KCM withdraws critical allowances for 320 staff

Konkola Copper Mines Plc (KCM) has formally withdrawn a critical allowance payment affecting 320 staff effective March 1, 2019.

But KCM’s corporate affairs general manager Eugene Chungu has explained that the critical allowances awarded to certain employees was a stand-alone payment and did not affect basic pay.

In correspondence seen by Diggers! KCM announced that it had withdrawn the critical allowances to various members of staff effective this month.

“Management has reviewed the principle of critical positions/skills, which includes, among other factors, the skill-set availability and scarcity, contribution to business plan etc. Management has taken the decision, on the basis of fairness and consistency, to drop the principle of having a small population of positions defined as critical positions as, in effect, a wide-range of positions across the business fall in the category of being critical given their contribution to and impact on business plan. This letter, therefore, serves to advise that you will no longer be paid the critical allowance. This is effective March 1, 2019,” KCM’s vice president, human capital management, Beatrice Mutambo stated.

But responding to a press query, Chungu stated that the critical allowance component was implemented by the mining firm as a “retention strategy” for select skills-set at a particular point in time.

He also disclosed that the total number of affected employees was 320 out of the company’s 13,000 members of staff.

“Critical allowance was implemented in KCM as a discretionary stand-alone retention intervention a few years back. Therefore, this withdrawal does not impact the basic pay. The number of individuals impacted is 320. KCM values all its employees and endeavours to uphold good working conditions for all the 13,000 employees working for the company,” Chungu stated.

“It is common business practice, globally, for a company to implement a retention strategy for select skills set at given points in time. Normally a company would do this to address a particular prevailing market condition, mainly skills scarcity. Such a retention strategy is normally deployed over a period of time. A company will evaluate the market conditions and review the retention interventions in line with prevailing market conditions. As best practice, retention interventions are designed as stand-alone discretionary (non-contractual) incentive, meaning they are separate from basic salary.”

According to prior correspondence from the mining company’s human capital management in 2013, the critical allowance was previously awarded to employees, which constituted 10 per cent of the monthly basic salary.

Meanwhile, Chungu stated that KCM continued to engage government over the disputed 2019 mining fiscal regime and was looking forward to fruitful resolutions to benefit all stakeholders.

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