The embattled South African Bureau of Standards (SABS) plans to retrench 170 employees in a R150-million cost-saving endeavour. The SABS was placed under administration by the department of trade, industry and competition in October 2018, and has since then implemented a three-year turnaround strategy. But the financial state of the institution has continued to deteriorate.
Jodi Scholtz, the lead administrator in the turnaround strategy, told parliament’s committee on trade and industry on 17 March, that the SABS group recorded a year-end loss of R74-million in 2020. The institution did not achieve its revenue targets and is below budget by R26-million.
“While there is progress in many areas of the business, the compensation of employees remain the highest cost item, sitting at 65% of the total operating expenditure. The decline in revenue due to loss of customers has further been exacerbated by the impact of Covid-19, rendering it unsustainable to carry the labour costs as currently structured,” said Scholtz.
A notice sent out to staff on 11 March reads that the SABS “ is currently contemplating reducing its headcount based on operational requirements (retrenchments). As such we would like to commence with the consultation process in terms of section 189 (3) of the Labour Relations Act.”
According to the notice, “there is a need to restructure in order to ensure efficient and effective operations of its business, and in so doing, achieve revenue growth and reduction in operating expenditure”.
In accordance with the Act, the SABS and the Commission for Conciliation, Mediation and Arbitration held discussions on 8 April to appoint a facilitator who will lead the consultation process.
The SABS has 832 employees.
Consultations with staff members are yet to begin and will explore alternatives to retrenchment. Employees will also be able to choose early retirements or voluntary separation packages.
Should the process continue, affected employees will be retrenched before or on 15 May.