Clothing industry dispute continues

South Africa
This is a rough translation from Afrikaans

Commentary from The ReDress Consultancy

How positions seem to have changed during the course of the past six or so months.  From reading this article we understand that it is now the clothing union, Sactwu that is reluctant to pursue the closing of non-compliant clothing companies that will result in massive unemployment. 

Is this politics at play - election time? Or, is the union considering a revaluation of the state of the industry?
And what is the real position of AMSA.  The organisation seems determined to now pursue legal recourse in shutting down non-compliant companies. Is there a solution?



THREATENED CLOTHING FACTORY WARS 

25 May 2012 Dewald Van Rensburg 

  Sake24  

Johannesburg. - The controversial shutting down of clothing factories that
do not pay minimum wages could soon be resumed.  

 
A total of 450 factories could be affected by this. 

 
Between them, these factories employ "10 000 to 12 000" people, a full fifth
of the employees registered with the sector's Bargaining Council" says Johan
Baard, director of the Council's largest employer group, Apparel
Manufacturers of South Africa (AMSA). 


A "phasing in period" for transgressors which was granted last year amidst
an inundation of factory strikes, expired at the end of April.  According to
AMSA, the doors of anyone not yet paying the minimum wage would be locked.  


He insists that the closing down of factories is not his first choice in
solving the problem.  

 
The possibility of shutting down of factories could lead to labour unrest in
the industry, as relations between AMSA and SACTWU, the union in the
Bargaining Council, deteriorated spectacularly this year. 


SACTWU does not agree about the phasing in period, and the  demands (Amsa's) that whoever
does not ascribe to the prescribed wage levels should immediately be shut
down.  The union has declared a dispute with AMSA.  

 
A third party shall therefore have to decide if the agreement implies that
the shutting down of factories must be resumed.  

 
Earlier this month the union said in a letter to AMSA that they "do not
share the employers' viewpoint that "there had been no way forward" to
reduce wage transgressions.  

 
To the contrary, compliance with prescribed wages had actually improved.  

 
The damage and rivalry between transgressors had caused AMSA members has,
according to the union, lessened and the time had come for less drastic
measures to be taken.  

 

AMSA also insists that it does not want to shut down factories, but says
that it has no choice as their members, who do indeed pay the prescribed
wages, would be undermined by wage transgressors.  

 
Since 2005 a number of shutting down campaigns have been put into operation
and at the beginning of last year the Council estimated that "between 200
and 300" factories had already been shut down since the National Bargaining
Council was formed a decade ago.  

 
However, without SACTWU's agreement the Council cannot carry out the
shutting down of factories.  

 
AMSA now intends to approach the Labour Court with an urgent proposal that
the standing agreement with the sector, which according to them indeed
compels the shutting down of transgressing factories, must be implemented
despite opposition by SACTWU.  

 
According to Baard the Court application has already been drawn up and is
expected to reach the Court within a few days.  

 
It is unknown how this will affect the dispute stated by SACTWU.  


Andre Kriel, head secretary of SACTWU, told Sake24 yesterday that the fate
of the factories which are still not paying the minimum wage would have been
discussed on 18 April at a meeting with AMSA at the Service Board.  "AMSA
unilaterally cancelled this meeting a day before it was scheduled" said
Kriel.  

 
Thereafter AMSA also unilaterally withdrew from a loan negotiation meeting
on 18 April.  

 
There is indeed an agreement that next Monday AMSA will furnish SACTWU with
a "new loan structure". For years AMSA has been promoting a system which
will couple wages to productivity, although yesterday Baard would not
disclose the proposed suggestions to SACTWU. 

 
WAGE PLAN IN CLOTHING SECTOR FAILS 

 
The agreement which was reached last year in the clothing sector to reduce
new employees' starting salaries in support of job creation appears to be a
total failure. 

 
To date only between 200 and 250 employees have been appointed in the sector
at the lower starting salary said Johan Baard, Director of the sector's
prevailing employer group, Apparel Manufacturers of South Africa (AMSA).

