South Africa
The United Clothing and Textile Association comments on the following newspaper report.
Clothing factories retrench workers
April 20 2011
Clothing factories based in Newcastle, KwaZulu-Natal, who face pressure from the government to comply with minimum wage legislation, had begun retrenching workers to make room for the pay stipulations, Newcastle Chinese Chamber of Commerce chairman Alex Liu said yesterday.
The latest step is an escalation of the wrangle over compliance with the minimum wage, which began about eight months ago.
Liu was unable to give any numbers, saying he had not conducted a survey but knew of factories that had begun layoffs.
Liu confirmed that his company, Simunye, was about to close down with the intention of re-opening and hiring a reduced number of employees.
He estimated that between 100 and 120 of the current 160-strong workforce could be re-employed.
“We are restructuring and everybody will be retrenched. We will recruit only skilled labour and it will be a majority of the people who were working in the old company,” Liu said.
Clothing firms in Newcastle employ about 8 000 people. The minimum wage increased to R336 a week at the end of last month and is set to rise to R465 by the end of the year and reach R516 by April next year.
Liu said most factories could not comply as the prices they received from the retailers had not changed. “If retailers will not increase their prices, it is almost impossible for factories to increase wages,” he said.
Wayne van der Rheede, the deputy general secretary of the Southern African Clothing and Textile Workers’ Union (Sactwu), said no retrenchment notification had been received from any of the factories.
Last week, the bargaining council for the clothing manufacturing industry began assessing the payrolls of 416 non-compliant factories to verify the scheduled 70 percent compliance level set for the beginning of this month.
Leon Deetlefs, the national compliance manager for the bargaining council, said yesterday that inspectors visited 47 factories and found that 61 percent were still not compliant.
“We have handed them over for the execution of writs. Closure of these factories should take about a week,” he said.
The Apparel Manufacturers of SA (Amsa) has proposed a new entry wage model, which it said would level the playing fields between complying and non-complying employers and create more jobs.
Amsa’s 250 members employ 70 percent of the nearly 57 000 workers in the industry.
The proposal was rejected by Sactwu, which said it would take wages back to 1986 levels. Amsa had suggested that a general worker be paid R220 a week in rural areas and R300 a week in urban areas.
A rural-based unqualified machinist would pocket R250 a week while one living in a metro would earn R350. A qualified machinist from a non-metro area would earn R280 a week, while the metro-based counterpart would get R450.
Johann Baard, Amsa’s executive director, said its failure to persuade unions to accept this proposal meant non-complying companies would continue to have an advantage.
The latest stand-off comes as Trade and Industry Minister Rob Davies said yesterday that his department’s programmes had had a positive impact on the clothing industry.
“Over 200 companies have utilised the Clothing and Textile Competitive Programme and Production Incentive, resulting in the retention of 40 000 jobs and the creation of 1 100 new jobs,” he said. -
Reference:
Business Report,
The United Clothing and Textile Association comments
Is the future of SA's clothing sector depended on workers' actions?
The United Clothing and Textile Association (UCTA), in response, to the article "Clothing factories retrench workers", Business Report 20 April 2011, does not wish to see such action being initiated by clothing companies in the wake of being pressured to comply to the phase-in wage agreement. Even though, the clothing union and the bargaining council were warned last year that companies may need to retrench workers to compensate for the wage compliance policy UCTA had hoped that a resolution would be achieved before further jobs are lost in the clothing sector.
Both the union and the bargaining council have admitted that the majority of clothing companies throughout South Africa are currently not compliant nor will they be able to meet the phase-in agreement. The UCTA firmly believes that there is space for a mutual and collective agreement, and the United Clothing and Textile Association will endeavour to pursue such a policy where an amicable accord that will not only protect jobs develop the clothing and textile sector but also create an environment where the union, the bargaining council and industry bodies such as the United Clothing and Textile Association can work in a mutual beneficial environment for the betterment of the industry.
The UCTA deems it is extremely short-sighted of the bargaining council to take action against companies which cannot meet the wage requirements due to a trading environment where manufacturing prices are pushed down but input cost continually increase. Furthermore, we believe such action is creating confusion not only within the industry but throughout South Africa's economic sphere where government talks about job and manufacturing creation.
Is the union willing to allow thousands of individuals to join the unemployed masses because there seems to be an unwillingness to find a solution to a situation that has been in existence for a number of years? At a recent meeting held with the union, bargaining council and AMSA, the United Clothing and Textile Association applied its collective mind in trying to seek and offer solutions to the current impasse. Sadly, these were rejected by the union and bargaining council.
Trade and Industry Minister, Rob Davies, says 40 000 jobs have been retained and a further 1100 jobs in the clothing sector were created through the Clothing and Textile Competitive Programme and Production Incentive. However, only a minority of clothing companies can access these incentives. Can you imagine the magnitude of job retention and growth if all role-players could find mechanisms for all companies to access these government programmes? Furthermore, we feel the figures stated by the Minister require further excavation. The Minister and the IDC need to inform us how many companies who have accessed these programmes have since closed or retrenched workers. These incentives do not erase the fundamental challenges the clothing and textile sectors face.
We also feel that it is disingenuous for the bargaining council to expect companies to meet the requirements of the phase-in agreement, when R90 million from the clothing workers' provident fund has been lost and there has been no or very little explanation as to how such a substantial and devastating loss could have occurred. How can the bargaining council and the union expect employers to meet wage increases and pay levies when there is clearly a governance problem within the bargaining council? In the wake of such revelations, surly a national forensic audit should be undertaken throughout the bargaining council to verify the security of workers' funds.
The United Clothing and Textile Association is collating the relevant documents in order to become an official employers 'association. UCTA has established an office in Durban. Furthermore, UCTA is informing its members and advising all clothing companies that they must register with the bargaining council. The UCTA has one of the largest law firms in the country acting on its behalf and it will make legal representation far easier for individual companies who are members of the United Clothing and Textile Association if they register with the bargaining council.
Alternately, it is the workers whose jobs are threatened who need to take control of their livelihoods and either accept that they may be out of a job or pressure the union, and their government to earnestly engage with industry bodies such as the United Clothing to find a sustainable way forward where mutualism prevails.
Written by Renato Palmi on behalf of the United Clothing and Textile Association
Date; 20 April 2011
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