Jobs to be lost in SA clothing sector but union says "Down with capitalist barbarism"

South Africa.
South African clothing companies will be closed but Cosatu says they will never give into the United Clothing and Textile Association or bosses who wish to exploit workers. Interesting Cosatu does not mention that the clothing union has an interest in a company that has operations in countries where it can "exploit workers even more ruthlessly."

Textile jobs in the firing line

April 29 2011 

Sandile Khanyile

At least 15 000 jobs in the textile sector hang in the balance as 1 200 workers are sent home and 2 000 more face the axe by next week in an ongoing audit by the bargaining council of companies adamantly refusing to meet the minimum wage requirements.

Of the 192 companies out of 416 audited this far, 68 companies have been found to be non-compliant with the deadline for 70 percent compliance by the end of March.

“I don’t know what the solution could be but people are losing jobs and by the end of May, when we finish the inspection, about 15 000 people would have probably lost their jobs,” Leon Deetlefs, the national compliance manager for the bargaining council, said yesterday.

There are 43 factories that have voluntarily shut their doors since the beginning of the year because they felt they would not be able to meet the 70 percent compliance rate. They employed 1 200 workers.

There are 192 factories which the bargaining council has inspected and of these, 53 percent were found to be compliant, while 68 factories were non-compliant.

Deetlefs said the 68 factories employed approximately 2 000 people. Of these, four factories have been shut down and the other 64 are expected to be closed next week.

“Two are in Durban, one in Newcastle and one in Qwaqwa. The council has done everything, and from the point of view of the council, the decision is final because we have already had two moratoriums,” said Deetlefs.

The total number of non-compliant factories is 416 and they employ at least 14 500 people. Deetlefs said these employers owed workers R86 million in short wages for the year September 2008 to September 2009.

Last year, it was agreed that factories must by the beginning of April start paying a minimum wage of R336 a week. This must increase to R465 by the end of the year and reach R516 by April next year.

Ahmed Paruk, the chairman of the United Clothing and Textiles Association (UCTA), which represents 300 non-compliant companies that employ approximately 28 000 workers, said the UCTA was considering taking the bargaining council to court if it continued to close down its factories.

He would not say on what grounds it would institute the legal action except to say “there are a lot of grey areas”.

Paruk said its members were not consulted when a decision to phase in the minimum wage was taken and their proposal for an entry-level wage was rejected.

“We are living from hand to mouth. The Department of Labour must take the red tape out of the labour law and the Department of Trade and Industry (dti) must provide incentives,” Paruk said.

Wayne van der Rheede, the deputy general secretary of the Southern African Clothing and Textile Workers’ Union (Sactwu), said the four factories that were closed down were the ones that were adamant they would never comply with the minimum wage.

“On the other 64, as Sactwu, we are busy analysing the information and we will have further discussions,” Van der Rheede said.

The Economic Development Department and the dti were not available for comment.

Reference: Business Report, 29 April 2011

COSATU's 2011 May Day Message

Patrick Craven

28 April 2011

Federation says there is growing anger at self-enrichment through misuse of public funds

Every year on May 1^st, workers around the world celebrate their victories, remember their fallen heroes and recommit themselves to the fight for a better life. May Day is a day to remind the world that the worker's labour is the wheel around which our world revolves.

It is a day to take stock of the gains made by workers and how far we have come in fighting for workers' rights and economic justice. All over the world, workers come together on this day to demonstrate their solidarity as workers and their support for socialism.

May Day commemorates the historic struggles of working people, and is recognized in every country except, ironically, the United States and Canada, the countries where it all started - in the fight for an eight-hour working day in the 1880s.

In our country, workers fought for many years for recognition of May Day as a special holiday. The first May Day celebrations were in 1904. In 1986, the five-month-old Congress of South African trade Unions staged one of the biggest-ever stayaways to demand recognition of May Day as a paid public holiday.

Shocked by this wave of worker militancy, P.W. Botha responded by declaring the first Friday in May as Workers' Day, a paid public day. COSATU announced that it would stop work on both the first Friday and the real May Day. Faced with this, the apartheid regime backed down and in 1987 recognised 1^st May as a public holiday. Today it is one of the 12 public holidays, which we celebrate in a thriving democracy.

COSATU will be celebrating this May Day by taking stock of the strides that the working class has made under a democratic government. This year we celebrate May Day on the eve of the 18^th May Local Government Elections. The central message that we want to communicate to all workers is that indeed under the ANC government, the lives of thousands of South Africans have been improved.

