Government should urgently intervene on the pending retrenchments at Massmart, says chairperson of parliament’s select committee on Trade and Industry, Mandla Rayi.
Rayi described the retrenchments as ‘catastrophic’ and warned that the cuts would hinder the government’s plans to create jobs.
“It is not ideal to have the government interfere in business, but the severity of the pending retrenchments necessitates that there must be a collaboration of minds.
“Losing over 1,000 job opportunities will be catastrophic not only for job creation, but also for the families of those who will be affected,” he said.
Rayi added that it was ‘not ideal’ to begin 2020 year by laying off workers with no alternative sources of income.
“Such an action, no matter the amount of consultation, will frustrate government’s objectives of creating over a million job opportunities.
“It is the view of the committee that SA is still friendly to business, and foreign investments and opportunities are there for business to exploit,” he said.
Rayi said it would be preferable if Massmart considered ways of accommodating the labour force in other business units, or even expand operations to rural provinces where their footprint is not prevalent.
On Monday (13 January), the Massmart Group announced a number of potential store closures and retrenchments at Dion Wired and Masscash stores as it cuts down on under-performing outlets.
The group said that it recently conducted a store optimisation project that highlighted a number of under-performing stores in its portfolio.
“Consequent to this project the Massmart Group seeks to advise shareholders that Massmart has commenced, a potential store closure consultation process in terms of section 189 and section 189A of the Labour Relations Act 66 of 1995, as amended; with organised labour and other relevant stakeholders,” it said.
“A total of 34 Dion Wired and Masscash stores and approximately 1,440 employees are potentially affected by this process.”
Massmart currently employers approximately 12,000 employees across its group which includes brands such as Makro, Game, Builder’s Warehouse and others.
A spokesman told Bloomberg that the plan is to shutter the 23-store Dion-Wired chain of hi-tech appliance shops and 11 Masscash wholesale outlets.
Employees and the South African Commercial, Catering and Allied Workers Union have been informed and the process may take at least two months, he said.