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Polihali Dam Project Faces Legal Challenge Over Mass Retrenchment

Business

Staff Reporter

In a dramatic turn of events, the Polihali Dam construction project, a critical component of the Lesotho Highlands Water Project (LHWP), has hit a major snag.

The Labour Court this week issued an injunction against Kopano Ke Matla Joint Venture, the project’s contractor, halting the retrenchment of over 90 workers.

This development follows the workers’ urgent legal action challenging the premature termination of their 24- month fixed-term contracts effective from January 31.

The diverse group of workers, including bricklayers, steel fixers, welders, drivers, chefs, carpenters, excavator operators, plumbers, and general labourers, were employed at different stages throughout 2023.

Their contracts were initially set to conclude in 2025.

The retrenchment process, led by the Lesotho Workers’ Association (LEWA) and Construction, Mining, Quarrying, and Allied Workers (CMQ), involves two separate disputes against the employer before the Labour Court.

LEWA represents approximately 80 workers, while CMQ advocates for 18, totalling 98 potentially affected individuals.

The retrenchment letters, which were served to the employees, reads: “We regret to inform that you are being retrenched as the project you were engaged in has come to an end. You are given a month’s notice, which will start from January 18 and will end on January 31. You will be paid your leave days and salary accordingly.”

The workers argue in their court filings that this action constitutes a breach of contract, rather than a legitimate dismissal, labelling it illegal.

“It is applicant’s submission that the respondent’s action of intending to dismiss the applicants from employment does not constitute a dismissal but is a breach of contract… It constituted a dismissal in terms of the Labour Code, and not just an ordinary breach of contract,” LEWA stated in court documents.

In response, the Labour Court Judge Teboho Thoso issued an interim order blocking the consortium from proceeding with the retrenchments until the case is resolved.

“Pending the finalisation of this application, the respondent’s decision to terminate the applicants’ contract prematurely is hereby stayed,” the judge ordered.

The hearing for the LEWA case is scheduled for February 8.

Kopano Ke Matla, a consortium involving Chinese firms Yellow River Company and Sinohydro Bureau 3, South Africa’s Unik Civil Engineering, and subcontractors Nthane Brothers (Lesotho), Esor Construction, and Mecsa Construction (both from South Africa).

It was awarded a M9.2 billion contract for the construction of the Polihali transfer tunnel.

This legal hurdle comes amid accusations of unfair labour practices against Kopano Ke Matla, including alleged sexual harassment by managers, provision of substandard meals leading to a fatality, and unequal payment standards for employees performing similar jobs.

The LHDA’s Public Relations Manager Mpho Brown has committed to investigating these claims thoroughly and taking appropriate legal actions where necessary.

“We take the issues mentioned in the letter from the association very seriously, and we are already in the process of meeting with the relevant parties from the contractors side, as well as representatives of the labour association, to ascertain the merits of the reports, and the circumstances leading up to them.

“Where it is found that there has been a violation of obligations or contract, remedial action will be taken as stipulated in our contracts with all contractors on the project. Where there is a violation of the laws of Lesotho or statutes of the labor code, the relevant legal processes will apply.”

The aggrieved workers petitioned the court to compel their employer to keep them at work until the completion of the project, and also to prevent their employer from retrenching them until it has convinced the court for dismissing them.  

However, in their court papers the workers argued that by disregarding their fixed-term contracts, the employer was not retrenching them but was in fact in breach of their contracts, which is illegal.

“It is applicant’s submission that the respondent action of intending to dismiss the applicants from employment does not constitute a dismissal but is a breach of contract. As far as we are concerned, because respondent’s intention breach culminates in the termination of applicant’s contract, it constituted a dismissal in terms of the Labour Code, and not just an ordinary breach of contract. Provisions of the Code regarding dismissal therefore kick in,” LEWA said in the court papers.

Having considered the workers’ application, the Labour Court issued an interim order preventing the consortium from effecting the planned retrenchments until the case has been finalised.

“Pending the finalisation of this application, the respondent’s decision to terminate the applicants’ contract prematurely is hereby stayed and or interdicted from terminating or proceeding to the process intended to affect the applicant’s contract,” said Judge Thoso in the LEWA case.

The LEWA case will continue on February 8 this year.

Kopano Ke Matla is a critical player in the on-going implementation of the second phase of Lesotho Highlands Water Project (LHWP), having been awarded a lucrative M9. 2 billion contract by Lesotho Highlands Development Authority (LHDA) to construct the Polihali transfer tunnel.

The consortium is made up of Yellow River Company (China), Sinohydro Bureau 3 (China), Unik Civil Engineering (South Africa) as main joint venture partners, and subcontractors Nthane Brothers (Lesotho), Esor Construction and Mecsa Construction (both from South Africa).

The impending retrenchments come at a time when Kopano Ke Matla is being accused of a host of unfair labour practices in the workplace by the workers.

Among others, the workers accused the joint venture of turning a blind eye as its managers sexually harassed some of them at work, and so doing violating the LHWPs safety and health standards.

The workers further claimed they were served meals that are unfit for human consumption at work, which had already claimed one life among them.

They also claimed they were being exploited through a practice of applying unequal payment standards for employees doing the same job.

The LHDA has since vowed to get to the bottom of the matter, and take appropriate legal measures where warranted.

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