WINE and beer maker KEO yesterday announced the dismissal of 75 workers – the first stage of redundancies that have sparked indefinite industrial action in the Church-controlled company.
KEO plans to shed 150 jobs from a workforce of some 550 as part of a bid to “remain a viable economic unit” but its refusal to offer any compensation has prompted workers to go on an indefinite strike.
“The company is saddened because unions have encouraged and urged the employees to strike, which can only harm the ailing company further,” KEO said. “They don’t seem to be truly aware of the crisis plaguing our economy, especially local industry, and they do not assume their own responsibilities in ensuring the survival of the country’s production units.”
Striking workers, angered by the management’s stance, yesterday prevented company brass from entering the premises, forcing them to leave.
A group of Limassol MPs from AKEL, DIKO, DISY and EDEK, visited the workers, offering their support and pledging to try and meet the Archbishop to discuss the matter.
“We will seek a meeting with the chairman of the company but mainly with Archbishop to discuss the matter because what is happening is really unfair,” AKEL MP Costas Costa told the Cyprus Mail.
The point of conflict is the company’s refusal to offer any compensation to the150 workers, beyond what they are legally entitled to.
KEO said the workers made redundant will receive a total of €15 million through the redundancy and provident funds – allocated according to their years of service and salaries.
An additional €1 million will be paid for other obligations provided for in the law.
Unions wanted the same compensation deal afforded to 130 workers sacked from KEO in 2006, which would have cost the company €5.2 million this time round.
They also asked the company to offer voluntary redundancies.
The company refused and the two sides sought mediation from the labour ministry, which proposed a compensation package of around €2.5 million.
KEO rejected the proposal immediately and went ahead with the layoffs, handing workers their dismissal letters on Tuesday.
“The ministry asked both sides to respond to this proposal and take no further action for a week to ensure smooth relations. Instead, the company invited the staff yesterday to hand out the redundancies. The employees reacted with an impromptu strike, which we support completely, and this official strike that started today covers all districts,” said Neophytos Constantinou, representing the SEK trade union.
KEO urged workers to return to their jobs immediately and “actively show the necessary respect to the organisation that has offered work to thousands of people over the decades and has supported their efforts to provide for their families and educate their children.”
The company said the unions ignored the unfavourable economic environment and the KEO’s dire financial position, and persisted in their unreasonable demands for excessive compensation beyond the requirements of the law and the collective agreement, which are impossible to be met.
The company said it had offered to pay laid off staff a “significant amount as a bonus” but it was rejected.
Constantinou said the offer was for €500,000 but it was never made officially.
In any case, it fell far short of the €5 million the unions were initially asking.
KEO blamed the decision on the “protracted economic crisis”, as well as an unfavourable market environment – both in consumer shopping patterns, as well as productivity.
The reduction in the company’s operations is exacerbated further by the “ever-increasing imports from abroad”, it said.
“We have been observing this reduction over the past few years and it has resulted in significant losses for the company, as can be seen through the audited accounts of the past years,” said KEO.
As a result, KEO said it has had to take action to boost productivity and competitiveness, which inevitably led to a reduction of the number of required employees.
In 2010, the KEO Group made a net loss of €3.4 million.
The Cyprus Chamber of Commerce and Industry (KEVE) yesterday condemned the workers’ decision to strike.
“At times of deep economic crisis, which has seriously affected the company’s operations, the trade unions are refusing to accept the legal compensation they are being offered by the company and insisting on demanding excessive gratuitous payments, which if satisfied, will lead the company to end its operations, endangering the 400 jobs of the remaining employees,” said KEVE.