We have one of the world`s most democratic constitutions, a bill of rights, and a constitutional court which checks that the laws and courts comply with that Constitution.

Over 2.5 million houses have been built for the poor, giving shelter to over ten million people.

Six million households have gained access to clean water since 1994 and electricity has been connected to nearly five million homes.

In 1994, only 62% of households had access to clean drinking water - today 93% do.

In 1994, only 50% of households had access to decent sanitation - today 77% do.

In 1994, only 36% had access to electricity - today 84% do.

By 2010, 14.5 million people were receiving social grants. Of those, 9.5 million are children less than 14 years old (compared with 2.4 million in 1996).

This year the Child-Support Grant will be extended to children aged below 18 years, an additional 2-million children.

There been a gradual and progressive reduction of the pension age for men from 65 to 60.

The number of people on anti-retrovirals has increased, and a campaign launched to treat 15 million by June and to urge workers to get tested.

We have every reason to celebrate what we have achieved, but the struggle for workers' rights did not end on 27^thApril 1994. Whilst we have made major gains in winning political rights and certain social rights but in absence of a viable economic system that can reward those who produce the wealth of this country, these gains have amounted to mere drops in the ocean of class struggle. Workers still need to mobilise on 1^st May and beyond to confront the many challenges we still face and increase the tempo of the struggle for a just and equitable society.

We celebrate this May Day amidst continued working class suffering. The capitalist class in this country has immensely benefited from our hard won democracy. We are faced with a situation where our rights are at a risk of becoming meaningless due to the privatization of wealth in the hands of a white male minority.

Many of our rights have become paper tigers due to the lack of transformation of our economy.

It does not make sense to speak of the right to food when a minority of white South Africans have a monopoly over land ownership in our country.

We cannot speak of freedom of movement when fuel and transport costs rise higher than the working class wage.

We cannot speak of the right to health care when only a rich minority benefits from a state of the arts health system whilst many of us languish in the public health care system with long queues, shortage of equipment and supplies and filthy wards. 

We cannot speak of the right to life when so many mothers die whilst giving birth and so many children die at the hands of our public health system. 

We cannot speak of the right to education when many black working class children learn in an unsafe, filthy and dilapidated environment.

Indeed we cannot speak of the freedom of association when many farm-workers are denied the right to vote by their racist white bosses.

On this May Day we salute in particular the farm workers of this country who till the soil and bear all forms of weather conditions in their work and endure the worst forms of abuse and exploitation. We are aware of the daily abuse, beatings, murder and rape they are being subjected to by the bosses. We are aware that the justice system is failing many of them. We are tired of racist magistrates who continue to give ridiculous low sentences to the murderers of farm workers. We call for the speedy transformation of the judiciary so that farm workers can have the access to justice that we fought for during the struggle against apartheid.

We also call on the working class to mount a struggle against the capitalists who have turned South Africa into their own republic - looking out solely for their interests.

One of the biggest challenges that we face as workers today is the rise of what been termed the working poor, through casualisation of labour and other forms of atypical employment. We are aware that as we celebrate May Day, more and more companies are pondering different options to casualise workers and further lower their living standards. We are deeply worried by the increase in the use of labour brokers. We know only too well that this practice has relegated many working class families to the doldrums of poverty and hopelessness. 

COSATU wishes to urge workers to step up the campaign against the further degradation of their working conditions and living standards. We are currently facing the threat of Walmart taking over Massmart stores, bringing their union-bashing tactics into South Africa and procuring products from wherever they are cheapest, regardless of the conditions of the workers producing them. This is putting the jobs of thousands more workers in manufacturing and other retailers in jeopardy.

The bosses keep moaning about our ‘inflexible' labour laws and the unions' stranglehold on the labour market. The bosses cling to labour brokers simply because they offer them an easy escape from respecting the hard won workers' rights bin this country.

Many want to pay the ‘market' rate of wages rather than sit down and negotiate in bargaining councils. A typical example is the KZN United Clothing and Textile Association who are refusing to pay workers even the reduced amount of 70% of the wages negotiated at the National Bargaining Council for the Clothing Industry, and threatening to move production to neighbouring countries where they can exploit workers even more ruthlessly. Trade unions can never submit to this kind of blackmail.

The crisis of unemployment must also inspire us to intensify our struggle against capitalist greed and destructive market fundamentalism. With unemployment rate of 36.6% when using the more realistic expanded definition - creating jobs, eradicating poverty and reducing inequality has to be the top priority for government, business and labour.

