JOHANNESBURG - LEWIS Group and trade union Saccawu are battling it out at the Competition Tribunal after the former retrenched hundreds of employees before acquiring high-end furniture retailer United Furniture Outlets (UFO) for R320 million last year.
However, the SA Commercial Catering and Allied Workers Union (Saccawu) is fighting the deal, saying about 400 employees were retrenched in 2016 to “smoothen up” the transaction.
Saccawu officials submitted during the Competition Tribunal hearing held in Pretoria on Wednesday that the retrenchments, which started in earnest in December 2016, were continuing in “different provinces of the country”.
The Cosatu union believed that Lewis Stores wielded the axe on employees as an attempt to reduce the duplication of functions once the merger was concluded.
However, the Competition Commission said this was unlikely, and it has also recommended that the Tribunal approve the merger on condition that the merging parties would not retrench employees as a result of the transaction for two years from the date of the merger.
Competition Tribunal chairperson Norman Manoim said what they did not have was the timing of the retrenchments in relation to the timing of the transaction.
But Competition Commission countered, saying it was unlikely there was a link between the two issues.
It said out of the 26 stores closed by Lewis Stores, only two were in the same town as UFO.
The Commission added that Lewis Stores intended to manage UFO, a cash furniture retailer with 30 stores, as a separate business entity within the Lewis Group. “There will be no employment concerns arising from that.”
The Competition Tribunal has to decide whether to approve the merger, approve it with conditions or prohibit it.
- BUSINESS REPORT ONLINE