Dismissed Mackwoods’ staff to resort to union action
The ongoing drama at Mackwoods Pvt Ltd took a different turn last week when some 60 workers were fired and the management allegedly taking steps to dissolve the company, disgruntled employees, seeking union action. Eleven employees have resisted an ex-gratia payment of three months. Some of these workers told the Business Times that they are already in the process of filing action through their Ceylon Mercantile Union. “The management said that the termination was triggered by the adverse financial situation due to litigation against the company in May as well as the NDB Bank parate action which saw its factory at Ja-ela being seized.
All this made it impossible for them to carry out normal operations and were therefore not in a position to offer work to us,” P. Jayasundera, an employee who resisted the termination said.Mr. Jayasundara has been at Mackwoods for 14 years and has some seven more years to go before retirement. 53-year N.P.A. Chandana who is faced with a similar situation also said that he will follow whatever action taken by the union. “The management told me that our stores were seized and that they can’t let us work anymore. They offered three months’ salary, but that isn’t fair,” he said. Attempts at contacting the management and its directors weren’t fruitful. Sources close to the management said that as business was slow, they want to dissolve the company, but this could not be independently confirmed.
The 11 union workers had been asked to report to the company Personal Manager Lal Leanage and were informed of their dismissal. They however refused to sign the letter. The letter to workers discontinuing their services read as follows: “You would be aware that the company has been facing several economic hardships and litigation due the inability of the company to meet its financial obligations. We have to regretfully inform you the cessation of your employment. Provident and gratuity payment will be paid.” The Mackwoods Group is in the midst of a power struggle with its chairman Chris Nonis pitted against individuals including his sister and former co-chairman Nirmali Samaratunga.
The latter had complained to the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC) that a recent transaction pertaining to the sale of Agalawatte Plantations (APL) to a Browns Group subsidiary was not proper in law. The deal was then suspended by the SEC amidst protests from the Mackwoods Group with a further development being the Appeal Court on August 10 issuing notice on the SEC and CSE based on a writ application made by Browns Power Holdings Ltd challenging the delay in approving the transaction which saw the regulator nodding conditional approval for the mandatory offer of Browns Power Holdings Ltd to purchase the remaining shares of APL this week.