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EX-EMBIVENI SHAREHOLDERS MUST PAY E17M TERMINAL BENEFITS

By MBONO MDLULI | 2023-09-19

The Industrial Court has ordered former shareholders of Eswatini Meat Industries (EMI) to pay its former employees their terminal benefits.

The former workers, said to be 201, are set to receive over E17 million.

The court also failed to understand why the respondents failed to pay the terminal benefits because the money demanded by the applicants was actually a drop in the ocean, compared to the money received by the respondents from the sale of the shares, which amounted to E120 million, according to the judgment.

“The first to ninth respondents stand to pocket E120 million from the sale of the 10th respondent (Embiveni).

The benefits of the applicants (the former workers) are just a small fraction of what the first to ninth respondents (the former shareholders) stand to gain from the sale of the 10th respondent to Inyatsi. They will remain with a fortune even after paying each and every one of the employees their benefits, which would be seen as pocket change if you compare it to what the first to the ninth respondents remain with,” said part of the judgment.

The court further stated that it was unclear why the first to ninth respondents, after having penned down in their own voluntary agreement with Inyatsi that they would ensure compliance with Section 33 bis and the payment of terminal benefits to the applicants before the takeover and thereafter summersault and acted as if that agreement did not exist and went to court to play innocent victim.

“The court finds the conduct of the first to ninth respondents to be completely dishonest and frown on such conduct,” it stated.
This comes after the former Meat Industries shareholders sold the company to Inyatsi Group Holdings.    

The former workers last month approached the court, where they sought an order ensuring that the former shareholders paid the terminal benefits, amounting to E17 268 956.90.

They also sought that the matter be dealt with urgency and also for the shareholders or their agents be stopped from distributing any sums received as proceeds of the sale of shares held by the respondents.

Further, they sought that the respondents (1-9) must comply with the provisions of section 33 bis (1) of the Employment Act of 1980 (amended).    

Section 33 bis, according to the judgment, clearly states two conditions or transactions that attract the liability of the employer to pay terminal benefits.

Firstly, it is when the employer sold the business to another person or allows a takeover of a business by another person, the payment of terminal benefits is immediately activated.

Secondly, it is where the employer allows the takeover of the business by another person, the terminal benefits of the employee ought to be paid.   

The workers’ contracts ended on July 31, according to a letter informing them about the sale of the shares.

The workers alleged that Jonathan Williams, who was the Managing Director of EMI and a major shareholder, had resigned from the company and was believed to be planning to relocate to overseas.

Other shareholders, who were cited as respondents in this matter, included Kjott-OG Fjorfebransjens Landsforbund, Ben Dlamini, Vincent Lukhele and Sipho Shongwe.

Tetminal
Others are Richard Dlamini, Muntu Dlamini, Howe Investments (Pty) Ltd, and TWK Agriculture.
The applicants were the former workers, who were led by Mduduzi Shongwe.

In its judgment, the court found that indeed, the workers were supposed to be given their terminal benefits, according to Section 33 bis of the Employment Act of 1980.

The court also found out that there was a sale and takeover of all shares and assets in Embiveni by Inyatsi Group Holdings (Pty) Ltd, which indeed triggered the operation of Section 33 bis of the Employment Act of 1980.

The Industrial Court further found that the respondents had undertaken to comply with Section 33 bis of the Employment Act of 1980 before the takeover of Embiveni by Inyatsi Group Holdings.

According to the court, the respondents failed to ensure the compliance with the legislation.
Consequently, the respondents were ordered to pay all the applicants their terminal benefits in compliance with Section 33 bis of the Employment Act of 1980 within 30 days after the issuing of the judgment.

The respondents were also ordered to pay costs of this application on an attorney and own client scale.

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