We welcome the publication of the Industrial Policy Action Plan from the DTI, the New Growth Path from the EDD and Minister Ebrahim Patel's recent report to parliament, which spelt out in detail how hundreds of jobs are going to be created.

There are many good short-term proposals, including such relatively simple tasks as filling vacant positions in the public service, employing young workers to fill pot-holes and creating ‘Green' jobs, such as the rapid installation of solar water geysers.

We totally agree with the government's aim to move away from the over-dependence on the export of raw materials to an economy based on manufacturing industry, and for the creation of five million new, sustainable jobs by 2020.

We have serious concerns however about the achievability of the NGP's longer-term targets.

There is no indication of how government departments will be equipped to implement the far-reaching proposals and for measuring and monitoring the targets.

There is a also a glaring contradiction between the ambitious, developmental goals and the very conservative macroeconomic policies, based on inflation-targeting, a strong rand and high real interest rates, which have been one of the main reasons for the crisis of unemployment. Yet such policies are now expected to be a key component of a policy to create jobs! This will simply not work.

We cannot rely on the private sector and market forces, to drive economic growth, in the hope that wealth thus created will ‘trickle down' to workers and the poor. Even developed countries are now abandoning this pro-market approach and taking drastic action to try to discipline the private sector, particularly the banks.

How much more do developing countries need to build a strong, dynamic, but also democratic public sector and developmental state to drive the agenda of the NGP?

We must be reminded of Oliver Tambo's words that a country that does not take care of its youth does not have a future. Last month's occurrence where four young black men were raped by their white bosses who also refused to pay them is a grim reminder of the incomplete nature of our freedom. Young people in this country are at the coalface of the social malaise that confronts us. They are without meaningful employment, are denied quality education, and languish in many of our prisons or simply die of the HIV/AIDs pandemic.

COSATU is adamant that policies such as the Youth Wage Subsidy will not resolve the structural barriers that prevent young people from reaping the fruits of our democracy. Such measures only serve to thicken the wallets of the capitalists whilst dividing and segmenting the working class.

Despite the inroads made by the ANC government in providing millions of South Africans with decent housing, the housing challenge is still persistent. Nearly two million families still live in shacks. The apartheid spatial environment is still untransformed and low income houses are still built on the periphery of cities and far away from our factories. Our public transport system is still inefficient and unsafe.

Workers do not have such a luxury called ‘free time' or leisure time. Whilst the rich in this country have all the time to play golf and take overseas holidays, workers are confined to the factories and toiling the earth with virtually no time to read and build their consciousness. Basic Services continue to be commodified and citizens have become clients of the neoliberal state. This is why we should not be surprised when communities take to the streets in demand of better services.

The horrific murder of Andries Tatane in Ficksburg which starkly revealed the ruthless way in which poor communities are repressed when they march for better services, must inspire us in our onslaught on neoliberalism. To us the murder of Tatane is a grim reminder of the link between police brutality against striking workers in Chicago in1886 and in Ficksburg 2011.

This May Day must revive our call for a new developmental trajectory in which the state drives development and directly provides basic goods and services as opposed to outsourcing everything to the "invisible" hand of the market.

Fuelling the anger of our poor communities is the growing evidence that a small minority of South Africans are not only growing incredibly rich but are doing so through corrupt deals or misuse of public funds. This is not confined to the business community which has always been based on a culture of greed, ‘me-first' and self-enrichment, but is mushrooming in our public service and revolutionary movement as well.

We call on workers to join the ANC en masse so that we can ensure that it remains biased towards the working class. COSATU will spare no energy in ensuring a sweeping ANC victory in the local government elections. We are already hard at work building and consolidating support.

We appeal to the working class to make use of their democratic rights and vote for the ANC. Boycotting elections or worse still voting for pro-business and anti-worker opposition parties will be a huge mistake. It would open a space for the DA to implement its anti-poor policies and pro-rich policies!

The struggle to build a new and better South Africa cannot be led by those who benefitted from inequalities, poverty and our oppression, and continue to pursue policies to entrench these injustices.

Next year our ANC allies will be celebrating their centenary. We wish them every success in the elections on 18 May and another hundred years of revolutionary struggle for freedom and democracy!

We call on workers to build working class organisations and ensure that they do not detour from the struggle for socialism. We appeal to workers wherever they are, to join and build a strong SACP and a strong progressive trade union movement.

