Industrial company KAP Industrial has cut the salary of its non-unionized employees by 20% as part of larger steps to prevent the destruction of its liquidity by the state of restriction.
In a statement on the JSE news service, Sens, KAP says it will not declare a dividend in 2020 and will take steps to reduce operating costs and capital expenditure so that it can continue to pay its debt.
However, reference is made briefly to how it will affect salaries.
In a separate statement on the company’s website, KAP says especially employees who are not union members will feel the cost savings.
These employees will earn 20% less over the next three months and will not receive any increases or bonuses this year.
However, payment funds have been applied to provident funds for contributions to the funds for the duration of the salary cuts so that employees’ basic remuneration changes as little as possible.
However, union members’ salaries will not be cut. However, negotiations have begun to postpone any planned increases to those employees by 12 months. But where increases have already been agreed, KAP will only negotiate to suspend any related non-financial benefits for 12 months.
KAP is convinced that through its cost-cutting steps, it will ensure that it does not need to utilize its full borrowing capacity and will therefore be able to remain liquid over the next few months.
