NEWS & ANALYSIS

Teamwork needed to deal with job loss bloodbath - NUMSA

Union says future can only be realised by addressing issues of ownership and control of economy

NUMSA call son government to engage all social partners to deal with job loss bloodbath

13 August 2019

For immediate Release

The National Union of Metalworkers South Africa (NUMSA) calls on the African National Congress (ANC) government to move swiftly to convene an urgent meeting, with all social partners to deal with the crisis of the job loss blood bath. We are obviously irritated that government appears to be shocked by the recent statistics that have demonstrated that unemployment has moved from 27% to 29%. The expanded unemployment rate which includes those who have given up looking for work is now at 38.5%. This means the country is facing a national crisis.

For the past two decades, NUMSA has consistently maintained that both macro and micro economic policies that the ANC government has championed are directly responsible for the mess our country finds itself in today. However, one of the glaring challenges is the protracted investment strike that the private sector has embarked upon over the past two decades. This, coupled with the ANC’s neo-liberal agenda is directly responsible for destroying jobs, and severely de-industrializing our country.

NUMSA is dismayed by the opportunistic, looting nature and stance adopted by many companies in the private sector who exploit Section 189 of the Labour Relations Act where they rush to retrench workers using mechanisms to justify this agenda, such as restructuring and re-organizing. To appear to be compliant with the LRA, they cite operational reasons. NUMSA is very clear that this tactic of retrenchment has become a device, which employers are using to lay-off workers, purely to strengthen their balance sheet. Today’s global distressed economic situation and South Africa’s poorly performing economy, such as the contraction of the GDP in the first quarter of this year by 3.2%, is then used as ammunition by these companies to retrench workers.  

NUMSA is particularly irritated that whilst it is publically acknowledged and condemned that there is a lot of rot and corruption in the public sector, the same attitude is not adopted in the private sector. As a union, we have been witnessing corruption from big to small companies and across industries where it has become very easy for the owners of these businesses and shareholders to pay themselves exorbitant bonuses, owners taking out huge loans and then they file for business rescue. We are questioning the conduct and the motives of some business rescue practitioners. Whilst the noble objective of the Companies Act is for them to develop turnaround strategies for businesses and save jobs, some see their appointments as a God-given opportunity to use business rescue processes as a ‘get rich quick’ scheme for themselves.

From where we stand, there are no holy cows when it comes to corruption, both in the public sector and in the private sector. For instance, we are disgusted by companies like ArcelorMittal South Africa (AMSA). This is a company, which for many years, post-1994, repatriated huge profits out of this country using the device of import parity pricing.

This severely negatively hampered manufacturing and industrialization in the downstream industries. With a lot of money that was generated, they did not invest in the business to ensure that it meets the global demands of the future of work. Two years ago, NUMSA acted to defend jobs and manufacturing against the threat from China that was dumping cheap steel in our country. We pushed government to increase tariffs for eight AMSA products, and over and above that, we secured anti-dumping measures.

Of course this was done with government imposing conditions that this company would not be allowed to increase prices willy-nilly, and, it would not be allowed to retrench workers. There was an agreement about the formula that would be used to monitor their compliance, which was defined as a basket formula evaluating profits from products versus trends in the market. Obviously it was important to adopt such an approach to protect downstream industries.

Now, the very same company, which was cushioned by government, has the audacity to simply issue Section 189 and is threatening to retrench at least 1200 jobs. This is the very same company that has refused to honour the Constitutional Court judgment to grant contract workers employed by service providers, Real Tree Trading, Monyetla and others, permanent employment in the workplace. AMSA is refusing to implement this ruling, and it is refusing to ensure that contract workers enjoy the same benefits and conditions as workers who are employed full time by them. 