We further call on workers to be active in our communities by making local government their preoccupation. Let us swell the ranks of school governing bodies, community policing forums, ward committees and hospital boards. We must be more in touch on matters that directly affect the working class. 

On this International workers day COSATU recommits itself to solidarity with our fellow workers under attack in Swaziland, Palestine, Western Sahara and Burma - and those fighting back - as in Tunisia, Egypt and Yemen.

As always too, on May Day we raise our red flag in honour of the countless workers who built and sustained our trade union movement over the years into the strong movement it is today. We salute all our forebears, living and deceased and dedicate the day to them and honour the sacrifices they have made by recommitting ourselves to the struggle for the liberation of humankind and a socialist world order.

On this May Day, workers must be resolved and say that no more shall we allow capitalists to use one of us against another and no more shall we be divided and defocused from championing our class interests. May Day is a day to urge all workers of the world to unite in the banishment of the agonizing chains of exploitation.

Forward to the National Health Insurance!

Forward to a Growth Path towards Full Employment!

Solidarity forever! Workers of the world unite!

The workers united will never be defeated!

Down with capitalist barbarism and forward to a socialist future!

Statement issued by Patrick Craven, COSATU national spokesperson, April 28 2011

South Africa imports clothing from Mozambique

One South African company imported over 500 000 items of clothing from Mozambique in just over a year.

Government Inspects Clothing Factory


Maputo — A Mozambican government delegation, headed by the Deputy Minister of Industry and Trade, Kenneth Marizane, on Sunday visited the Moztex clothing factory, in the southern city of Matola, following denunciations by Moztex workers of abuses by the management.


The accusations, made to Maputo Provincial Governor Maria Jonas, include lack of written labour contracts, shifts lasting for more than the eight hours established by law, wage injustice and deplorable working conditions.

In light of the seriousness of the accusations, Marizane's delegation included Labour Ministry inspectors, social welfare officials, and representatives of the trade union movement.

Moztex is owned by the Aga Khan Foundation for Development, and it operates out of the premises of what was once a gigantic textile company, Texlom, which collapsed over a decade ago.

The government team could see that Moztex is taking measures to protect its workforce. The workers have face masks to prevent them from inhaling dust and fibres, and the sewing machines are protected to avoid work accidents.

The factory employs 500 people, 90 per cent of them women. Moztex coordinator Alida Amade said the workers do have written contracts, and their monthly wage is 2,500 meticais (about 82 US dollars). This wage is miserably low, but it is not illegal. Three per cent of the workers' wages is deducted for social security contributions.

But only those who are actually working at the factory receive 2,500 meticais a month. Amade said that those who are still undergoing training merely receive an allowance that ranges between 1,000 and 1,500 meticais a month. She believed that this had not been properly explained to the workers, hence the claim that monthly wages ranged between 1,500 and 2,500 meticais.

"When we recruit workers, they first must go through a six month training period", said Amade. "During this period we pay an allowance which in the first phase is 1,000 meticais a month, and in the second phase 1,500. When these workers move into production, they receive wages just like the others".

Amade said the working day is from 07.00 to 17.00 with an hour's lunch break between 12.00 and 13.00. There is no overtime unless an exceptional volume of work demands it, and she claimed that when that happens, the workers are duly remunerated.

The ambassador for the Aga Khan Development Network in Mozambique, Nazim Ahmad, said that the factory insures its workers against accidents, and is equipping a first aid unit.

He accepted the concerns about working conditions in Moztex, since it becomes stiflingly hot inside the factory. He promised that fans and other air conditioning equipment would soon be installed.

To reduce the high rate of absenteeism among its overwhelmingly female workforce, a creche will be set up, Ahmad promised, so that mothers can bring their children to work.

For their part, the workers told the government they want a wage rise, and better working conditions. This includes the company providing breakfast, since they leave their homes early and make their way to the factory without eating anything.

At the end of his visit, Marizane said that the factory is working correctly. He said that difficulties in meeting expectations were only to be expected at the start of any activity. He called for dialogue between the workers and the company management to solve existing problems and avoid future conflicts.

"One way to solve your problems is to work hard", he said. "If you work, the company will make higher profits and thus will be able to offer better wages and working conditions. You should be committed and stop inventing excuses for not coming to work".

Currently there is no union at Moztex, and Marizane urged the workers to set up a trade union branch which could negotiate on their behalf.

