'Lay-offs should be last resort'

Johannesburg - Zwelenzima Vavi, general secretary of trade federation Cosatu, and former Eskom chairperson Bobby Godsell said on Tuesday too little has been done to alleviate South Africa's rocketing unemployment figures.

Speaking as co-chairs of the Millennium Labour Council (MLC), Vavi and Godsell urged businesses to follow a checklist of procedures before they consider retrenching workers.

"Yes, these steps aren't necessarily new and it comes a little too late," said Godsell. "But we are appealing to business and labour to think in the medium and long term and not use retrenchment as a reflex action to dropping sales."

MLC proposals include cutting down on capital expenditure and dividends declared. The council also stressed the need for companies to consider the benefits of training lay-off programmes.

According to Vavi, the effect of the recession in the form of job losses will worsen in 2010.

"The extent of the damage is there already, and we'll see more job losses in the coming year," said Vavi. "But this proposal will be a very important cornerstone for a jobs pact aimed at the minister of economic development (Ebrahim Patel)."

Before accepting the retrenchment route, labour should consider other ways of chopping labour costs, said Vavi.

"Short-time wage freezes and wage cuts should be considered," he said. Godsell said that, together with Vavi, he was appealing to business at the end of the year to reflect on alternatives to retrenchments.

"The end of the year is when companies make critical decisions on their workforce," he said.

Five mouths to feed for each employee

Vavi said it was "never too late" to embark on the preservation of jobs.

"But the 959 000 people who have lost their jobs this year would disagree," he said.

Vavi said it had to be remembered that, on average, the wages of every worker in the country supported a minimum of five dependents. "This means every time a single worker loses a job, five or more persons are plunged into poverty."

Godsell told the briefing that no company should retrench workers without first making use of the government's training lay-off scheme. Under the scheme, workers faced with retrenchment may instead be suspended from work, be paid half their basic salary and receive training.

Vavi said he recently discussed the training lay-off programme with President Jacob Zuma.

"I said after that meeting that it was disappointing that the scheme had saved only about 4 400 jobs... but still it is an important intervention."

Zuma promised to create 500 000 job opportunities by the end of 2009. Despite government's claim that it created 223 568 jobs in the second quarter with its public works programme, the economy has shed over a million workers in the past 12 months.

- Fin24.com