Govt, Linmine unions sign severance agreement
Omai to start contract work
Stabroek News
October 11, 2002
Government and the bauxite unions have signed a severance/redundancy pay agreement paving the way for Omai Gold Mines Limited (OGML) to start stripping and mining activities at the Linden Mining Company (Linmine) on a contractual basis.
Stabroek News has learnt that OGML and Linmine are near an agreement under which OMGL would undertake stripping and mining activities at Linmine ahead of the company's planned privatisation. Under the proposed privatisation deal OMGL's parent company, Cambior, is expected to take a majority holding in the bauxite mining enterprise.
Stabroek News understands that the move for the contract work has been prompted by the need to establish the desired lead-time between stripping and mining so as to minimise the difficulties a restructured Linmine would face in its stripping, mining and marketing activities. It is also in part prompted by the need to help Linmine retain the share of the market it still has.
Sources close to both companies have told Stabroek News that to facilitate Omai's contract operations, the Linmine workers normally engaged in these activities would have to be severed. Stabroek News understands that around 300 workers would be affected. Some of the retrenched workers would be hired by Omai under new terms of employment. How-ever, sources close to Omai stressed that only the severed workers would be ripe for employment.
Under the agreement signed on Wednesday at the Office of the President the workers severed as a result of privatisation, job redundancy or voluntary severance, would receive six weeks tax free pay for every year of service up to a maximum of 104 weeks and a training grant equivalent to 10 per cent of the redundancy pay. These payments will be made on the separation of the workers from Linmine.
The agreement also provides for all outstanding National Insurance Scheme, Pay As You Earn, pension and thrift contributions to "be payable by the GoG (Government of Guyana) on behalf of Linmine. Additionally, the GoG will fund the actuarial deficit of the Bauxite Industry Pension Plan (BIPP) in respect of Linmine".
When the government a few months ago merged the Berbice Mining Enterprise with the Aroaima Bauxite Company as it consolidated the industry in the Berbice River, 80 per cent of the company's 460 workers received severance pay and training grants, equivalent to four weeks pay for each year worked. They are also being provided with free house lots either at Kwakwani or on the coast in the event that they do not now own one or if they do, swapping the one at Kwakwani for one on the coast.
The government provided $215M to cover these payments and up to September 24 had paid out $212M.
When it announced the severance arrangements the government said it would provide $212M to meet these payments.
Additionally the government has commissioned a report by a multi-disciplinary team headed by the Chief Planning Officer, State Planning Secretariat, to look at alternative economic opportunities that could be created in the Kwakwani area.
Last month, Cabinet Secretary, Dr Roger Luncheon announced that under the consolidation process, ABC had rehired 200 of the severed Bermine workers, 70 more than the number indicated when the merger was announced. Dr Luncheon said too that 200 persons requiring house lots had been looked at and the Ministry of Housing is presently assessing the names of additional persons requiring lots.
Stabroek News understands from various sources that the Bermine package of severance pay and other related benefits cost the government in the region of $260M.
The Linmine package is likely to cost somewhere in the region of $680M to cover all of the employee related payments.
To address the depressed economic state of the Linden community, in January the government launched the $1.2B European Community funded Linden Economic Advancement Programme (LEAP) to stimulate economic activity in the area. (Patrick Denny)