Jessica Gune, general secretary of the National Union of Chemical and Allied Workers, assured him that steps to establish a branch of her union at Moztex are well advanced. She said training activities are being prepared so that the workers will understand their rights and duties under Mozambican labour legislation.

Most of the clothing produced by Moztex is exported to South Africa. From the start of production in September 2009 up to December 2010, the company put about 500,000 items of clothing on the South African market.

Because of the demands made by the South African client, the raw material is imported from China.

A consignment of 30,000 items of clothing should be dispatched to South Africa on Tuesday. It has been rumoured that these clothes bear labels saying "Made in South Africa" or "Made in Kenya", but Marizane could watch as labels stating "Made in Mozambique" were sewn into the clothes.

Moztex hopes to export clothes to the United States under AGOA (African Growth and Opportunity Act) as from May. According to Ahmad, the deal is almost finalized, and the company is now awaiting a firm figure for how much clothing its potential American clients wish to purchase.

"We are finalizing an export agreement for the United States", he said. "Our objective is to reach not just South Africa, but the entire world".

He was optimistic that Moztex could break into the US and the British markets, in which case "we are convinced that we shall triple our exports".

That would require Moztex to increase its capacity by installing more machinery, and hiring extra workers. Ahmad thought this implied investment of a further five million US dollars

Reference: Copyright © 2011 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).
Date: 19 April 2011

Clothing bosses must take a 30% reduction-SACTWU

South Africa

Comment: The clothing union, has now thrown into the current wage negotiations and ongoing debate around a new wage model a new proposal. Clothing bosses must now disclose their cost of employment and take a a salary cut of 30%. Only then, maybe would the union consider revisiting the New wage model that they rejected. As far as I know, this was never a condition in the discussions around the new wage model proposal. Contradictions continue to prevail. In a media report published on the 20th April 2011 (see link), AMSA stated they represented 70% of the industry. However, this report states that  nearly 47% of the industry is non-compliant. Clothing industry - Wage negotiations Tearing apart Claire Bisseker Thursday, 21 Apr 2011 With about 47% of employers noncompliant with minimum wage levels and other legislated benefits, any further increase in wages risks creating a fresh crisis as even more firms fall on the wrong side of the compliance drive

In the middle of a wage compliance process in the clothing industry, in which only about 40% of noncompliant firms have so far been able to make the first hurdle, unions are demanding hikes of 10%-17% to the minimum wage. The SA Clothing & Textile Workers’ Union (Sactwu) and compliant employers, represented by Apparel Manufacturers SA (Amsa), squared off last week for the first day of annual wage negotiations as if the compliance crisis were a mere sideshow. But with about 47% of employers noncompliant with minimum wage levels and other legislated benefits, any further increase in wages risks creating a fresh crisis as even more firms fall on the wrong side of the compliance drive. “Not only do we have to meet the phase-in requirements, but now we’ve got the wage increases on top of that. It will put firms under even more strain,” says Renato Palmi of the United Clothing & Textile Association (Ucta) , which represents noncompliant firms. The compliance drive is back in full swing after a moratorium was imposed late last year, giving noncompliant firms until March 31 to begin paying 70% of the minimum wage. Firms then have to be 90% compliant by January 1 2012 and 100% compliant by April 30 2012. National Clothing Bargaining Council compliance manager Leon Deetlefs says only 40% of the formerly noncompliant firms inspected since end-March have been able to meet the first hurdle of 70% compliance. Based on his discussions with employers, he expects this to drop to about 30% as more firms are inspected . All those companies that have failed to meet the 70% deadline — out of an original 250 noncompliant factories employing about 28000 people — will be served with writs by the sheriff of the court and their assets seized. The council is ready to start executing writs in Durban, Newcastle and Qwa Qwa this week. This means that mass factory closures and job losses could form the backdrop to this year’s wage round in which the union is demanding an increase in the annual bonus equivalent to two weeks’ wages, among other things. But how can the clothing industry — one of the most precarious in SA — afford to legislate itself an automatic bonus for the year ahead, irrespective of industry or company performance? Sactwu general secretary Andre Kriel says an annual bonus is not a gift but rather “deferred wages” that should be seen against “ the obscene bonuses that clothing bosses earn, most of whom have a guaranteed 13th cheque and substantial additional performance bonuses”. Clothing workers earn the lowest wages in SA’s manufacturing sector, he says. Furthermore, “the total cost of employment has been substantially reduced by the R1bn in government incentives made available to the industry during 2010”. Amsa executive director Johann Baard says government support has helped stabilise the industry and arrest the speed of the decline witnessed over the past three years. But, to really achieve a turnaround, firms need more industrial support, a new wage model, a scrapping of the 22% duty on fabric and more progress on customs fraud. For a compliant firm, the union’ s opening demand of an R80/week across- the-board wage increase translates into a 17,8% increase in the non metro minimum wage and a 10,8% increase in the metro minimum wage. This is steep, considering the Reserve Bank expects inflation to be at 5,7% in 2012 and the industry is shedding jobs. “Sactwu’s package of demands is close to a 20% increase in total labour costs, which is not only unrealistic but completely undoable, so we’re in for a tough round this year,” says Baard. Kriel defends labour’s position, saying its demands are based on the need to compensate workers for past inflation; offer protection against future inflation; narrow the wage gap between workers and clothing bosses; and claw back past injustices such as when the union agreed to cut wages by at least 10% in the non metro areas a few years ago in return for increased compliance and job creation, which never came. “The bosses never delivered on their promise ,” he says. “Why should we believe them now?” The two bodies that represent the manufacturers are pushing for an alternative wage model for the whole industry in which only new employees are paid the lower wage rates currently paid by most noncompliant firms. Existing workers would not be affected. But the union is not budging. “Though the clothing bosses see the solution as cutting the wages of already low-paid workers, they themselves are not prepared to take wage cuts,” Kriel responds. “The union is prepared to consider an alternative wage model, provided that clothing bosses publicly disclose their total cost of employment packages and commit to taking a cut of least 30%.” For noncompliant non metro firms, the union’s proposed R80/week increase will add 28,5% to their R280/week/person labour costs. In the metro areas, it will push wages up by 17,7%. But given that most Ucta members are adamant that they cannot meet even the 70% phase-in requirement because it is not financially sustainable , the stage is set for a massive showdown as the bargaining council starts closing down these firms. Government has been absent from the fray, leaving the union and employers to find a way out of an intractable situation. If it is serious about job creation, government needs to step in and find a solution that will prevent the mass destruction of livelihoods in the clothing sector.

