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Dear Editors,
The management and some senior members of Shell
Ethiopia are set to amass millions of Birr in
separation payment when the oil giant moves out of
Ethiopia. This may surprise many of you given the
exorbitant payment each management member is
entitled to. There is a simple explanation for this
"never heard of" separation payment in Ethiopia.
Ever since the company started its operation in
Ethiopia, it used to apply one formula when
calculating separation payments for its staff that
leave company service earlier than their retirement
date, for various reasons. This formula has been
used as recently as November 2006.
Around April 2007, the company has replaced this
formula with a new one: Less than 10pc of the
employees, most are management members, will get as
high as 40pc more than what they get if the old
formula were to be applied to calculate their
separation payments. Around 90pc of the employees
will get a much lesser payment; some will lose as
much as 70pc.
It may sound puzzling why the company does this to
the majority of its employees who have loyally
served it for many years. The answer is simple. The
company is set to save around 4.6 million Br by
applying the new formula (this saving is calculated
on the basis of the assumption that all employees
leave Shell). It means that the huge amount of
saving that will come from reduced separation
payment of the majority of staff will be split
between the local management and the company.
Shell is the third largest and richest company in
the world next to Wal-Mart and ExxonMobil. Its net
profit last year was over 26 billion dollars and it
is expected to earn over 28 billion dollars by end
of 2007. Out of the 28 billion dollar profit
expected this year, around 500,000 dollars will be
coming from Ethiopia, the saving earned by changing
the formula that has been in place for over 40
years.
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