Union agreement saves 2 000 jobs at Pick n Pay

Union agreement saves 2 000 jobs at Pick n Pay

RETAILER NEWS

IOL Business - Dec 7th 2011, 10:38

The SA Commercial, Catering and Allied Workers’ Union (Saccawu) was happy that it had been able to save 2 000 jobs at Pick n Pay as a result of an agreement reached with management, Mduduzi Mbongwe, the deputy general secretary of Saccawu, said yesterday. 

He said that although, to date, there had not been much improvement in the tense relations between the workers and management, he hoped there might be in the future.

Yesterday Pick n Pay announced that it would not be forcibly retrenching an estimated 10 percent of its 36 000 workforce as it had reached an agreement with Saccawu.

Yesterday’s statement followed an announcement in July, which stated that in a bid to combat falling profitability the company was considering retrenching more than 3 000 of its employees.

The proposal to retrench employees was thought to have been influenced not only by the group’s declining profits, but also by the prospect of increased competition from a Walmart-owned Massmart.

Yesterday Pick n Pay said that the agreement “allows for a flexible workforce of both full-time and variable-time employees under changed working conditions”.

The statement added that the agreement “will allow Pick n Pay to have the right number of employees in the business at the right times, in line with customer trends and demands. This in turn will allow for a flexible workforce, which will translate into a more efficient business.”

Pressure on management to cut costs heightened with the recent release of interim results to August, which showed that net profit, during what was described as a difficult trading period, had fallen 46 percent. Labour-related costs are estimated to account for about 65 percent of the retailer’s total costs.

Data from the Labour Research Service (LRS), which undertakes research for trade unions, reveals that the average monthly wage paid by Pick n Pay in 2010 – the most recent sectoral data available – was R3 000.

This was significantly below many of the other retailers and below the average monthly wage for all sectors of R3 162.

Michelle Taal of the LRS said that while management appeared to focus on labour as the source of its difficulties, this tended to overlook the many other areas in which the group had failed to perform.

“And now the threat of retrenchment is being used to push through demands for increased flexibility,” Taal said.

Pick n Pay’s “flexibility” objective includes the achievement of what is termed “normalisation of time”, which means that every hour worked is equal, regardless of the day of the week or hour of the day. Thus working late at night or over the weekend will not give rise to any overtime.

The labour analyst noted that the push towards “normalisation of time” created considerable difficulties for workers in the sector as many of them were mothers.

The LRS’s bargaining monitor relating to the sector, which was released last month, reveals that employment in the wholesale and retail trade, hospitality and accommodation industry grew substantially between 2001 and 2008. “In 2008 the total number employed in the industry was 3 156 000, of whom two thirds were in the formal and one third in the informal economy.”

As the value of the industry shrank in 2009 and 2010 the numbers employed dropped and by the end of 2010 there were almost 300 000 fewer jobs in the industry.