Referece: Financial Mail, 21 April 2011-04-21 By: Claire Bisseker

Comment from the United Clothing and Textile Association

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, By Slindile Khanyile, 20 April 2011

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

Progressive Business Forum writes on behalf of clothing sector

South Africa
25 March 2011
To:

Hon Ambassador of the People’s Republic of China In the Republic of South Africa

CC: 

Mr Trevor Manuel, National Planning Commission                                                

Mr E Patel, Economic Development                                                         

Dr R Davies, Trade and Industry.

Plea on behalf of citizens of China and India and their workforces, victims of prosecutions by the National Bargaining Council for the Clothing Industry

The unrelenting prosecutions of the Council drove many manufacturers out of Durban and Newcastle to Lesotho and Swaziland.

 On their behalf and on behalf of those still in the RSA, this call is made.

The RSA are now partner in the BRICS alliance. Our BRICS status is seen as an international breakthrough with new growth opportunities which should create new jobs.

We are all eager to participate in this alliance and bring growth to the region and seeking goodwill in our international relations.

Sadly our manufacturers are still bogged down by out dated bargaining council regulations and labour laws.

It is not in the spirit of the BRICS partnership to drive factories to neighbouring countries and to operate in secrecy in back yards. These prosecutions are now threatening our international relations and should be brought to a close.

Our plea is for your intercession to free manufacturers to create the projected 5m jobs as anticipated by government.

According to a spokesperson of the National Council for the Clothing Manufacturing Industry, more than 80% their members are violating their regulations. The council is clearly not legitimate any more.

Factories moved to Lesotho and Swaziland and created more than 60 000 jobs in the clothing industry over there. Cape Town’s once thriving clothing and textile had shrunk from 70 000 jobs to approximately 7 000, a senior executive in a local textile company pointed out.

Our plea is for a situation where companies have the option to voluntary associate with these councils or to resort under the Basic Conditions of Employment Act. The majority of the workforce of the RSA falls outside of the scope of the Bargaining Councils and are covered by the BCEA. It covers an estimated 16m people, or 93% of the workforce. 

Financial ruin, emotional trauma, unemployment and poverty is caused by the prosecutions of the councils

·         Writs of execution

In October 2010 the council issued writs of execution to 385 factories with 20 000 workers and were set to close 55 factories with 8 000 workers in the first round.

