Jacquie Golding-Duffy
The threatened strike in the clothing industry over wage increases will be disastrous for the already crippled sector, says labour analyst Gavin Brown.
The industry is on its knees, having suffered from massive closures, resulting in about 20 000 job losses in the past five years, he says.
With the industry in the middle of tariff reform, Brown argues the only alternative is a compromise by the union and employers.
Wage talks between the South African Clothing and Textile Workers’ Union (Sactwu) and the National Employer Caucus of the Clothing Industry (representing 1 200 factories) reached deadlock, with unions demanding a 10% wage increase, paid maternity leave, increased provident fund benefits, changes to the job grading system and better wage bonuses.
Sactwu is demanding a 10% increase and embarked on a strike ballot among its 100 000 members on Wednesday. It hopes to have results by Monday on whether or not workers are in favour of a national strike.
The strike will, however, cost the industry R15,5- million in lost turnover and workers about R6,2- million in lost wages each day.
Johann Baard, chief negotiator for employers and Seardel industrial relations head, says employers appealed to workers ahead of the national ballot to consider the consequences of striking and also the timing; President Nelson Mandela and industrialists were spearheading a foreign investment drive in Britain and Europe. He says Sactwu’s planned strike will further prejudice the future of an industry already on the brink of collapse.
Sactwu general secretary Jabu Ncgobo agrees the industry is going through hard times, but argues that workers are being forced into a strike because management refuses to meet basic wage demands. The wage increases, he argues, are far below the inflation rate, leaving workers virtually living below the bread line.
Ncgobo says employers could demonstrate their commitment to workers by upping salaries and agreeing to a substantial increase — at least 8,5%, to be topped up by a 1% provident fund contribution and another 1% bonus.
Baard says employers may go for an 8,25% increase, but more than this would be unacceptable.
Provident fund contributions depend on what workers and unions put into the kitty and this is matched by employers. Unfortunately, workers with long records of service in factories do not regard the benefits as sufficient to see them through their retirement.
Amina Baker worked in a clothing factory for nearly 30 years and received R6 000, while “Sharkey” Davids stayed with his company for 38 years and reaped a mere R4 100 from his provident fund.
Despite the heart-breaking stories, Baard says employers do care about provident funds and are committed to its improvement.
However, he argues that benefit levels stand in direct line to contributions made, adding that the blame for poor pay-outs can be shouldered by workers and unions on the one hand and employers on the other.
Baard sees the solution for better pay-outs in unions getting a mandate from members to contribute more in to the provident fund by, for instance, taking a portion of their wage increases and putting that into the fund.
Ncgobo says workers’ wage increases are so low they prefer the cash in hand rather than pumping it into a fund.
Sactwu’s ultimate goal is to have contributions from both sides at 7,5%, but contributions vary from region to region, from 3% to 5% of total salary contributed to the fund.
Baard says employers will commit themselves to providing incremental increases each year should workers during this round of negotiations give 1% of their increase to the provident fund, which he says, is a form of saving and investing.
Gavin Brown and Associates predicted in their collective bargaining survey for this year that the clothing and textile industry will have wage settlements between 7% and 9%.
With the industry in irreversible decline and Asian countries able to manufacture goods at a quarter of the price it takes to make goods here, coupled with low tariffs, the industry is destined to shrivel. Some analysts say the clothing sector will become a smaller industry with more competition in niche markets.
Baard agrees that if the current rate of decline is not arrested, the industry can be “accurately described as on the brink of collapse” because:
l It is in the middle of a programme of tariff reform, under the World Trade Organisation agreement;
l The industry is facing severe prejudice as a result of the daily inflow of illegal imports. “The imports evade the customs net due to the inefficiency of the Customs and Tariffs department and we find tons of finished garments are being dumped on our domestic market without any import duties.” This is killing the clothing industry.
But while Sactwu is conducting its strike ballot, employers are voting on whether to exercise their right to lock-out. In the Cape, with the bulk of clothing factories, 94% of employers have voted in favour of the lock-out clause.