Thousands to lose jobs

2011-04-29 00:00

UP to 2 500 workers in the Newcastle textile industry are at risk of losing their jobs in May because companies in the area say they cannot pay the wages set by the National Bargaining Council.

For the past eight months the textile industry has been embroiled in a bitter wage dispute with the bargaining council.

The council has accused the Newcastle factories of failing to comply with the law while the factories say the wage demands are too steep.

The factories are currently paying their workers below the minimum wage. For instance, a machinist earns R280 per week, while the bargaining council resolution says they should earn R489. The factories were ordered to pay R342 per week — 70% of the minimum wage — by the end of March.

By December the factories should be paying their workers R512 and by April next year R569 per week.

Alex Liu, chairperson of the Newcastle Chinese Chamber of Commerce, said many factories are preparing to lay off workers and some have even started, while others are looking at relocating.

He estimated that about 30% of the 8 000 workers at 65 factories in the Newcastle textile sector would lose their jobs before the end of May. The owners could therfore afford to pay the remaining workers what the bargaining council has ordered.

“From the outset it was always clear that if the bargaining council insisted on their wage demands, there were only three choices,” said Liu. These were “to retrench the workers to be able to increase the wages of the remaining workers, to close the factories down and relocate elsewhere, or to close the factories down completely”.

Liu said one factory that employed about 120 people has already laid off about 20 workers over a period of four weeks.

His business has also submitted a retrenchment package to the Southern Africa Clothing and Textile Workers’ Union and is awaiting a response.

A factory owner who declined to be named said they have told their workers that they will lose their jobs to comply with the wage demands. “I have retrenched some of my workers to be able to pay the required wages for the remaining workers,” he said.

Ferdie Alberts of the Newcastle Municipality Economic Development unit said the pending retrenchments would be catastrophic for the town. “It will be very hard to replace thousands of jobs.”

Leon Deetlefs, national compliance manager at the clothing manufacturing industry’s national bargaining council said that while he had not heard that

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WHILE the unemployment rate in KZN was 19,8% at the end of 2010, the figure in the Newcastle area is reportedly much higher. Although the number of people employed in KwaZulu-Natal in the fourth quarter of 2010 rose by 38 000, the manufacturing sector in the province has had a tough time.

At the end of March 2010 the manufacturing sector in KZN employed 419 000 people. However, this figure had declined significantly by year-end to 371000, a workforce reduction 11,4%.

A trend of major concern is that 540 000 people were classified as “discouraged work seekers” in KZN, and 601 000 people were officially unemployed in KZN at the end of 2010.


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