Meatco Namibia: Two-Thirds Salary Proposal for Employees Amid FMD Crisis

• Meatco has proposed paying employees two-thirds of their salaries for November, December 2026, and January 2027 due to financial strain from foot-and-mouth disease.
• The state-owned corporation's interim CEO, Albertus Aochamub, requested an urgent meeting with the Namibia Food and Allied Workers Union (Nafau) to discuss the temporary arrangement.
• Meatco also plans to introduce a voluntary separation program for employees aged 55 and older or those with redundant positions.
• The company's revenue dropped by N$757 million in the 2025/26 financial year, from N$1.86 billion to N$1.11 billion, due to fewer cattle available for slaughter.
• A political figure, Michael Mulunga, supported the temporary salary cut as a measure to prevent total job loss and called for government assistance for Meatco.

Aochamub emphasized that the intent behind these measures extends beyond mere cost containment, aiming instead to collaboratively identify solutions that are equitable, practical, and sustainable, while simultaneously minimizing the adverse impact on employees wherever feasible.

The state-owned Meat Corporation of Namibia, Meatco, has put forward a proposal to pay its employees only two-thirds of their regular salaries for a three-month period, spanning November, December 2026, and January 2027. This drastic measure is a direct response to severe financial pressures currently facing the meat processor, primarily exacerbated by an outbreak of foot-and-mouth disease (FMD). The interim chief executive, Albertus Aochamub, formally communicated this proposal in a letter dated October 13, requesting an urgent meeting with the Namibia Food and Allied Workers Union (Nafau) to deliberate on the arrangement.

This Meatco Namibia two-thirds salary proposal is presented as a critical component of an emergency labour cost containment package. The corporation's stated objectives are to curtail expenses, safeguard existing jobs, and retain essential skills deemed vital for Meatco's eventual recovery. Management has expressed its desire for open engagement with Nafau to iron out the practicalities of implementation, which include the handling of employee benefits, statutory deductions, and other related payroll matters. The company has indicated that this salary adjustment would be temporary, with any decisions regarding remuneration beyond January to be contingent upon a review of Meatco's prevailing financial and operational circumstances.

The proposed salary cuts by Meatco are set against a backdrop of escalating financial difficulties and operational disruptions. Prior to this proposal, approximately 400 production workers were already placed on three weeks' special leave due to the FMD outbreak, with their situation scheduled for review on October 23. The corporation's revenue experienced a substantial decline of N$757 million during the 2025/26 financial year, plummeting from N$1.86 billion to N$1.11 billion, a drop attributed to a reduced availability of cattle for slaughter.

Despite this significant revenue decrease, Meatco did report a profit after tax of N$40.5 million for the same period, alongside an improved cash position and a reduction in accumulated losses. However, the company has also faced scrutiny regarding its internal controls, with reports in February detailing the disappearance of approximately 900 head of cattle and N$2.5 million in cash reconciliations within the livestock procurement department remaining unaccounted for. Further compounding the financial strain, temporary restrictions on certain meat products to the European market have imposed additional constraints on the entity, as highlighted by Michael Mulunga, the Independent Patriots for Change shadow minister of agriculture, fisheries, water and land reform.

In conjunction with the proposed salary reduction, Meatco is also looking to implement a Meatco voluntary separation program. This program targets employees aged 55 and older, as well as those whose roles have become redundant following a revised corporate structure. Discussions with the union regarding this program would encompass crucial aspects such as severance pay, accrued leave entitlements, pension-related issues, notice periods, and the specific eligibility requirements for participation. Aochamub emphasized that the intent behind these measures extends beyond mere cost containment, aiming instead to collaboratively identify solutions that are equitable, practical, and sustainable, while simultaneously minimizing the adverse impact on employees wherever feasible.

The Nafau Meatco salary negotiations are poised to be critical, though the union had not provided a response by the time of the initial report. Michael Mulunga, from the Independent Patriots for Change, offered a perspective on the situation, acknowledging the negative impact of the temporary salary reduction on employees' livelihoods. However, he also characterized it as a "step in the right direction" to avert more widespread job losses and a complete cessation of income for Meatco employees. Mulunga further urged the Ministry of Agriculture, Fisheries, Water and Land Reform to provide assistance to Meatco in navigating these challenging times, underscoring the broader implications for Namibia corporate restructuring employment and the need for governmental support. The discussions around Meatco employee benefits deductions and Namibia labour law salary cuts will be central to these upcoming negotiations.

Lawyers advising employers or unions in Namibia should note Meatco's proposed salary reduction and voluntary separation program as a precedent for navigating labour cost containment during financial distress. This case highlights key negotiation points such as statutory deductions, benefits, and eligibility for separation schemes under Namibian labour law.

Source: Original reporting via The Namibian