DOLE backs SAWO retrenchment move

CEBU, Philippines – The Department of Labor and Employment supports the retrenchment program imposed by Sauna and spa heaters maker, Sawo Incorporated (SAWO) as the company suffers a 39 percent drop of sales as its primary markets abroad succumbed to financial meltdown.

SAWO legal counsel Deolito Alvarez said in a press conference that economic concerns are the main reason why the company resorted into massive retrenchment program, which is corroborated by the DOLE.

“SAWO’s products are luxury items, in a financial crisis luxury products are the first to be affected. Compared to cars, one can live without Sauna, [while others cannot live without car],” Alvarez said explaining that even the car makers in the world are now experiencing hardest times in history.

Saunas are used both for recreational and therapeutic purposes, with most people utilizing them as a relaxation tool that provides additional health benefits.

SAWO adopted a DOLE-assisted retrenchment program few weeks back, in order to survive amid the low-order season, unfortunately, this issues is being rode down by the company’s battle against its former stockholder who is facing administrative and legal case versus the company.

“The retrenchment of some employees of SAWO is a legitimate exercise of management prerogative under our labor laws. Like all export business in the Philippines, SAWO is suffering from declining sales due to economic meltdown in its major market like the United States, and resulting global financial crisis taking place in Europe, Japan, Australia and elsewhere in the world,” Alvarez said.

A total of 52 employees of SAWO or 47 percent of its total regular workforce were affected by its retrenchment program, while another 32 contractual workers are also terminated.

Alvarez said times are hard, just like any export firm right now, in order for the company to survive and continue its operation although orders are declining, it has to implement a retrenchment program, that is duly approved and even assisted by DOLE.

Prior to the formal retrenchment program, the company had already been adopting forced leave and compressed workdays, as preventive measures to cope with the slowdown.

This time, when orders are getting thinner, the company had decided to cut-off some of its manpower. Although, Alvarez said the SAWO is not planning to eventually close down its plant in Mactan Export Zone (MEZ).

Retrenched workers are offered an attractive pay package, equivalent to one month worth of salary a year. Payment will depend on how many years an employee has been working with the company.

“We are only reacting to the market forces,” Alvarez said adding that SAWO still has orders for Sauna, Spa heaters, and other sauna equipment but volume is significantly dropping so that it is already impossible for the company to maintain over 100 regular employees and some agency-managed contractual employees.

SAWO sauna brand was established in 1994 by Veikko-Matti Kallioniemi in Hong Kong. It is incorporated in 2000 and was granted registration to engage in the manufacture of sauna and spa heaters, steam and related equipment and accessories at MEZ-II, as an economic enterprise.

It is wholly-owned subsidiary of a foreign company Raffles Square Limited, a Hong Kong registered company which owns 90 percent of the total authorized capital stock.