 
In this agreement the target was set that the employers involved would
increase the number of posts by 15% within 3 years, approximately 5400
additional posts.  Following on from this, by March this year there should
have been 3% more, or approximately 1000 new posts created.  


According to Baard this drawback was predictable.  

 
The new employees had soon become dissatisfied with earning between 20% and
30% less than other employees who are often doing the same work that they do
and who maintain the same productivity level, said Baard.  


This leads to one of two things: Either the employees leave the factory or
the employer eventually pays them the standard wage.  

 
The lower wages that were permitted for new employees ranged between R427
and R522 per week for machinists, the most common occupation within the
industry.  

 
This is in comparison to the R489 to R740 which would otherwise be
applicable. 

 
According to Baard, trade uncertainty is another reason why recruitment does
not grow in the sector.

Wage talks stalled

South Africa
Current clothing  wage negotiations have for the second time come to a halt.

Compliance snag halts textile wage talks

May 25 2012

Ref:  Business Report

Nompumelelo Magwaza

---

The clothing industry wage negotiations have hit another snag after the Southern African Clothing and Textile Workers Union (Sactwu) declared a dispute against the Apparel Manufacturers of SA (Amsa) during the second round of bargaining in Durban on Wednesday.

At the centre of the dispute are claims by employers’ group Amsa that the union had entered into an agreement with complying employers that full compliance with minimum wages would be achieved by the end of April this year.

Amsa executive director Johann Baard said the union was not prepared to confirm the agreement for the comprehensive enforcement of prescribed minimum wage in the industry. However, according to the 2011/12 substantive agreement, which was signed by seven employer associations and the union, there is no such provision.

Sactwu disputed this, saying the “agreement” was never part of any provisions made during wage talks last year.

Amsa, which is the majority employer body in the industry, made it clear that it would not engage in wage negotiations unless Sactwu dealt with non-compliant employers as set out in the agreement.

Sactwu said yesterday that Amsa was publicising false claims in order to escape its obligation to grant workers a decent wage increase. The first round of the wage negotiations came to a halt when Amsa walked out of a meeting in Cape Town last month.

It is understood that non-compliant employers, who are not party to the national bargaining council (NBC), pay their workers less than minimum wages.

Sactwu general secretary Andre Kriel said: “The union rejects this claim and has pointed out that there is no such provision contained in last year’s wage agreement. Despite the union having pointed this out to the employers, they have persisted in their public claims to this effect.”

The union has referred the dispute to the bargaining council for processing. It has asked Amsa to withdraw such claims and confirm that no provision envisaging that 100 percent compliance would be achieved by April 30 was contained in the 2011\12 wage agreement.

Amsa said this included the serving of the writs of execution currently held by the NBC against more than 450 non-compliant clothing manufacturers. Baard said if wage negotiations went ahead without Sactwu first seeing to these non-compliant employers, then the compliant employers would feel cheated.

“To do so would simply exacerbate the competitive disadvantage suffered by our members who pay the minimum wages, whilst those who break the law by underpaying their employees, continue to take business away from the compliant factories.”

Amsa also accused the union of engaging the KwaZulu-Natal Coastal Clothing Manufacturers Association in legal wage talks, saying the majority of its members were non-compliant.

“This gesture is severely compromised due to the fact that many of its members will pay the increase off a low wage base due to them not honouring the current wage levels governed by the NBC main agreement.” However, a representative from the association, Rajen Naicker, disputed this. He said the association was party to the bargaining council and that it had non-compliant and compliant members.

Amsa took a decision to provide the union with a detailed proposal regarding a new wage model for the industry by next week.

Further reading:

“The sector is fighting a losing battle against low productivity, skills shortages and high wages,” Manufacturing Sector.  Click here to read the entire article.

"The results of the much-trumpeted deal reached last year in the bargaining council for the clothing industry, in terms of which new employees could start on wages 30% lower than the previously agreed norms, have been disappointing: only a few hundred new employees were employed under the scheme nationally."  Click here to read entire article.

Belief in South Africa's Clothing Industry

South Africa

One year in, and Umuzi Clothing is a promising outfit

May 22 2012

Nompumelelo Magwaza

BUSINESS REPORT

---

Amid job losses and factory closures in the textile and clothing industry, a beacon of hope shines in the little town of Hammarsdale in KwaZulu-Natal.

