Response Statement to New Era Articles by

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The Chief Executive Officer of National Housing Enterprise Allow me to respond to the two articles that appeared in the New Era of 23rd and 27th February 2007 spreading allegations about restructuring and retrenchment at NHE. The two articles are full of misrepresentation and distortion of facts and devoid of any truth, thus rendering these representations and the author as having malicious intent. In the first analysis, the reporter chose, for reasons only known to himself, to continue publishing the two articles without seeking to hear the side of NHE management on the allegations made by the company’s ex-employees. This is a totally unprofessional and unethical act on the part of the New Era reporter. This biased act has made the reporter to run a risk of being fed with wrong information and consequently misinformed the Namibian public. I now want to set the record straight as follows: The process of restructuring and reorganization of NHE, which subsequently led to the retrenchment of some employees, was decided upon by the NHE Board during its meeting held on 26th April, 2006 and is thus not a personal programme of the CEO as alluded to by the author in the said articles. Reasons for restructuring: Firstly, to enable the company to implement its new vision, corporate strategy and organizational structure adopted by the Board in February 2006. In its new corporate strategy and organizational structure, the company has introduced new-core businesses it will venture into such as providing and managing rental accommodation, developing houses in the rural areas, investing in municipal infrastructure development, just to mention a few. It is thus a blatant lie and misrepresentation of facts for the author to allege that NHE has no new-core businesses to venture into and hence, the company has no basis for restructuring and or retrenching employees as such. Secondly, to reduce the employment costs which stood at 68% of which 42% attributed to management salary bill with the aim of shifting the saved resources to build more houses for the Namibians in need. This move is in line with the call of the Namibian Government as reconfirmed by the speech of His Excellency President Pohamba in his address to the CEOs of State-Owned Enterprises (SOEs) a week ago. It is against this background that the Board negotiated with the current CEO (Mr Hailulu) a 40% reduced remuneration package compared to what the former CEO was earning. In the same vein, the decrease of the four General Managers’ positions to three Senior Managers’ positions has also come with a 27% reduction of remuneration packages attached to these positions. Surely, this should be a commendable act by NHE instead of being condemned by a reporter of New Era, a State-Owned Enterprise that is expected to support well-intentioned Government reform programmes such as this one. Thirdly, to improve NHE operational efficiency and delivery of services to the people of Namibia. In all fairness, one should ask the question – if the people of Namibia are happy with the delivery of housing by NHE for the past five to ten years? If the answer is yes, then there is no need to do all these changes. But if the answer is no, which is what I believe many Namibians will agree with, then these changes are long overdue. How many clients and potential clients of NHE have entered our offices in Katutura and elsewhere and left with sad faces and “bleeding” hearts. The public are my witnesses on this – that NHE needs to drastically pull up its socks and begin to render a better service to the people of this country. Namibians deserve better. As His Excellency President Pohamba put it in his recent address: ” Gone are the days when SOEs served as a preserve for those who only want to enjoy handsome rewards that are not commensurate with their contribution to the national development process”. At NHE, we are working hard to position housing as one of the key contributors to Namibia’s economic growth and sustainable development and to the realization of Vision 2030. It should be noted thus, that for any significant improvement to take place in the operation of any business, commensurate enhancement of the capability and capacity as well as mobilization of requisite resources need to be done equally. The so-called N$21-million profit scored during the 2004/2005 financial year mentioned in the article should be viewed as a big insult to the people of Namibia, especially people who have been in a queue waiting for years to get houses from NHE. Did the reporter know that during the same financial year, NHE only built 313 houses in total before “celebrating the so-called profit made?” One should compare this housing output and the overwhelming unmet demand for housing out there and make up your mind on the meaning of the so-called profit scored. The fact is, NHE did not meet the target of building 1ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 400 houses that year as set by National Development Plan II. Thus, the N$21-million must be viewed as primarily unspent resources and not as real profit. The reporter proceeded to confuse the readership on the process followed to retrench employees at NHE. The fact is that retrenchment is a function of the restructuring and reorganization process, which process was embarked upon for reasons stated earlier above. Retrenchment and the qualification issue were never the targets and intention of restructuring at NHE. People who were eventually retrenched were so affected by the position changes that occurred in the organizational structure as revised in line with the new-core business corporate strategies as mentioned earlier in this write-up. The company, in line with the Board resolution and knowing the educational background of our people, has pursued the route of minimizing the impact of the restructuring by retaining and redeploying such affected people to various positions. To treat all affected employees equally in retaining or redeploying them, the company had to use common qualification criteria such as experience, academic qualification, age and retrainability. It is this exercise of redeployment and retainment that brought up the issue of qualification and not as the target of restructuring in any way. Twenty-five people affected by restructuring were successfully retained and or redeployed by the company. The company is also implementing its policy on job qualification requirements with the aim to improve competencies and capacity of its employees and that of the company, as any other corporate bodies will do in the labour market. To substantiate the company’s position that people are not being chased out of the company because of qualification issue, NHE has granted 25 employees enough time (3 to 5 years) who partially do not meet the minimum requirements attached to the jobs they are occupying currently, to work towards attaining such qualifications. These people have not been chased out of the company’s establishment as the author of the article seems to allude to. In addition, the company has a study support policy in place to assist those who have and want to do further studies as such. It is also not wrong, as the author tries to imply, for NHE to consider employing University or Polytechnic graduates. The Namibian Government is spending about one-quarter of the