South Africa is heading for a perfect storm as waves of retrenchments are flooding the country’s economy
Photo by: Reint Dykema
Analysis has shown that at least 45 000 jobs across 58 companies are already affected by staff reduction processes this year, trade union Solidarity said at a media conference, in Centurion, last week.
The union presented a report on the scope of the current retrenchment crisis in South Africa and introduced guidelines and support systems for employees directly affected by the crisis.
The report was based on the Solidarity – ETM Labour Market Index, media reports on retrenchments, surveyed Solidarity members and statistics from Solidarity’s call centre and legal services division.
The report revealed that an additional 160 companies, that employed Solidarity members, were considering retrenchment processes.
According to the report, compiled by Solidarity’s research institute, media reports and Solidarity members’ feedback have indicated that more than 220 companies may reduce their staff numbers this year or have already done so.
The mining sector was hit the hardest by retrenchments, with close to 20 000 jobs affected.
Solidarity’s report further revealed that media analysis showed that the telecommunications industry would shed about 9 500 jobs, and the South African Post Office (Sapo) would shed at least 5 000 jobs.
The report highlighted that government institutions and parastatals such as Telkom, Eskom, South African Airways, PetroSA and the Sapo jointly represented almost one-third of the 45 000 posts that were on the line.
Solidarity CEO Dirk Hermann said South Africa was heading for a perfect storm as waves of retrenchments were flooding the country’s economy.
Meanwhile, local employee confidence was at its lowest level since the first quarter of 2013, with Solidarity having handled 80% more retrenchment-related enquiries from its members in June and July, compared with the same period last year.
As a result of the predicted crisis, Solidarity presented an extensive emergency plan, including several aid projects, launched with its support organisation Solidarity Helping Hand, to limit the impact of retrenchment on the union’s members.
The plan also included four actions relating to retrenchment or downscaling to assist employers, unions, union members and nonunionised employees to deal with retrenchment-related matters.
The actions detailed in the plan were proactive measures to prevent job losses; sound legal process and fair procedure; alternatives to retrenchment; and measures to mitigate the negative effects of retrenchment.
Additionally, Helping Hand had two levels of priorities during a financial crisis.
The primary priorities include study aid for the children of Solidarity members studying at tertiary institutions, or planning to study in 2016.
“We want to prevent, at all costs, young people’s futures from being affected negatively because of their parents being retrenched. Therefore, we want to ensure that these young people’s dreams are not ruined and we want to assist with study aid where we can,” said Helping Hand CEO Danie Brink.
Further, during a retrenchment crisis, Helping Hand would distribute food parcels to Solidarity members and their families, as well as products for women and babies in need.
Financial advice regarding investment and using severance package funds would be dispensed to members.
Helping Hand would also assist with the optimal use of existing networks for medical expenses that may arise, as well as provide chronic medication to its members during a crisis.