/ 17 June 2009

Labour court rules against GMSA

The Labour Court ruled that General Motors SA contravened regulations when it retrenched more than 200 workers without following proper procedures.

The Labour Court ruled that General Motors SA (GMSA) contravened labour regulations when it retrenched more than 200 workers without following proper procedures, a union spokesperson said on Wednesday.

The affected employees would, however, not be reinstated.

”The court said the process was not in line with the Labour Relations Act,” said Mphumzi Maqungo of the National Union of Metalworkers of South Africa (Numsa), which brought the application against the motor company.

The union had argued that the company violated the Labour Relations Act when it did not consult with workers before retrenching them.

GMSA has previously said it did consult and had tried to avoid retrenchments.

”With the economy as it is, obviously there are going to be retrenchments,” said Maqungo.

”We never said there should never be retrenchments, but the law must be followed.”

He said although workers would not be reinstated, they would receive compensation.

The South African Broadcasting Corporation (SABC) reported that Judge Andre van Niekerk ordered both parties to file a compensation application.

General Motors in the United States filed for bankruptcy protection at the beginning of June saying it had $172,81-billion in debt and $82,29-billion in assets, Associated Press reported.

Like many other car companies it faced falling vehicle sales in a difficult global economic climate.

It was closing plants in the US, where it also planned to cut 21 000 employees and reduce its 6 100 dealers by 2 600.

The South African company was expected to issue a reaction to the Labour Court ruling once it had seen the order. — Sapa