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Manager wants NamWater board to discipline CEO

15/09/2017
by Linekela Halwoodi
News Flash

 

Michael Gaweseb, a NamWater director, has written to the board urging them to discipline the Chief Executive Officer Dr Vaino Shivute over the issue of approving the extension of the contracts of retired workers.

Gaweseb’s letter came after the board sought a legal opinion from ENSafrica in August this year when it emerged that there were workers who are beyond retirement age but are still employed. Although The Villager could not establish the exact number of such workers, the board of directors was forced to seek a legal opinion from ENSafrica on how to proceed with the matter. ENSafrica, in a legal opinion dated 30 August February 2017 recommended the termination of the contracts because the Chief Executive Officer did not follow the company’s recruitment process.

The legal opinion also suggested that those managers found to have acted outside the agreed law should be held accountable in their capacities. “I am writing about the recently sought and accepted legal opinion by the Board about the extension of employment contracts of retired staff. “Apart from recommending termination of such contracts, the advice given alleged seeming misconduct from the CEO. “It stated the CEO did not follow recruitment policy and caused NamWater to act “ultra vires” as per sections 3.12 and 3.19 respectively.

“It appears the legal advice is principally based on section 3.16 in which it is stated that the CEO ought to have discussed the matter with the Board, which was not done. “It is my recollection that the CEO maintained when the matter arose that he acted within policy and powers vested in that office by extending these contracts.

“The legal opinion removed all doubt about wrong doing under section 4.2 when it advised that damages may be claimed from the CEO. “This has serious implications in my mind for the Board as well if it merely terminates the contracts without ensuring further adherence to company policy,” he said. Gaweseb said since ENSafrica had concluded that Shivute had acted outside the company’s rules, the board should act against him.

“Considering that NamWater is a public institution and that the Directors are ultimately accountable, I’m compelled to raise the issue of disciplinary action against the CEO,” he said. Gaweseb based his argument on the following: the above conduct is classified a major offence (“false evidence, dishonesty, disloyalty to NamWater”[potential charges]) as per the NamWater Human Resources policy. the employment contract dated 2 September 2014 of the CEO as per section 7.3, 7.4 and 7.12 provides for action as an agreement with the Board equally importantly the performance agreement I signed with the shareholder dated 18 May 2015 requires that I act honestly as director, ensure compliance with the SOE act, companies act, NamWater act, exercise a reasonable degree of care and diligence, ensure that the Board shall adhere to principles of good governance, amongst others.

As per section 16(1) of the NamWater Act, the Board is responsible for policy, management and control of NamWater affairs. Gaweseb said the board was courageous enough and investigated this matter and has full knowledge of policy violations.

“As a Director not taking action in my view would not be honest or in good faith when witnessing policy violations and sound governance principles. “The Board may not misrepresent with inaction, but inaction in that regard could result in a breach of duty. “In my view “legal convictions of the community and public policy and constitutional norms of fairness and equality before the law, the rule of law and justice for all” dictates that disciplinary processes be commenced,” Gaweseb said. NamWater cannot, Gaweseb said, discipline other staff for violating policy as that would violate equality before the law and fairness.

“This situation is not ideal for the corporation. There is enough jurisprudence in Namibia and in other common law countries in which liability against Directors is advocated for and sometimes won,” he wrote. Gaweseb said action against directors could also be pursued long after their term has ended. “In the event that I fail to convince my fellow directors to at least subject the official to disciplinary processes, I pray that the relevant authorities and or courts could consider this correspondence as a genuine attempt under the circumstances to grant me relief from liability,” he said.

He said it puzzled him why the internal audit quarterly reporting, which currently is not provided to the Board did not pick up on the matter or at least indicate the risk. “I herewith respectfully also request that these reports should be made available to the board and that the HR committee should ensure this matter is thoroughly addressed in the policy/delegation, etc. and approved by Board as soon as possible (so that future staff and Directors are clear,” he said.

When The Villager inquired about any knowledge of an email directed to the board requesting for action to be taken against him for false evidence, dishonesty and disloyalty to Namwater, Dr Shivute told The Villager that he did not have knowledge of such an email. “No, I am not aware”.

SALARY INCREASE STANDOFF

The salary negotiating teams of NamWater and Napwu are fighting the board for rejecting the proposed increases for 2017/18. Napwu’s proposals contained in a letter dated 8 February 2017 indicated that they wanted a salary increase of 12% on the total package across the board including non-permanent workers. They also said that NamWater should introduce a housing subsidy of 75% on 69% of the total annual package for those who intend to acquire a bond with a bank. Napwu also asked for the introduction of a water allowance of N$600 across the board.

