COVID-19 bailout to subsidise Nortex salaries
Chakalisa Dube | Friday April 24, 2020 07:25
The company was responding to MmegiOnline enquiries after it had said it is placing its employees on unpaid leave effective April 1, 2020.
The company manager, Rachit Josh conceded that initially, the towel manufacturing company had resolved it will not pay its employees salaries for the month of April, but it has since changed its stance.
“Just prior to the lockdown we had a meeting with the workers committee and reached an agreement that we will not pay salaries for the month of April since there will be no production. Without production, it means that we are not making money hence we cannot meet our obligations such as paying salaries,” Josh explained.
He continued: “We have since applied for the COVID-19 government subsidy meant to help companies pay their salaries and stabilise businesses. This then means that the company will be able to pay its non-executive employees their full salaries for the month of April”.
Several companies had also initially indicated that they would not be able to pay their salaries for the month of April. The companies attributed lack of trading as a result of the lockdown and the effects of the coronavirus in general as one of the reasons they will not be able to pay their employees.
Most employers changed their stance immediately after the government indicated that it would assist them with paying out salaries through the COVID-19 subsidy.
Through the relief fund, government will contribute 50% towards employees’ basic salaries of the affected businesses. The subsidy goes up to P2,500 per month (for each of the affected employees), starting from end of April to June end.
Josh added that the company is yet to communicate the latest development to its employees. “I can, however, make a commitment that we will start working on their salaries by next week, probably on Monday.”
Josh further stated that the company would offer its executives 20% of their salaries for the month of April. “The move was taken in a bid to cushion the company financially,” he said.
Last month the company had said that it has received postponements of its orders for April from regular customers in South Africa as a result of the coronavirus (COVID-19) pandemic.
At the time, Josh had said that the company might face cash flow problems as a result of the coronavirus.
Nortex manufactures towels and exports them to South Africa. The company boasts a monthly turnover of P10 million and a staff complement of over 500.