Johannesburg - Two main labour union federations are this week meeting with their affiliates to discuss a plan of action in response to looming retrenchments by major companies that would leave thousands of employees jobless.
About 10 big companies which are reportedly planning to retrench thousands of workers have been trending on social media. They include broadcasting heavyweight MultiChoice, Tiso Blackstar, Eskom, PPC and Standard Bank.
Last month labour expert advocate Tertius Wessels from Strata-g Labour Solutions warned about looming retrenchments for South Africa’s workforce as the country’s unemployment rate increased to 27.6% in the first quarter of 2019.
He said with the prevailing tough economic conditions, the widespread application of technology and the cost of labour, more companies are having to downsize or cut jobs totally to remain financially feasible.
According to Statistics SA, employment costs in 2018 contributed 14% of total spending (or R340 billion) for private and state-owned entities (SOEs). The bill included salaries and wages, bonuses, medical aid, life insurance benefits, pension benefits and other employee-related costs.
Cosatu spokesperson Sizwe Pamla, said the federation’s campaign meeting had been arranged for this week to discuss its response to these envisaged retrenchments.
“We will be convening a Cosatu campaign meeting to discuss what action we are going to take. Remember we had a strike earlier this year, in February, we tried to get government to sign a moratorium on retrenchments within the private sector,” said Pamla, while blaming government for setting a bad example for the private sector.
“We have companies that are realising that government itself has adopted austerity measures and is retrenching at SOEs and in the public service, and they too can act because no one will tell them to stop retrenching,” he said, adding that most of the companies that were retrenching were not in financial difficulties, but wanted to maximise profits.
“MultiChoice, for example, made up to R42bn last year so what is happening is that they are maximising profits and we have a government that is unable to tell them anything because it is also implicated and involved in these retrenchments,” said Pamla
He said the Labour Relations Act had to be amended as it allows employers to replace workers with technology.
“We have agreed to convene all of our affiliated unions and we also plan to meet all other federations to discuss this issue so that when we put together our response it is not just a Cosatu response because when these companies retrench, they don’t ask for your membership card they just send you home despite your affiliation,” he said.
Pamla also dismissed President Cyril Ramaphosa’s promise of 2 million jobs in the next 10 years during the State of the Nation Address, as “unrealistic”, “misguided” and “nothing but hot air”.
“You need a moratorium that prevents retrenchments from taking place in the public and private sector and we don’t have that you cannot say you want to create more than 200000 jobs per year and you already have 9 million people who are unemployed.
“It is just a misguided statement that tells you he does not have a plan because if he had one, he would understand that South Africa needs to create 50000 jobs per month in order to make a dent,” said Pamla.
SA Federation of Trade Union (Saftu) secretary-general Zwelinzima Vavi said Saftu was lobbying its affiliates to endorse the campaign of resisting the retrenchments.
“Numsa has submitted a section 77 notice (that if workers’ demands are not met the employer should be prepared for a general strike) about Eskom we have convened a special PIC (Public Investment Corporation) meeting which is a political and ideological formation lobbied by us to endorse the campaign that is the only way out of this crisis but then we are looking at broadening that and its not just about Eskom, which is where the biggest job losses will come from. When it closes the five power stations in Mpumalanga, you are going to see 90000 to 120000 jobs disappearing.”
Vavi also called on unions to unite in fighting the retrenchments. He said the country was “in the middle of a worsening crisis”.
Political analyst Professor Somadoda Fikeni said the government had to counter some of these failures in the economy by being “more radical” in creating conditions for investment.
“If you retrench, any number has a cumulative effect of a negative outlook that could lead us to be downgraded. But of course thousands of job losses can be offset if government were to move faster on some of the issues which will help create small businesses which can absorb the numbers of people faster - especially young people. For example, in tourism, if you make your visa regime easier for your targeted areas, it is said that for every tourist seven jobs or business opportunities are created,” said Fikeni.
When companies begin to utilise modern technologies in line with the Fourth Industrial Revolution, routine jobs are being automated by artificial intelligence-powered machines and this would obviously “add to the numbers of the unemployed’, added Fikeni.
He said: “Government could create conditions which may make it easier for companies to invest in the townships, and for our own local investors to invest without the bureaucratic system, the red tape, that we currently have. And also by injecting in a targeted manner, some of the projects that stimulate small businesses, because small businesses create more jobs as they are labour intensive. These businesses, like Standard Bank, tend to be capital and technology intensive rather than labour intensive.”