Textile union opts for compliance over wage increases

Sactwu has abandoned its attempt to halt legal proceedings that could result in the loss of thousands of jobs. (Reuters)

Sactwu has abandoned its attempt to halt legal proceedings that could result in the loss of thousands of jobs. (Reuters)

Just three days after filing opposing papers submitted against an Apparel Manufacturers of South Africa (Amsa) application in the Labour Court, the South African Clothing and Textile Workers’ Union (Sactwu) confirmed it had withdrawn them.

The application sought to compel the national bargaining council to execute writs on more than 400 clothing and textile companies, which were said to employ about 21000 workers but did not comply with the minimum wage.

“Our opposition to the Amsa application has unfortunately created the false impression that the union condones noncompliance. That is not the case,” Sactwu general secretary Andre Kriel told the Mail & Guardian.

He said the union’s position had always been that every company had to adhere to the industry ­agreements.

Bargaining council
The basis of the ­opposition was rather that the ­application was premature because the matter was on the agenda of a bargaining council ­executive meeting scheduled for April, which was unilaterally cancelled by Amsa when it walked out of the wage negotiations.

“The meeting has not been reconvened, despite numerous indications from the trade union that we require it to be reconvened,” Kriel said.

Johann Baard, executive director of Amsa, said now that the case was unopposed, the court was expected to make a ruling in the next few days to hopefully force noncompliant companies to settle their debt of­ ­several millions owed to the bargaining council in unpaid wages and ­various employer contributions.

Companies in this deeply troubled sector would then be shut down and their assets seized and auctioned, Baard said.

Sactwu claimed the damage was nowhere near the reported numbers.

Proposed wage model
“Our initial information shows that the number of companies at risk is not even close to previous estimates,” Kriel said. “It is about 150 companies covering about 5 000 workers and we still have not finalised our verification.”

Baard said Amsa would not consider wage increases while its members still had to compete with companies that paid below the minimum wage – an estimated 40% of the industry.

Hence, Sactwu was faced with either a new wage model or companies would have to comply or be closed.

Sactwu, unwilling to accept the proposed wage model, chose the latter. “The union rejected the wage model and imposed wage demands on us,” Baard said.

Kriel said Sactwu was not opposed to changing the wage model. “We have agreed to change it many times. We are opposed to the downward variation of terms and conditions of employment. The proposed Amsa model amounts to that.”

Ahmed Paruk, chairperson for the United Clothing and Textiles Association, said the situation offered Amsa more political gain to force Sactwu to give in to a new wage model, because the “government can never allow this [closure of these companies] to happen”.

Paruk’s association represents 128 employers – most of whom are noncompliant – but is more concerned with an application it filed in the Pietermaritzburg High Court late last year, which requested a full review of the clothing and textile sector.

Confident of its case, Paruk said a ruling in the association’s favour would mean the bargaining council would dissolve and a new wage model would be introduced by the department of labour “and it will be substantially lower.”

Paruk believes the case is guaranteed to succeed. “The representivity of the bargaining council is one issue,” he said.

When the bargaining council’s representivity certificate expired at the end of May, the department of labour refused to issue a new one because the employer associations on the council represented less than 28% of employers covered by the council.

Paruk said the playing fields were not level, because major companies contributed to decisions made by the bargaining council and subsequently all companies were obliged by law to adhere to them. Larger compliant companies could still ask for exceptions, he said, but noncompliant companies had absolutely no say.

“We have made up our minds. Even if we lose this case we will take it on appeal,” said Paruk, whose ­association received R2-million in donor funding to help it to pursue the matter.

Although seemingly on opposite sides of the fence, Paruk and Baard have a common view of sorts: they both feel the present wage model is unsustainable.

“At this point we have priced ­ourselves out of the market,” Baard said.

Amsa members, consisting mainly of compliant companies, are struggling to combat costs and keep their heads above water. Clothing and textile conglomerate Seardel, for example, axed 1500 workers in the past three months, citing losses in its apparel business.

The department of trade and industry said, although labour matters and associated litigation did not fall within its mandate, it had encouraged companies that were noncompliant to take advantage of the clothing ­textile competitiveness programme to upgrade and become compliant as part of a win-win approach.

“Such an approach supports a race to the top that is based on product, process and people upgrading. As a consequence, labour productivity has been rising rapidly – by 73% between 2005 and 2010 in the clothing industry, and employment levels in the industry have stabilised.

“This is a far more compelling model than a race to the bottom to see who can offer the worst working conditions.”

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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