A year ago, Umuzi Clothing Manufacturers was established. At that time the owners and managers were not sure if they were going against the curve as many factories debated workers’ wages. Others were closing shop and many were simply waiting for the government to save the industry.

A year after opening its doors, Umuzi has created 100 jobs and plans to double the number by next year.

Umuzi’s fabrics are supplied by the Mediterranean Textile Mill (MTM), which has been in the area since 1961.

Although the two companies operate as separate entities, they share a supply chain partnership.

MTM is one of oldest textile factories in the area and just like any other textile mill, it has undergone the hardship of retrenching its workers and shrinking its operations. It is believed that in the 1980s nearly every second person living in Hammarsdale worked in the clothing and textile sector.

But as the sector became eroded with high competition from cheap Chinese imports and lagged behind in technology upgrades, many factories had to shut down and jobs were lost.

Renato Palmi, a project manager for both firms, said the partnership would create local clothing lines and job opportunities. “The link between the two entities provides a unique value chain… our customers are supporting local production and content and in their way contributing to employment in the country,” he said.

He added that the only way to bring life back to the textile and clothing sector was to increase productivity to match international competition.

This should include the adoption of quick response manufacturing. Palmi added that apparel production was changing from the traditional mass-production to mass-customisation and in-trend manufacturing models.

“We are very proud that we’ve managed to get this going. We were able to create some jobs and all we need now is the support of the government and the industry.”

Palmi said: “Our efficiency is in the unique relationship between the textile company and Umuzi, the entire linkage being proudly South African and an intense focus on quality, productivity, output, price and market understanding.”

Industry players, including MTM director Marcus Varoli, have recently disputed claims by the Southern Africa Clothing and Textile Workers’ Union that productivity in the sector has increased by 73 percent.

In his argument, Varoli asked: if this was the case, why were companies such as Seardel and Trubok still retrenching workers? He also asked why Sactwu’s report was never made available to the rest of the industry.

A partner at Umuzi, David Telford, said the sector needed motivated workers who would increase volumes to improve the local industry’s competitiveness. “We are racing with China, Pakistan and countries like Turkey so we need to motivate for high productivity, which will get us to be better competitors,” he said.

Both Telford and Palmi agreed that Umuzi could benefit from government incentive schemes, but they called for stricter rules to police the initiatives.

They both agreed that government manufacturing incentives or initiatives to revive the industry were going in the wrong direction and companies like Umuzi deserved the opportunity to establish themselves

SA Olympic Committee Backtracks - alittle

Apparently South Africa's Olympic Committee has decided to have a South Africa designer design the team's opening kit. 


However, as the clothing union rightly says, what about the manufacturing? 


It is strange that the SA Sports Confederation and Olympic Committee (Sascoc) has not mentioned anything about production. 


Will the Chinese firm that is making the kit - see link - will also be making the opening ceremony kit?  


We await further details from Sascoc.  


The ReDress Consultancy feels this is just shallow tokenism.

SA companies to be more competitive: DTI

SA firms 'must be more competitive

If SA companies are to be relevant in global markets and especially in Africa, they have to raise their competitiveness, says Trade and Industry Minister Rob Davies.

Launching the DTI's R5.8-billion manufacturing competitiveness enhancement programme yesterday, Davies said research had shown companies among the first to fail during the recent economic downturn were those that had not modernised.

He said there were opportunities for South African manufacturers including entering African markets.

"We are convinced that the African continent, including South Africa, is well placed in the medium term for strong growth."

Davies said if South Africa wanted to be a significant player on the African continent it would have to make significant investments to improve its competitiveness.

Explaining the new programme, Davies said that a major aim was: "... encouraging companies to make competitiveness enhancement improvements now rather than later".

He said the programme was aimed at improving production output and was similar to the strategy used to help the clothing and textile sector.

"It is no secret that the clothing and textile sector was in dire straits, but by focusing on production output, it has stabilised, and even in some cases increased employment," he said.

Ref: TimesLive, 16 May 2012