The Zimbabwe United Passenger Company has finally succumbed to years of Zanu PF abuse carrying party faithful to political rallies and forced to ply less profitable rural routes to appease rural voters.
However, the once vibrant bus company has the nightmare of raising over US$2 million in exit packages for the affected workers.
Zupco approached Government seeking permission to retrench the workers citing, among other things, a depleted fleet and poor revenue inflows.
Government — through the Ministry of Labour and Social Services — recently approved Zupco’s request in terms of the Labour Relations (Retrenchment) Regula-tions of 2003.
"It is hereby notified that the Minister of Labour and Social Services, in terms of Subsection 9 of Section C of the Act, has considered the proposal of Zupco to retrench employees. Minister has approved the proposed retrenchment, subject to the terms and conditions, which are listed in Annexure 2 of this form," reads a notice signed by Labour and Social Services Minister Paurina Mpariwa.
According to the terms and conditions of retrenchment, Zupco has to settle service pay amounting to two months salary for each year worked and three months salary in severance pay.
Government also directed Zupco to pay an equivalent of one-and-a-half months salary in relocation allowance and the actual transport within six months after payment of the package.
Zupco will further provide life cover to the affected employees for a year.
In May this year Zupco chief executive officer Mr Morris Sakabuya said retrenchment was the only way to save the firm from collapse.
Zupco has 1 077 employees and of its 325 buses, only 114 were on the road in May this year.
The bus-worker ratio was one to five and the wage bill accounted for 34 percent of the revenue generated by the company.
An internal report produced by the company this year attributed the current state of affairs to a drastic decline in revenue inflows, a depleted fleet and ballooning debts.
The company’s operating profit margin declined from 26 percent to 4 percent as of March 2010.
Zupco also owes its creditors over US$1,4 million in outstanding statutory payments and utility bills.
In January this year, Zupco sent the workers on leave pending retrenchment, but later reinstated them as the decision was unprocedural.
The company is also facing crippling lawsuits from workers who were unfairly dismissed.
A recent case is of former procurement manager Mr Emmauel Madry, who has attached software, furniture and vehicles as the company is reportedly failing to pay him over US$95 000 as compensation for unlawful termination of his employment contract. He was fired for carrying his fuel allocation in containers.