·         The Sheriff was directed to attach and take into execution the movable goods of “POODLE CLOTHING” …to be realized by public auction the sum of R6 500.00 plus interest…... in terms of an award by the arbitrator”

·         To Circle Seven Trading 379CC for R90 001,06

·         Notice of attachment in execution

Circle Seven Trading 379CC- 12 Juki sewing machines, 3 Juki overlocking machines, 3 Kingstar sewing machines, 1 Toyota sewing machine, 1 Sirub overlocking machine, 1 Kingstar overlocking machine, 1 Presto press- estimated value R60 000,00

·         Clothing manufacturer Ziyaad Ally, of the Cape Town based Ally Fashions was found guilty of contempt of court and sentenced to 60 days in jail without the option of a fine. He was further fined R5 000 (or 30 days) in his personal capacity and ordered to pay the cost of the arbitration of R1 400,00.

·         The council has writs of execution against 386 companies for failing to pay minimum wages. An employer states that a number of companies had applied for exemptions, but the applications were declined without transparent reasons given. March 2011. 

The Natal Clothing Manufacturers’ Association warned in the media that 80 percent of clothing manufacturers could be jailed or their business closed down because they were not complying with gazetted wage agreements.

As a result 117 000 jobs would be lost. Mr Andre Kriel, at the time deputy general secretary of Sactwu, said the employer’s association had been party to a vigorous campaign to prosecute employers who were not complying with bargaining council agreement”. 

Burden of the bargaining councils

Bargaining council levies add 18% to the wage bill. Council levies and regulations are seen as a major restraint for SMME’s and are feared by new manufacturers and investors who are looking for tax breaks and trainable people, not regulations and levies!

Hidden employment costs, public holidays, leave, sick leave, family responsibility leave, other non productive time, and a 13^th cheque add another 33% to the actual wage bill.

It is known that the growth models of China and India are highly successful. Our local research proved that production increase with between 50% and 300% when payment is linked to production. The income of the workers increases accordingly.

Some of these factories were rescued from closure and afterwards able to export to sophisticated markets in Europe.

Who benefit from bargaining councils? A small “elitist” few?

It currently protects 500 000 workers, 2.3% of the total workforce.

It protects 2.5% of all employers in the RSA

Dated from 1914, the bargaining council is a colonial concept.  While many closed down some 41 councils still survive.  The Industrial Council system now protects only an elitist 500 000 union members, a miniscule 2.3% of our gross workforce.

Of an estimated total of 1.8m employers (companies, partnerships etc) only 98 285  (5.5%) are registered at the councils.

Of the 5.5% under the councils, 2.5% are voluntary members of the employer’s organisations party to the council and 3% are non party members who are forced to register at the council because they operate in industries covered by bargaining council agreements.

Levies, contributions, regulations and high minimum wages, discourage new entrants to these industries. It adds 18% to their wage bills.

The Freedom Charter- the choice between freedom, prosecutions or subsidies

The Freedom Charter proclaims that “the People Shall Share in the Country’s Wealth! 

All people shall have equal rights to trade where they choose, manufacture and to enter all trades, crafts and professions.

Section 200A of the LRA  flies in the face of this and of our constitution which guarantees freedom of trade.

In KZN job opportunities levels have reached an all-time low. Manufacturers moved to Lesotho, contributing to their 60 000 jobs in the clothing industry. It was lauded on BBC TV as a breakthrough for promoting jobs for women, while KZN are in dire need of jobs for women.

Legitimacy - more than 80% of the members of the NBCC are non compliant

At one stage more than half of the 1 239 local clothing factories did not meet the wage and working conditions agreed to at the National Bargaining Council level. According to the bargaining council for clothing, more than 80% of their members are non compliant. Thousands of factories are making a living as cottage industries, working undetected and in the so called informal sector, without registering, making this council further unrepresentative and illegitimate.

For many years we campaigned for a moratorium on prosecutions by the councils. The World Bank supported this plea in writing.

“War against poverty”

To quote from the ANC’s declared “War against poverty” calls for “critical interventions that should receive the highest level of attention from government in addressing poverty… economic interventions to expand opportunities for employment and self –employment…a   preparedness to step out of strait jackets in creatively searching for effective and sustainable ways of meeting the national objective to halve poverty by 2014. The challenge is to turn the high-level conceptual framework provided here into viable, phased programs”.

Furthermore the strategy aims to reinforce partnership at all levels among government departments and agencies, business, organized labour and other civil society and non-governmental organizations”.

