Star Knitwear: 906 Laid-off Employees Reach Final Deal After Tough Negotiations

On August 1st, the Redundancy Board, chaired by Rashid Hossen, concluded the agreement. A final deal has been signed to settle the case of laid-off employees at Star Knitwear Ltd. The settlement involves the company’s Receiver Manager, Mustaq Osman, and representatives of the employees.

Under the agreement, 906 Mauritian and foreign workers are officially recognized as laid off. This status allows them to access the Workfare Programme, which provides financial support until they find new employment.

Most employees had previously accepted a proposed settlement that includes:

• Payment of 15 days’ salary per year of service
• Pro-rated payment of unused leave and year-end bonuses
• Priority payment of their dues from MauBank and the Mauritius Investment Corporation when assets are sold
• A commitment not to pursue legal action after signing the agreement

Only about 80 employees requested additional time to consider the deal. These employees signed the agreement in the presence of the Redundancy Board, officially closing the case for Star Knitwear Ltd.

Employees and company officials expressed gratitude to Rashid Hossen for his efforts in negotiating this settlement, which involved several difficult rounds of talks.

Star Knitwear’s debts are estimated at around Rs 1.5 billion, with assets valued at approximately Rs 200 million.

Since the company previously received significant funding from the Mauritius Investment Corporation (MIC) and MauBank to stay operational, the Receiver Manager has been asked to investigate for possible misappropriation of funds.

As the company was unable to pay salaries, the Ministry of Labour intervened to ensure workers received wages through the Wage Guaranteed Fund, part of the Workers’ Rights Act. This fund can cover wages for up to three months.

Reacting to the outcome, Reeaz Chuttoo, head of the Confederation of Public and Private Sector Workers, welcomed the resolution.

He called on the government to settle the company’s debts with MIC and other institutions so that workers and the Receiver Manager can be paid first when assets are sold.

Chuttoo also expressed satisfaction that workers agreed to the proposed compensation of 15 days’ pay per year of service, along with reimbursement for unused leave and vacation leave.

He explained that the union supported this because the company lacks funds. Pursuing legal action for three months’ pay per year would have been futile, he added.

Source: Le Mauricien