The trade union Solidarity is urging the adoption of an emergency plan to stem the tide of retrenchments, which it blames to a large extent on the strong rand.
The union on Wednesday unveiled a 10-point emergency plan at the release of a report on retrenchments in South Africa compiled by its economist Lullu Krugel.
The report investigates the reasons behind the current retrenchment of more than 20Â 000 employees in at least 26 companies in South Africa — the hardest hit of which is the mining sector, followed by the engineering industry, the telecommunications industry, the chemical industry and agriculture, but with the textile industry now also seeing a substantial number of retrenchments.
According to Solidarity, between seven and 11 dependents are affected each time a job is lost, meaning that the lives of more than 100Â 000 people are being affected by the current wave of retrenchments.
It argues that if South Africa were to suffer a natural disaster, a state of emergency would be declared and special emergency plans would be implemented to assist the victims.
“The current wave of retrenchments constitutes an employment state of emergency, which is why Solidarity is calling for the implementation of an employment emergency plan. The emergency plan demands, among other things, an obligation on companies to incorporate a social plan in their retrenchment programmes,” the union says.
The trade union also proposes an emergency fund.
“The fund will have to enjoy government support, and big business, and companies that truly cannot afford a social plan will be able to apply to the fund for assistance in establishing a social plan. A retrenchment commission and tribunal to test the bona fides of contentious retrenchment programmes are also proposed.
“Solidarity also wants moratoriums on retrenchment at companies that are not under financial pressure to lay off staff. The trade union also proposes tax incentives for companies that create jobs or try to retain their workers. Another proposal is that the salaries of top management be cut by 30% – 50% and that the excess be deposited in the emergency fund.”
According to the report the main reasons for the current wave of retrenchments are the “strong rand, international competition, shareholder fundamentalism, greed and poor management”.
“Mining is the industry that is hardest hit by the strong rand. Fluctuations in the exchange rate have dealt a severe blow to profitable production in this industry,” it asserts.
Telecommunications giant Telkom’s shareholder fundamentalism also came in for strong criticism. The report is particularly critical of companies that retrench workers in such a difficult economic period with increased profits as the objective.
Dairy giant Clover’s disbursement of R62-million in share profits to its nine executive directors and top management and its subsequent plans to get rid of more than 10% of its labour force also came under fire, as an example of poor management.
In addition to the emergency plan, the report suggests that other economic instruments be employed to prevent retrenchment. These include a realistic valuation of the rand and a conference to discuss the rand’s position. Local production and consumption, as contained in the idea of the Proudly South African campaign, must also be encouraged, it says.
Solidarity also urges greater support for the agricultural sector to counter the effect of subsidised agricultural products. The philosophy of interest holder capitalism rather than shareholder fundamentalism must also be promoted, it argues. — I-Net Bridge