South Africa
The Redress Consultancy comments:
Note the contradictions. Sactwu supports the closures because non-compliant companies create unfair competition. Amsa, that represents mostly larger compliant companies says most smaller companies cannot afford proposed wage increases nor the compliance regulations.  It seems the union has no interest in the loss of jobs as long as they continue with their drive to close down trouble makers.

Over 4,600 jobs lost after textile shutdowns

More than 4,600 workers in the clothing industry have lost their jobs since the National Bargaining Council started shutting factories after a deadline on minimum wages in April.

Factories have to comply with a December agreement that owners pay at least 70% of minimum wages from March. Factories should be fully compliant by early next year. Leon Deetlefs, compliance officer for the council, said 252 non-compliant factories have been identified so far after 523 factory inspections. 

So far 37 factories employing nearly 3000 people have been shut, while writs of execution have been served on another 102.

Deetlefs said 36 factories employing 1600 people had closed voluntarily since the compliance drive started. To comply with the 70% rule, factories have to pay qualified machinists R342 a week in non-metro areas and R518 a week in metro areas. Most factory closures have taken place in Durban, Newcastle, Qwa-Qwa, Isithebe and Ladysmith. The remaining non-compliant factories will be served with writs by mid-July.


While the Bargaining Council is shutting factories for non-payment of minimum wages, Sactwu is demanding wage increases of 14% in metro areas and 18.5% in non-metro areas, to be effective from September 1.

Andre Kriel, secretary general of Sactwu, said the union "supports the bargaining council's compliance drive. Non-compliance causes job losses at law-abiding companies that pay the legal wage". 

Kriel did not want to comment on the negotiations. When asked whether the wage increase demands are affordable for the industry, Kriel said: "Absolutely. Clothing workers are the lowest-paid workers in the whole of the manufacturing sector."

Baard said it was understandable that almost half of factories inspected "cannot even get to a 70% compliance level"." Factories cannot afford that, because we know what the retail price points are. If you pay wages above a particular level, you don't have a business." The industry body has said that a wage cut of about 30% is needed to ensure the industry remains sustainable. It also proposed a lower entry-wage for new employees, while other factory owners have asked for output-related pay to encourage productivity. Johann Baard, executive director of the Apparel Manufacturers of SA, which represents mostly large clothing manufacturers, said wage negotiations are continuing. 


The applicants argue that it is unconstitutional to extend Bargaining Council wage agreements to the applicants, who are not party to the wage negotiations. A group of five clothing factories from Newcastle and the United Clothing and Textiles Association has taken labour minister Mildred Oliphant and the Bargaining Council to court in Pietermaritzburg to fight the minimum wage rules. Only compliant companies can become members of the council, and membership fees are often unaffordable for small businesses. Oliphant and the council have yet to file opposing papers.

Reference; The Sunday Times, 26 June 2011