KAP Industrial cuts salaries due to Covid-19
Employees that are not covered by bargaining councils will receive a 20% pay reduction
KAP Industrial, which has automotive, chemicals and logistics businesses, has cut the salaries of some of its employees by 20% for three months to shore up finances during the Covid-19 pandemic.
The cuts will affect employees not covered by collective bargaining agreements. They will also not receive an annual inflation increase for the period between the end of July 2020 and the end of June 2021.
Negotiations have also been initiated through relevant bargaining council and union structures in a bid to postpone wage agreements that have not been implemented for 12 months, the group said.
Where wage agreements have been implemented, the company is looking to suspend all non-financial benefits for 12 months.
The group did not go into details with regards to how many employees the salary reduction would affect, but according to its 2019 annual report, of its 15,249 SA employees, 56% were unionised.
KAP said it is taking the measures to avoid the possibility of mass retrenchments, and said it is “highly unlikely” it would pay a dividend in 2020.
In afternoon trade, KAP’s share price was down 2.62% to R1.86, bringing its year-to-date loss to 55.71%.