Retrenchment bloodbath: 60 000 in the balance during the past year
26 April 2016
The jobs of approximately 60 000 employees in various industries across the country have been in the balance the past year due to large-scale retrenchment processes. This is according to new figures released at a press conference held by trade union Solidarity in Pretoria today.
Solidarity’s research shows that employees in the mining industry are hit hardest with 36 companies that have been engaged in retrenchments during the past year, and with 29 261 employees facing retrenchment in the industry. Second worst off is the information and communication technology industry with 8 141 employees at six companies being affected by retrenchments.
In addition, 24 companies in the metal and engineering industry have announced retrenchment processes since April 2015 involving around 7 918 employees, while six companies and 835 employees in the chemical industry have been affected by retrenchments. For a detailed breakdown of the various processes, click here.
Solidarity General Secretary Gideon du Plessis said during the conference that the number of workers eventually retrenched are but a drop in the ocean in comparison to the number of job opportunities lost in the wake of a formal retrenchment process.
“For example, in the mining 1,7 job opportunities are created for every permanent appointment made. In other words the moment such a person is retrenched, 1,7 jobs are lost. The situation in the manufacturing sector is much worse as four external jobs, including jobs at service providers, contractors and support services, are lost for every permanent job abolished.
Moreover, the number of employees accepting voluntary severance packages is increasing at an alarming rate as many employees have simply reached a saturation point with having to work amid such uncertainty,” Du Plessis said.
Solidarity Chief Executive Dr Dirk Hermann said that South Africa is in the midst of an almost perfect storm that is destroying jobs. Moreover, there is no sign that it will subside.
“The major factors that are fuelling the storm include unstable global conditions; Chinese surpluses; weaker local growth prospects; the changed structure of the labour market; and weak commodity prices. Political uncertainty sparked by the Nene debacle and political statements; systemic corruption and weakening investor confidence further contributed to the storm. To make matters worse new empowerment codes with totally unrealistic targets have been unilaterally announced for an already beleaguered mining industry,” Hermann said.
Hermann added that in such a crisis the single most important intervention by government is to create a climate of investor and business confidence. “South Africa’s dilemma is that President Jacob Zuma himself has become a symbol of a lack of confidence. As a result it is virtually impossible for government to do the single most important thing to calm the storm, and that is to create confidence,” Hermann said.
Solidarity’s emergency retrenchment plan
Solidarity has implemented an emergency retrenchment plan to assist its members affected by retrenchments. In terms of the plan Solidarity tries to avoid retrenchments in the first place, and secondly Solidarity sees to it that companies that are retrenching employees follow the correct procedure in terms of section 189 of the Labour Relations during retrenchment processes.
In addition, Solidarity offers financial and emotional support to its members during retrenchment procedures and it engages with employers to find other alternatives besides retrenchments. For example, it includes accommodating retrenched employees elsewhere in the company. Where possible, Solidarity tries to put its members who have been retrenched in touch with other potential employers. Click here to see the full plan.
Solidarity’s figures are based on press reports and retrenchment notices issued since April 2015 by companies where the trade union represents members. Most of the processes referred to above are still ongoing while some have already been concluded.
Issued by Dirk Hermann, Chief Executive: Solidarity, 26 April 2016
