Economics & Labour

Massive retrenchments in the pipeline?

This is the view expressed in a study published by Solidarity, and entitled ‘Towards a Labour Recession’.
Solidarity predicts massive job losses, with unemployment rising from 23.1% to possibly as high as 25% in 2009. it also claims that in small firms, employers try to circumvent the proper procedures, as well as using the downturn as a means of dealing with poor performance.  It claims that ‘non-unionized workers experience a negation of their rights during a labour recession’, and suggests that the only real chance of security lies in joining a union.

We would disagree in the main with this very gloomy prediction.  Certainly South Africa cannot expect to dodge the bullet, and it terms of our own figures there has been, and continues in this quarter to be an increase in the incidence of retrenchments, but we are of the view that there is already a degree of flexibility in the labour market to cushion the immediate retrenchment option, provided by outsourced labour.

This, however, is a double edged sword, and there is increasing pressure from unions upon government to end labour broking.

We cannot see this happening, but it no doubt presages some form of increased regulation of the outsourcing business, - which in itself is not a bad thing.

Employers with unions can expect pressure at this years wage negotiations for both a moratorium on retrenchments, as well as a halt to the use of brokered labour.