South Africa can lose hundreds of thousands of jobs
Trade union Solidarity and the government are officially in a dispute over the wave of retrenchments hitting the country.
This follows the failure of a mediation process at the National Economic Development and Labour Council (NEDLAC).
NEDLAC was established in 1994 by the National Economic Development and Labour Council Act.
It is a unique forum that brings together key players in the country to discuss and reach consensus on socio-economic policy and legislation.
It is the vehicle by which the government, labour, business and community organisations seek to cooperate through problem-solving and negotiation.
Solidarity stated that its mediation efforts with the forum were unsuccessful. “NEDLAC will issue a certificate confirming this within two weeks,” it said.
Solidarity said it will release new information within days about hundreds of thousands of jobs that could be lost before Christmas.
“We are also planning several protests to highlight the seriousness of the problem,” it said in a press statement.
The second round of the mediation process was attended by employers such as Columbus Steel, Ferroglobe, Trans Alloys, Samancor, MMC Nelspruit and Glencore.
The Minerals Council and Business Unity South Africa (BUSA) also sent representatives to the mediation.
“FAPA, the Ferro Alloy Producers Association, made a presentation that contained shocking figures about retrenchments,” Solidarity said.
The trade union highlighted that due to the mediation protocol, the content of the discussions may not be disclosed.
Solidarity declared a dispute against the South African government in terms of section 77 of the Labour Relations Act, regarding the wave of retrenchments earlier this year.
Solidarity CEO Dirk Hermann explains the situation
Solidarity CEO Dirk Hermann said they hope that progress could be made on the retrenchments through discussion.
“If this progress does not happen, there will be another work bloodbath before Christmas,” he warned.
One of Solidarity’s demands was that a multi-departmental team be formed to address the different elements of the crisis.
“However, the government did not show urgency and was not prepared to hold further discussions,” he said.
According to Solidarity, a central theme in recent company retrenchment notices is government failure.
These failures include issues with rail, road, and port infrastructure, electricity pricing structures, policy-related issues, and overregulation.
The cost of empowerment and, more recently, the impact of America’s tariff regime, also impacted the South African market.
Large businesses implicated in Solidarity’s submissions would also be invited to the mediation.
High unemployment in South Africa
Solidarity’s warning of large-scale retrenchments in South Africa will cause havoc as the country is already battling high unemployment.
The latest data shows that South Africa’s official unemployment rate is 32.6%, while the expanded definition puts it at 41.2%.
Youth unemployment is worse, with job seekers between 16 and 24 facing an unemployment rate of 62.2%.
Over three-quarters of unemployed South Africans have been jobless for an entire year. The country has the lowest employment-to-population ratio among all G20 nations.
This stems from a decade and a half of lacklustre economic growth, dwindling investment, and an increasing skills mismatch between graduates and the jobs market.
If South Africa cannot address this challenge, the country’s long-term economic growth will remain flat, resulting in a worsening financial disaster.
This is feedback from Coronation’s economics unit, which analysed South Africa’s unemployment crisis in its latest quarterly Correspondent.
It noted that unemployment is the greatest reinforcer of inequality. Faster economic growth and increased employment opportunities are the only solutions.
South Africa’s unemployment rate is among the highest in the world and is significantly higher than that of any comparable-income country.
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