In salary negotiations held between NamWater and Napwu teams from 16 until 19 August, the management agreed on an 8,7% for workers outside the management scale with effect from April this year. The 8,7% was broken down as 6,7% salary increase plus 2%. On 22 August, NamWater CEO Vaino Shivute presented the agreed increases to the board, but he was asked to go back and renegotiate. The Villager understands that the board rejected the agreed salary increases basing its reasons on the in?ation rate of 5,4% as previously agreed in a meeting held on 5 July 2017.

In a joint statement sent to the board on 28 August 2017, the NamWater negotiating team asked whether the directors acted within the approved mandate. The team said that the company’s human resource policy stipulates that the increases date for inflationary salary increases of 1 April.

This, the team argues, means that if they start negotiating early or beginning of the year, they had to face a 7% inflation rate. “The cost of living of employees increased in April 2017 as a result of the in?ation rate of 7%, causing the purchasing power to decline,” the joint statement said. It was for this reason, they said, the parties agreed mutually to work on the said in?ation rate as benchmarked to previous years.

They disputed the board’s 5,4% in?ation rate saying when this was brought up, the Namibia Statistics Agency had not published such figures. “The known in?ation rate at the time as at end May 2017 was 6,3% and at the end of June was 6,1%,” the teams said. The teams dismissed the notion that the public enterprises’ minister Leon Jooste’s letter on salary increases dated 1 April 2017 where he warned against awarding salary increases that exceed inflation rate affected NamWater. “It thus follows that he could not have been referring to an inflation rate as at the end of July or any other month other than the inflation rate applicable in April 2017,” they wrote. They added that unlike in the previous years, the parties this year first determined and agreed on the inflation rate right at the beginning of the negotiations.

“This was done to prevent a situation in which parties could try and delay proceedings with the hope of concluding the agreement in a month where the fluctuating inflation rate would be to their advantage,” they further said. NamWater, the teams said, can afford to honour the agreement.

“Napwu will or should reject any proposition to renegotiate the agreement. “The negotiating teams were duly constituted, and the agreement was arrived at in a sound and lawful manner,” they said. Reneging on the agreement, the teams argued, would severely compromise the trust and relationship between management and Napwu.

“The risk of industrial action from the bargaining unit will be increased signi?cantly,” the teams said. If NamWater reneged on the agreement, the teams concluded, it will be in default and would have acted in an unlawful manner as the agreement was a binding document signed by authorised signatories within the given mandate. NamWater head of Auxilliary Services Hieronymus Goraseb bluntly told the board that they do not agree with the instruction to renegotiate the salary increases. In his memo titled Submission Regarding Salary Agreement, Goraseb said: “We were briefed that you had directed us to conduct “new/fresh” negotiations - after details of the FY 2018 negotiations were presented to you.

write to you in my capacity as the chairperson - for and on behalf of the NamWater Negotiating team. “We do not agree with your instruction.” Shivute confirmed that there is a standoff over the salary increases, but said the issue was being discussed. think this issue is still under discussion. It has not yet been resolved. I think it is still going to feature at board level so that we can see how it is going to be resolved, so it is really difficult for me to share this information with you if the board is yet to look at this issue for a ?nal pronouncement,” Shivute said.

Speaking to The Villager on whether the standoff between the NamWater employees/Napwu and the top leadership had been brought to his attention, Mutorwa said, “No, I do not know about that.” Mutorwa also declined to comment on the recruitment dilemma of NamWater. “What I can confirm is that they are all NamWater employees. Now contact them individually, then you write a story. Why should I answer on their behalf? I do not know the details.

“If you say John Mutorwa has embezzled something then you go and ask the president, it’s wrong. “I am very serious about this because all officials of NamWater are under the Chief Executive Officcer regarding appointments and extending contracts and so on.

“It’s only the CEO that is appointed by the board, and the board will bring the name or names of possible nominees to the Minister so that Cabinet can also say yes go ahead and appoint these. “I will read The Villager to hear what they are saying. Number three confirm with Shivute without rumour mongering. I cannot speak on his behalf, whether their contracts have been extended or not, talk to them.” The Villager made efforts to contact Gaweseb, who was not available and his mobile was turned off.