We are aware that AMSA, whilst pleading poverty, is also advancing its greed. Behind the scenes, it has put in a bid of R300 million for Highveld Steel’s heavy structural mill. This is why we are demanding that both the International Trade Administration Commission of South Africa (ITAC) and Department of Trade and Industry (DTI) should be directly involved in sharing information within the Section 189 consultation process of AMSA. What we want to understand is, what happened to the agreement stating that AMSA is not be allowed to retrench workers, or increase prices unilaterally as it has been the beneficiary of an increase on tariffs for eight products and a beneficiary of anti-dumping measures.

It is against this background that NUMSA is demanding that government must decisively intervene to stop what we regard as retrenchment patterns that are driven by the greed of the bosses to make money at the back of this global crisis and South Africa’s economic recession.

In the recent past we have witnessed an overwhelming trend of companies issuing Section 189 notices for retrenchment and restructuring. This is going to have devastating implications for workers and the surrounding communities. Among the many companies who have served NUMSA with Section 189 notices include, Hulamin, which will retrench no less than 200 workers. Metso will be closing, directly destroying 200 jobs, as well as backward and forward linkages. CBI will retrench 150 workers, Real Tree will retrench 151 workers and Group 5 Pipes will retrench 50 out of 60 workers, Hall Longmore will retrench all 176 workers in the closure of the plant in Vereeniging, Tube City will retrench 56 workers and Scholtz Industrial will retrench 10 workers. Trent Bridge Engineering has retrenched 11 workers. Krupp Engineering has also been issuing retrenchment letters. Super Care has issued letters of retrenchment. In Port Elizabeth, Lighting Innovation will be retrenching 30 workers and Continental Tyres have issued Section 189 notice, as well as Welfit Oddy. This trend is moving from big to small companies. Retrenchments in these companies and backward and forward linkages will lead to thousands of jobs of being destroyed.

Here, we should mention the Tsunami that is being championed by government that is going to destroy jobs is the privatization of all our SOE’s. For instance, with government unbundling and its full-blown implementation of the Renewable Energy Independent Power Producer (REIPP) Program in the immediate, an estimated 7 000 jobs will be destroyed at Eskom. If the IPP plans are implemented unaltered as they stand, no less than 100 000 jobs will be lost in in the province of Mpumalanga because of the closure of coal-fired power stations, which contribute to the local economy of that province. This has been confirmed by the CSIR and KPMG. We can also expect even more job losses at South African Airways, following the departure of former GCEO, Vuyani Jarana.

In the public sector, the minister of Public Service and Administration, Senzo Mchunu, is vowing to smash no less than 30 000 jobs. It is against this background that the

NUMSA NEC is calling on SAFTU and all Federations to unite all workers, regardless of symbols across all sectors of the economy to take to the street through a Section 77 socio-economic strike to defend Eskom and all SOEs. This strike is against privatization and, to take up the fight to defend jobs and fight for job creation.

Any movement from fossil fuels to renewables must strictly observe the principles of a Just Transition, and this Transition must take place at a pace the country can afford. That is why we are very firm that what our country needs is democratic, worker controlled energy mix, which is owned and controlled by the South African people. In debating the energy mix, there should be no holy cows in the interest of job creation and job security. Even nuclear should be debated.  

Against this background, NUMSA calls on the Presidency to convene all trade union federations, unions and civil society into a frank and honest debate with all social partners. This discussion must be facilitated by collectively agreed upon facilitators, approved by all stakeholders. Together, we must discuss job creation, and job security because these are issues of national importance, and find solutions.

To take this forward, NUMSA calls on the Presidency and the entire economic cluster to convene all stakeholders, who are interested in protecting the current capacity of manufacturing, in creating jobs and in championing the future of South Africa. Our future can only be realized by addressing the fundamentals in our economy, namely: addressing issues of ownership and control of the economy whose participation and benefits should include the African majority who remain economically marginalized, dispossessed and landless. Above all, at the back of South Africa’s mineral wealth and resources and at the back of the African continent and her resources, we must champion a job-led industrial strategy that must not only defend and create jobs, but also prepare us for the Fourth Industrial Revolution.

Aluta continua!

The struggle continues!

Issued by Irvin Jim, NUMSA General Secretary, 13 August 2019