Our local Indian and Chinese manufacturers and members are eager to partner in the “war against poverty” and with this plea offer our full cooperation.

Government has declared “Within government, over and above the current initiatives, it is about doing some things, differently as well as emphasizing implementation and coordination” . This enforces the DTI and BRICS initiatives.

Cottage or home industries play an important role in China and India. With this concept we can uplift thousands of unemployed females and change our economy and in the short run grow the economy at grass roots level.

Local Indian and Chinese manufacturers’ plea for amnesty to use this concept to be able to compete with importers on a “level playing fields basis”. Instead thousands of these factories are hiding in garages and houses, remaining as small as possible to escape the council inspectors.

Enforcement of bargaining council regulations is an invasion of business privacy

The constraints of bargaining council regulations are not only pricing us out of the market. For international investors it is a blatant intrusion of their privacy when their businesses is inspected, their staff interviewed and graded and when they apply for exemption, also to be required to open their books and lay bare their business secrets for a forum on which their business competitors and trade unions have access to their private information.

They will then find that the exemptions are normally refused. For international investors it reeks of uncompetitive practices.

Members on these councils hold powerful positions in the industry. The councils can direct and manipulate prosecution of their competitors.

Often the small, effective and profitable but vulnerable emergent manufacturers who produces innovative and niche products and create jobs, has no chance of survival and will often hear “we need to level the playing field”. Those rendering “Cut Make and Trim” services are at the beg and call of the big players and at prices decided for them.

Today’s technology and industrial espionage makes it risky for manufacturers to bare themselves for inspection by council agents, to uncover their intellectual property such as design, trade and copyright secrets. Their products can be copied, manufactured overseas and imported within days back to compete with them with their originators.

It also create a vantage point for big money to establish factories elsewhere  and import to the RSA and possibly manipulate the market.

The Chinese and Indian remuneration systems

Our research show that their remuneration system largely contributed to their economic success.  Their practice to pay per item produced; piece work, system teaches the worker the value of money and production; the cost of waste and how to satisfy the clients.

Empirical research by Cofesa in a large number of local Indian clothing factories has found that production increases with between 50% and 300%. This concept enabled one of these factories to export luxury shoes to Harrods.  It creates  sustainable businesses and the incomes of the workers increases accordingly.

Section “200A of the LRA, the Presumption who is employee”.

Since 2002 this international way of payment is discouraged by section “200A of the LRA, the Presumption who is employee”.

The presumption means that a person – also an “independent contractor” , like your plumber, electrician, accountant, salesmen, or tradesmen are presumed to be an employee until the contrary is proven. This means that you may have to appear at the CCMA or labour court and convince the commissioner or judge that a person is a contractor.

Many corporations such as the SABC-TV make use of thousands of independent contractors as artists, actors, musicians, writers etc.

This assumption is contrary to normal trade and international trade practice and -law and violates the right of the emergent entrepreneur and the unemployed to freely participate in the economy, for example to do work as seamstresses, designers or packers in a clothing factory.

 Calls from the IMF, the World Bank and prominent leaders for labour reform

The IMF solution

“ Job creation would benefit from a relaxation of restrictive regulation, reduced scope for centralized bargaining, a simpler minimum-wage system and streamlined dismissal procedures” the directors of the IMF said on many occasions.

The IMF, World Bank and prominent economists view bargaining councils as major restraints on economic growth and to small enterprises.

End of closed shop in Britain in 1990

British Prime Thatcher passed legislation to end the closed shop concept in 1990. Workers were no longer forced to become members of the “in house” trade unions if they are working at factories, party to the council.

Thatcher’s liberalisation leads to economic recovery and the enormous growth of the British economy.

Progressive Business Forum

As an employer’s organization, Cofesa represents over 7 000 employers in over 50 sectors of the economy. We are also long standing members the ANC’s Progressive Business Forum.

We are fully committed to furthering job creation, fair and productive labour practices and economic growth.

 Research done by Mr Menzi Yende and Hein van der Walt.

Mr Yende has more than 20 years corporate and entrepreneurship experience. He is the author of “Entrepreneurship Development, the way to go”

Adv Hein van der Walt has a trade union background and is a founder director of Cofesa. He has researched entrepreneurship over more than 20 years. He is the author of “Code for fairness and productivity” of which more than 150 000 copies were distributed to assist employers to comply with labour legislation.

 Member of PBF: Progressive Business Forum