national budget on education – parents are equally spending the last cent in their pockets to finance higher education of their children – industries need enhanced knowledge and skills to increase their productivity and competitiveness and by so doing contribute to sustainable economic growth and prosperity in this country. It is against this background that we at NHE feel that the labour market needs to open up their doors to absorb such fresh skills into their production lines and blend them with the experienced cadres already employed. It is indeed an irony when Namibia is well known to have a very limited pool of qualified/skilled personnel, and yet when such people are produced by the higher education system they again struggle to get even an entry job in our labour market. We all know university and poly graduates who are still roaming the streets with their diplomas and degrees after such heavy investment was made to train them. Is this right? Certainly not. The author could not substantiate the accusation that the process of restructuring and retrenchment at NHE is tainted with controversy and irregularity and that Mr. Hailulu has, according to the author of the articles, circumvented the labour law. This is indeed a naiÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¯ve allegation that assumes that there can be a person in this country with the ingenuity to do things outside the law and still get away with it. The fact remains that anything one does outside the law, especially on such a sensitive matter like restructuring and retrenchment, is illegal and can and must be challenged in any competent court of law. Contrary to the allegation, the restructuring and retrenchment exercise was carried out within the ambits of the labour law and company policy on retrenchment. All procedures as per the relevant provisions of the Labour Act were followed to the letter, including informing and consulting all parties – the union, the Office of the Labour Commissioner, and NHE staff members. The Labour Act requires that an employer consult and inform affected employees on retrenchment within a month before such process could be finalized. With respect to NHE ex-employees, they received notification letters at the end of July 2006 and later at the end of August 2006 that their services would be terminated at the end of September 2006 and that the company would negotiate their termination terms with their representatives before the date of termination. Negotiations on the retrenchment packages thus started in August 2006 with NAFINU representing employees falling within its bargaining unit and Metcalfe Legal Practitioners representing some ex-managers. During September month the union, NAFINU, declared a dispute of interest challenging the process of restructuring at NHE. As per the provision of the Labour Act, the termination of services of those affected could not take place by the end of September any longer until a dispute was resolved. It is against this background that only the services of the ex-managers were terminated on the 30 September and not of those falling under the NAFINU bargaining unit. The dispute was eventually heard and resolved by a conciliation board set up by the Office of the Labour Commissioner on 1 November, 2006. The outcome of this conciliation board was clear and evident that NHE did not do anything wrong with respect to the labour law procedures that were followed. Again, it so follows that the services of the employees represented by NAFINU were only then terminated at the end of November 2006, subsequent to the resolution of the dispute at the beginning of that same month, as mentioned earlier. The union was, as per the requirement of the law, informed of the new termination date (last day of November 2006). In the same vein, ex-NHE managers represented by Metcalfe Legal Practitioners lost a court case to NHE after approaching the High Court with an urgent application in November last year seeking a relief for them to be reinstated in the employ of NHE. So, it is thus not true that the services of NHE ex-employees were terminated unduly or unfairly. After all, it is not the media or anyone else who can prove NHE wrong in this matter, but the competent court of law and other legally-constituted mechanism such as the Conciliation Board. Surely, it is the right of individuals to seek further legal recourse, if they so feel, through normal procedures and proceedings as laid down in the laws of the land. The point is, ex-employees of NHE are represented by competent labour and legal representatives who are better positioned to challenge any wrongdoing by the company. The New Era reporter also confused the issue of termination of services and negotiation of retrenchment packages. Let me make it categorically clear – the Labour Law empowers employers in this country to have the prerogative of deciding on the date of service of termination in retrenchment cases. Thus, although the employer is required by law to inform the affected employees and their legal representatives about the termination date, as NHE did in this case, such date is not negotiable. The Architects of the labour law were foresighted enough not to subject employers to negotiate with social partners dates of termination of employee’s services affected by retrenchment because it could practically mean that such negotiations could drag on forever as there would be no strong incentive on the part of the union to agree on packages as long as their affected members are still receiving full remunerations in any case. The New Era reporter also jumped the gun and thus ran a risk of misinforming the public through such articles by levelling an allegation that NHE has not offered a fair and attractive package to ex-employees. The truth is, NHE is still to date negotiating with the union, NAFINU, such retrenchment package. The two parties have been meeting for the past three weeks and our next negotiation meeting is Wednesday this week. So the quoted figures in the New Era articles are therefore a serious distortion and misrepresentation of facts in this case. The reporter might have confused the terminal benefits that the company has paid to retrenched employees in compliance with the minimum requirements of the Labour Act and company conditions of service such as accrued leave days, one week severance pay for every year worked, etc. These are non-negotiable items, and it is for that reason that negotiations are still ongoing on all negotiable issues such as extra weeks for every year worked, assistance on housing, medical aid cover, etc. The public was therefore half-fed on this matter by New Era. I can assure the public that negotiations on the retrenchment package are going quite well, and the outcome will be reached within a reasonable period of time. Lastly, the insinuation that the NHE Board and CEO heads are about to roll, is wishful thinking. Boards and CEOs in the public sector are fired for three common reasons – stealing public money; misusing or mismanaging public assets; and being incompetent, non-performing and not delivering the results. They are not fired for restructuring and reorganizing the State-owned businesses for improved service delivery and serving the people of Namibia better. The New Era reporter has totally failed to point out which of the three afore-mentioned reasons the NHE Board and its CEO are guilty of. V. HAILULU (MR) CEO, NHE