The Congress of South African Trade Unions (Cosatu) suffered a double blow this week after the government and business refused to accede to its demands aimed at stemming a “tidal wave” of job losses.
This has raised fears that a crippling national strike is now inevitable.
Cosatu secretary general Zwelinzima Vavi confirmed with the Mail & Guardian that the union’s “job-saving” demands to government and business had been rejected.
A fortnight ago Cosatu tabled its demands, which include strong government measures to end the “overvaluation” of the rand and threatened strike action if they were not met. The union believes that the strong rand has “led to a flood of imports and undermined the profitability of the mining industry”.
A meeting between Cosatu and President Thabo Mbeki’s labour working group last week yielded no results. Similarly, talks between Cosatu and business at the National Development and Labour Council (Nedlac) last week did not bear fruit.
Vavi said the government and business were dragging their feet over resolving the job crisis and that the presidential working committee had not come up with “concrete” solutions.
Herbert Mkhize, Nedlac’s executive director, said the parties had deadlocked on issues raised. Business had refused to sign a code committing it to sourcing 70% of its products from local manufactures.
“They [the retailers] say there is no way they can sign a code, as this goes to the heart of how to run their businesses,” said Mkhize. “We have reached a point where the parties have agreed to disagree.”
Mkhize said Cosatu could only apply for notice to launch a socio-economic strike in terms of the Labour Relations Act if the matter was not resolved by next week.
Meanwhile, state arms company Denel, diary giant Clover and Anglo Gold’s Ergo revealed this week that they had either retrenched or planned to retrench a total of at least 3 000 workers. Leading gold recovery operation Ergo closed its East Rand operation last week, leaving more than 2 000 workers jobless.
The company was formed more than 25 years ago after Anglo American obtained mining rights from other gold mining companies on more than 50 disposal sites, mostly situated near the East Rand towns of Springs, Boksburg, Benoni and Brakpan.
Chris Wiseman, the senior human resource manager at Anglo Gold, said Ergo’s closure resulted from a number of factors leading to losses of R63-million over the past two years. These include low grades of gold-bearing material on the few remaining reclamation sites and a drop in income from gold.
The largely white trade union Solidarity, this week tabled some novel job-saving proposals on the release of its report on retrenchments.
Least likely to fly is the suggestion that managers take a 30% to 50% salary cut. More realistic proposals include:
- tax incentives for firms that create jobs;
- the obligation on companies to incorporate a social plan in their retrenchment programmes;
- an emergency fund, backed by the government and big business, which would support firms unable to afford social plans;
- financial support and advice on the use of severance packages.
Solidarity also suggests a retrenchment commission and tribunal to test the authenticity of disputed redundancies.
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.
Telkom “shareholder fundamentalism” also came in for strong criticism. Solidarity is particularly critical of companies that retrench workers in a difficult economic period with increased profits as the objective.
Clover’s disbursement of R62-million in dividends to its nine executive directors and top management, and subsequent plans to shed more than 10% of its labour force came under fire as an example of poor management.
Clover’s chief executive, Rob Wesselo, defended his company’s decision, saying the retrenchments stemmed from the changing market conditions in South Africa.
“It has become necessary to take drastic steps to make Clover more competitive and profitable,” said Wesselo.
Explaining the company’s decision to retrench, Denel’s Sam Basch said: “With about 60% of revenue deriving from exports, Denel is particularly hard hit by the strong rand exchange rate. Moreover, expected large international contracts with long-term prospects have yet to be concluded, affecting the business negatively.”