Possible lockdown retrenchments are already soaring

More than 1 800 retrenchment cases have been referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) during the nationwide lockdown.

Data provided to the Mail & Guardian by the CCMA shows that 1 518 small-scale section 189 cases, and a further large-scale 323 section 189A cases, were referred to the statutory body between April 1 and June 25. 

These cases could affect more than 100 000 workers, although not all the workers in these cases will ultimately be retrenched. 

In the 2018-2019 financial year, CCMA intervention prevented 41% of workers who had been given section 189a retrenchment notices from losing their jobs. “The CCMA’s mandate is driven by legislation — to facilitate section 189a processes. Primary to the facilitation is to avoid job losses and, if [that is] not possible, to minimise job losses,” CCMA director Cameron Sello Morajane noted on Monday.

But the data is worrying.

According to the CCMA’s 2018-2019 financial report, in that whole year only 38 588 workers were the subjects of section 189a retrenchments. In the less than three months between April 1 and June 25, 98 818 workers were the subjects of section 189a retrenchments — an increase of 156%.

Workers in the retail sector could be hardest hit by the section 189a retrenchments, with 23 261 jobs at stake. Earlier this month, South Africa’s biggest clothing retailer, Edcon, issued a retrenchment notice affecting at least 22 000 workers.

More than 14 747 private transport workers could also lose their jobs, and the hotel industry, battered by the lockdown, could see 10 387 jobs lost.

South Africa’s unemployment crisis has been cause for alarm for some time now. But the Covid-19 pandemic — which could cause the country’s gross domestic product to contract 7.2% in 2020 — will likely see this crisis deepen.

The International Labour Organisation predicts that the pandemic will trigger massive losses in working hours, equivalent to 305-million full-time jobs, in the second quarter of 2020. 

In his supplementary budget speech last week, Finance Minister Tito Mboweni said “unemployment is our single greatest challenge”. 

In its worst-case projections, the treasury has forecast job losses of seven million.

The government has tried to stem the tide of this jobs bloodbath. By June 24, the Unemployment Insurance Fund (UIF) had disbursed almost R28-billion in Covid-19 relief from its temporary employer/employee scheme.

The money from this scheme was set aside to help prevent retrenchments in the wake of the national lockdown. 

But Minister of Employment and Labour Thulas Nxesi has warned that large-scale job losses are inevitable. 

At the end of May, as the country moved to level three of the lockdown, Nxesi said in a statement: “We expect an increase in labour-related disputes due to retrenchments and termination of employment as employers try to stay afloat.”

He added, however, that “retrenchments must be the last resort”. “We encourage employers to consult broadly when it comes to major decisions with an impact on job security such as intentions to lay-off workers.”

More retrenchments will put further strain on the UIF and the CCMA, which had to limit some of its operations at the beginning of the lockdown. Both entities have recently had to contend with Covid-19 outbreaks at their offices.

Early last month, when Nxesi told Parliament’s employment and labour portfolio committee to prepare for an onslaught of cases at the CCMA, he said the statutory body was already labouring under the increased workload after the implementation of the minimum wage

At the time of the May 12 meeting, the CCMA had received case referrals for only 17 large-scale retrenchments and 151 smaller-scale retrenchments. The large-scale retrenchments were likely only “the tip of the iceberg”, Nxesi said.

The CCMA’s increased workload, he said, would have implications for its budget.

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

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