“Retrenchments in South Africa are rife. We have the highest unemployment in the world, and our labour regulatory system did not support job creation,“ writes Michael Bagraim. File picture: Ayanda Ndamane /African News Agency(ANA)
“Retrenchments in South Africa are rife. We have the highest unemployment in the world, and our labour regulatory system did not support job creation,“ writes Michael Bagraim. File picture: Ayanda Ndamane /African News Agency(ANA)

Labour sector must consider all alternatives before retrenchment

By Michael Bagraim Time of article published May 20, 2021

Share this article:

Retrenchments in South Africa are rife. We have the highest unemployment in the world, and our labour regulatory system did not support job creation.

The Covid-19 pandemic and the lockdown exacerbated the problem. Many employers, across the board from small and big business, have the reaction to commence retrenchments immediately.

The government did need to implement an emergency scheme (Ters) and horribly messed this up with the most shocking administration. What should have happened was not to be.

People were supposed to have easy access to the UIF and were also supposed to be able to be accommodated under the emergency funding. In desperation the lockdown, which was a knee jerk reaction, caused employers to panic and cast aside all the basic structures within our labour law.

Retrenchments can only take place after adequate and successful consultations, and the act is clear; you need to consider all the alternatives available to us.

Unfortunately, the alternatives are not well known, and our Department of Employment and Labour should have effectively gone on a programme of education for employers and the trade unions. Unfortunately, the trade unions are just as guilty as they should have gone ahead with their own campaigns explaining all these alternatives.

For instance, we have a training lay off scheme, under the Department of Employment and Labour. This scheme is easily explained and accesses money from the UIF to pay some of the salaries to the staff and tries to educate staff to take other positions. This scheme is completely under utilised and almost unknown.

We have an entity known as Productivity South Africa. This entity can go into any workplace with over 20 employees and try to restructure the workplace to create more productivity and find alternative ways of saving jobs. Once again, this entity within the Department of Employment and Labour was under utilised and hardly spoken about at all.

Third, the Commissioner for Conciliation, Mediation and Arbitration (CCMA) can be utilised before the retrenchment programme by asking conciliators to go into the workplace to see if there is any way in which the workplace can be restructured and re-engineered to accommodate those who might lose their jobs. My understanding is the CCMA was not approached by any of the larger institutions or companies.

Innovative deals could have been done with trade unions and staff associations to save jobs. We merely had to have discussions where certain people would have agreed to voluntary retrenchment and others would have agreed to taking substantial salary cuts. This process was embarked upon in many cases, but not properly followed through in others. It is a sad day to see how many jobs were lost just because of the lockdown.

Our government could also have had a look at some of the other structures put up by other governments in other jurisdictions. Tax breaks were given to companies encouraging them not to retrench employees but to put them on furlough.

Many innovative schemes have been thought through, stretching from Europe to Australia and the US. Some of these schemes have been costly, but many others have called for minor changes in their labour law.

Our labour law is rigid and not structured in such a way to allow the bending of some of the rules. Trade unions in other jurisdictions have got together with industry structures to create scenarios where jobs were saved.

None of our bargaining councils followed through on these ideas. We need to blame the bargaining councils as well. Unfortunately, there were no systems put in place to be able to enter agreements which could have put aside the Labour Relations Act, the Basic Conditions of Employment Act and even the basic minimum wage legislation.

The rigid labour regulatory environment has not only stultified our thinking but has created a handbrake to job creation and forced a reaction to retrench. Hopefully, this lockdown will not be repeated, as the misery and destruction created will take us at least a decade to repair.

Hopefully, our government has learnt a lesson from this, and hopefully these lessons will give us a positive attitude to other situations of a similar nature.

We need to consider other forms of a-typical employment and we need to create jobs to fulfil needs as opposed to jobs in the strict traditional sense of 9 – 5 daily.

We cannot look at this as business as usual, and for every person who has been retrenched and finds themselves on the street, it means five others will probably starve. This is a disastrous situation and needs a careful re-think, immediately.

* Michael Bagraim is a labour lawyer. He can be contacted at [email protected]

** The views expressed here are not necessarily those of Independent Media.

Cape Argus

Do you have something on your mind; or want to comment on the big stories of the day? We would love to hear from you. Please send your letters to [email protected]

All letters to be considered for publication, must contain full names, addresses and contact details (not for publication).

Share this article: