The Real Reason For Exxonmobil Workforce Downsize

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Yemisi Izuora

Decline in prices of crude oil in the global market and the Niger Delta crises which has significantly cut down Nigeria’s production has resulted in mass sack of oil workers in Nigeria.

This year also has been particularly challenging year for the Oil and Gas industry in general and for Mobil Producing Nigeria, in particular.

The profitability of the ExxonMobil affiliate has been the worst in recent history because while costs are down, revenue is down by almost three quarter, even while the company has spent more than its earnings to see that its contractors and employees are paid.

Some of the resultant effects on their business have included scaled down operations, reduced personnel, uplift project deferments and contract re-negotiations.

The company is therefore taking steps to ensure survival.

But ExxonMobil is prudent in pruning down its workforce as the employees impacted in the current downsize are only about 6 percent, and were offered an enhanced benefits package in excess of the provisions of the Collective Bargaining Agreement (CBA) signed with the in-house Union.

The company also initiated a post-employment support programs to support their transition period from the Company as part of the package.

The severance payments driven by years of service and additional redundancy gratuities are in some cases up to N350m (Three Hundred and Fifty Million Naira) for an employee.

Oriental News Nigeria gathered that for the total population affected, average payment per person hovers around N140m (One Hundred and Forty Million Naira).

The pay package, it was learnt covered redundancy pay of about 36 months basic salary, Settling-in allowance of up to 2 months basic salary, additional pay to address economic realities of up to 3 months basic salary, and Notice pay of 3 months basic salary.

On non-compliance with extant laws and agreements, levelled against the company it was gathered that neither the Nigerian Labor Law nor the Collective Bargaining Agreement (CBA) with the Union requires alignment between the Company and the Union in the event of redundancy actions.

The CBA (Clause 23b) states that ‘Whenever redundancy actions are contemplated, the Company shall inform the Association of the intended action and the Association may bring to the Company’s attention any problems that it believes are involved.

Similarly, the Nigerian Labor Act (Clause 20a) states that ‘In the event of redundancy, the employer shall inform the trade union or workers’ representative concerned of the reasons for and the extent of the anticipated redundancy’.

Inside source told our correspondent that despite this, the Company’s management engaged in discussions with the Union for over 3 weeks informing them about the extent of the anticipated action with a view to obtaining some understanding based on the challenges the Company has been facing.

The source said it was quite disappointing that because the Union disagreed with the Company’s notification, they abandoned the provisions of their CBA which specifically states in Clause 13b that ‘If a dispute arises during the subsistence of the Agreement, either party shall comply with the current law governing Trade Disputes in Nigeria and neither party shall resort to arbitrary strike action or lockout.’

Contrary to this, they embarked on actions that border on harassment of fellow employees, breach of security, health and safety protocols, destruction of the Company’s property and other actions that impacted the general welfare of all personnel including their members.

During the strike, the union shut down power to the staff clinic, and chased away medical personnel on duty, thereby putting the lives of patients at risk.

Unfortunately with total disregard for the laid down rules, even with the intervention of the Honorable Minister of State for Petroleum, Ibe Kachikwu who personally appealed to both the Union Chairman and Secretary, extending invitations for a meeting on December 20, the Union resorted to taking steps that might impact production activities within 24 hours.

Our source insists that the claim of hiring expatriates to replace Nigerians is far from the truth, stating that the company has actually demobilized 40 percent of its expatriates in the wake of the current challenges.

According to the source “We are at our lowest ever number of expats in country.” These actions have significantly affected not only their members and their Company as a whole, but the communities and states where the company operates and indeed the entire country which is grappling with sustaining oil production and obtaining the dollar revenue which has become a scarce commodity in these times.

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