Clover ordered to reduce restructuring job cuts
Trade unions emerged as the big winners after the Competition Tribunal ruled yesterday that Clover Industries has to reduce the number of jobs it is cutting as part of its restructuring. According to a Business Day report, the tribunal ruled that the number of employees retrenched has to be reduced to a maximum of 277 from the 516 first proposed by Clover.
Separately, it also conditionally approved Israeli-led consortium Milco’s acquisition of Clover. The job losses are linked to Clover’s Project Sencillo, a project that involves the rationalisation of the company’s assets, including the consolidation of distribution operations.
It is unrelated to the Milco takeover.
The tribunal also increased the moratorium on job cuts due to the completion of Project Sencillo from two to three years. In terms of the R4.8bn transaction, the consortium will buy Clover for R25 per share.
But unions at Clover, the General Industries Workers’ Union of SA and Inqubelaphambili Trade Union, urged the tribunal in August to block the merger. Milco and Clover had committed not to retrench any employees due to the completion of Project Sencillo for two years from the implementation date of the proposed merger.
The tribunal said the merged entity has committed to creating 550 new permanent employment positions at Clover through the expansion of Project Masakhane in the five years after the implementation of Project Sencillo.
Project Masakhane is a Clover project aimed at increasing its distribution reach into previously underserved and unserved areas.
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