaimba confirmed that Debswana and BMWU have signed a Joint Dispute Statement which summarizes the positions of the parties, with the mining giant rubbishing the union’s demand for a 15% increase, instead proposing a 0% increase.
She added that though there are signs of improvement in the market, Debswana is not yet in a financial position to afford salary increases for employees.
“The company’s revenues for this year are projected to be far below the 2008 figures, necessitating the need for continued cash conservation. The company will also continue to focus on job preservation and cost containment in readiness for an upturn in the market. Therefore, a salary increase would undermine these recession mitigation initiatives that have so far benefitted the company and its employees” she said.
Negotiations between the two parties recently went into a lull, with both parties agreeing that they will reconvene to try and reach common ground. But BMWU was treated to a rude awakening when, after the talks reconvened, Debswana maintained their initial stand that they cannot afford to give employees a salary increment.
Debswana’s financial prospects were severely dented last year when the global recession resulted in the collapse of the diamond market, forcing Debswana to shut down some of its operations and retrench some members of staff.
While there are indications that the economic outlook and the demand for diamonds is experiencing an upsurge, Kanaimba maintains that Debswana still has to operate cautiously and keep its purse strings tight.