BL Premium reports that the Competition Commission (CC) will tell the Constitutional Court (ConCourt) in November that the SA arm of Coca-Cola Beverages Africa (CCBA) conjured up a plan to get rid of workers after a 2016 merger, thus contravening one of the key conditions set by authorities in allowing the deal to go through.
The merger created the continent’s largest bottling company. In an affidavit filed with the apex court, the CC claims Coca-Cola’s domestic unit breached merger conditions by retrenching 368 employees in 2019. One of the key conditions for the deal getting the nod was that the merged entity would put a freeze on layoffs for three years. “What is clear is that CCBSA had devised a plan in terms of which it would render a number of roles redundant, retrench all the employees that occupied those roles and immediately refill those roles but pay the new recruits minimum wage. In truth, therefore, the roles were not redundant; they were merely labelled ‘redundant’ so as to retrench the existing employees and replace them with new recruits willing to accept less favourable terms,” the affidavit, deposed by the CC’s Luke Rennie, reads. Following the 2019 retrenchments, the CC issued CCBSA with a breach notice, opening the door for a possible revocation of merger approval, administrative penalty and/or an order to disinvest. CCBSA tried unsuccessfully to get the Competition Appeal Court to set aside the notice, a decision that will now be for the ConCourt to rule on. CCBSA is expected to tell the ConCourt that it was not in breach of the merger conditions and that the retrenchments were not due to the merger but operational, which was allowed in the law.
- Read the full original of the report in the above regard by Kabelo Khumalo at BusinessLive (subscriber access only)
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