The Windhoek High Court is set to deliver a judgement in which Namibia’s retail giant, Pick n Pay, seeks to overturn a 2023 arbitrator's award.

The company reached an agreement with the Namibia Food and Allied Workers Union in 2019 concerning salary increments and employment benefits for permanent workers in Grades 1 to 6A bands.

Key points of the agreement included a 6% salary increase for 2019/2020, a further 6.5% increase for 2020/2021, and a 7% increment for 2021/2022.

Transport allowances were set at N$624 for the financial years 2019/2020, 2020/2021, and 2021/2022, while rental allowances were agreed upon at N$200 for 2019/2020, rising to N$240 by 2021/2022.

There was also a guaranteed 13th cheque equivalent to one month’s pensionable salary, payable in December.

The agreement was to be implemented by July 1 of each year and had an expiry date of June 30, 2022. 

But Pick n Pay later notified the union and the labour commissioner of an intention to realign business operations due to economic challenges.

In court documents, Pick n Pay laments that the arbitrator failed to consider where the retailer demonstrated that it encountered unforeseen and fundamental change in circumstances, which frustrated the performance of the collective agreement.

Pick n Pay says that in 2019, before COVID-19 hit, it made a loss of N$6.8 million, and this led to the restructuring of the business. It further says that it suffered a loss of N$37 million in 2020.

The arbitrator’s order compels the company to honour the agreement, and it was subsequently ordered to pay and effect the payments on October 23 of last year.