A leading employer body of clothing makers, Apparel Manufacturers of SA (Amsa), has approached the Labour Court in Durban to compel the clothing industry bargaining council to shut down 400 non-compliant factories. This is threatening 21 000 jobs.
The court action comes after Amsa, which represents five out of six employers in the apparel sector, failed to reach a wage increase agreement with the Southern African Clothing and Textile Workers’ Union (Sactwu) last week.
The union, which claims to represent 80 percent of clothing workers, referred the dispute to the bargaining council and requested a conciliation meeting, failing which clothing workers would go on strike.
Amsa said yesterday: “The court action was not our preferred solution, but since our proposed wage model has been rejected by the union we have no choice but to compel the bargaining council to deal with non-compliant companies.”
The association’s new wage model sought to set a lower minimum wage that would only apply to new workers. Sactwu rejected the proposal, saying that it would significantly cut the wage rates of staff.
“Wage rates in the clothing industry are bitterly low. In fact, clothing workers are the lowest paid workers in the whole of the (manufacturing) industry in South Africa,” the union said.
Yesterday Amsa executive director Johann Baard said the legal route would ensure that action was taken against the non-compliant companies.
It was not the association’s intention to close non-compliant factories, but if the unions considered the new wage model they could be saved.
“The proposed wage model will bring relief to the non-compliant companies. This will bring equality to all players in the industry,” Baard said.
Alex Liu, the deputy chairman at the United Clothing and Textile Association (Ucta), which represents a large number of non-complying companies, said 21 000 jobs would be axed if the Labour Court compelled the bargaining council to shut down such factories.
He complained that the body was not given the chance to take part in the wage agreement talks. “Non-compliant (firms) cannot afford to pay minimum wages unless the entire clothing industry, including retailers, realign their price points throughout the value chain.”
His association’s members preferred to pay their staff based on their level of production and also according to the geographical demographics.
Liu added that Ucta would soon hear a court decision on the review of the whole clothing sector. The court application, brought to court by Ucta against the Department of Labour, would be heard at the KwaZulu-Natal High Court in August.
In a statement, Amsa said that more than 40 percent of employees in the industry registered with the bargaining council were not remunerated in accordance with the minimum wage prescribed by the council.
Amsa members continued to suffer prejudice as a consequence of such double standards. “This prejudice is manifestly illustrated by the retrenchments among our membership as well as the continuing migration of retail orders away from compliant companies in the industry.”
The minimum wage for a machinist working in the clothing industry is about R481 a week. Non-compliant companies pay about R340.
Last year, the sector reached a breakthrough deal to bolster employment when it agreed on a special 30 percent wage cut for entry-level employees. However, Amsa announced last week that it was pulling out of the 30 percent wage cut deal.
Sactwu said just more than 5 000 jobs were lost in the sector in 2011, compared with the 11 000 jobs lost in 2010.
Clothing industry researcher Renato Palmi said the issue was not only about wages but about operational costs and productivity. He said all these legal actions would delay wage negotiations and might lead to high unemployment if non-complying factories were to be shut down.
He remarked, however, that lowering the wages would not ensure low-paying companies complied.
“The whole industry needs a review and for it to be a success it must compete on the same level.” Palmi criticised some employers, saying that they had no reason avoid compliance.
But Sactwu said the court action would not stall the wage negotiations as dates had been proposed for a conciliation meeting.
Sactwu general secretary Andre Kriel said the union was disappointed with Amsa’s action. “We are of the view that the employer body wishes to create a public sense of a major crisis, simply to deflect attention from their refusal to grant clothing workers a wage increase this year.”
He said Sactwu did not condone non-compliance but closing 400 factories could result in massive job cuts. The union had appointed attorneys to deal with the case.