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PnP shareholders should tighten their belts: Cosatu

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By Abubaker Abrahams

Trade federation Cosatu says it’s worried that the economic recession and “a crisis of profit” is being used by many of these corporate companies to retrench workers and erode workers’ rights. The union was responding to news of supermarket retailer Pick n Pay’s decision to cut 10% of their employees due to low profits and a sluggish economy. This means 3500 employees could lose their jobs through the company’s voluntary retrenchment package.

Founded 50 years ago, Pick n Pay has found it selves in a tight economic situation. Reports suggested jobs lost in all roles and functions across its Pick n Pay head office, regional structure, store operations and supply chain. Speaking to VOC, Cosatu spokesperson Western Cape Tony Ehrenreich said the union was not happy with the retailer’s first resort to retrench employees.

“At the outset we are really disappointed that the first move that Pick ‘n Pay tried to do was to cut staff to increase their profit level. This is unacceptable,” said Ehrenreich.

The retrenchment is voluntary and those that had accepted voluntary severance packages had received 1.5 weeks’ pay for every year worked as well as four-weeks of notice pay. Pick n Pay said the cost of the retrenchments will affect its profits in the six months to end-August but Ehrenreich further explained shareholders should also feel the effects, not only employees.

“The main issue always is that the profits are down and in difficult times in the economy the shareholders must also take the cut. They can’t just be getting the huge incomes they always received in the past. We want to see jobs prioritised, we want to see the shareholders tighten their belts for a change,” explained Ehrenreich.

Cosatu is also reiterating its call that retrenchments need to be made a matter for negotiations rather than consultation. This means changing the process in Section 189 of the LRA from one of “consultation with the aim of reaching consensus” to one involving negotiation.

“We acknowledge that changing Section 189 will not solve South Africa’s unemployment problems because this is an economic problem, but the fact is that dismissal for operational reasons is far too easy.
Employers fail to fully canvass the possible alternatives to job losses and they take little, if any, responsibility for the social costs associated with the dismissals. Employed workers must, however, bear the brunt of stretching their meagre wages to cover more and more unemployed dependants,” said Ehrenreich.

“Sometimes the retrenchments are purely motivated by extracting greater profits rather than saving an ailing business. Going forward, we shall be challenging the employer’s substantive decisions to retrench instead of only quibbling about the procedural issues during retrenchments.’

While the move of retrenching might help the company financially, Ehrenreich said Cosatu will continue to engage with the Pick n Pay to stop the job cut. He also said if the supermarket chain insists in retrenching employees, Cosatu will start shifting the clientele to companies that are preventing job cuts in financial strain. VOC


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