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Union unhappy with Walmart judgment
Union unhappy with Walmart judgment

Union unhappy with Walmart judgment

RETAILER NEWS

IOL Business - Mar 9th 2012, 15:06

The SA Commercial, Catering and Allied Workers' Union (Saccawu) is not happy with the Competition Appeal Court's “conservative” judgment on a merger between US retail giant Walmart and local company Massmart. 

Saccawu spokesman Mike Abrahams said outside the court in Cape Town on Friday that the judiciary had failed to take various factors such as the conditions of employment for workers into account.

“In my view the judiciary had a very conservative approach to the issues we raised,” Abrahams said.

“We argued that Walmart's entry will have serious implications for competition, for employment and the conditions of employment.

“The way workers will win is not through litigation but by increasing our number of members and taking on business in the shop floor.”

In his judgment on Friday, Judge Dennis Davis dismissed the application by the ministers of economic development, trade and industry and agriculture, forestry and fisheries who sought to review and set aside the Competition Tribunal's approval of the merger between Walmart and Massmart.

He ordered that a study be commissioned by three experts, representing Saccawu, the three ministers and the merging parties to produce a report for the consideration of the court on the best means by which South African small and medium sized suppliers could participate in Walmart's global value chain.

Davis upheld, in part, an appeal by Saccawu that 503 workers who had been retrenched from Massmart shortly before the merger were entitled to reinstatement.

Abrahams welcomed the study, saying it would give the union another chance to show the implications for the local economy of the merger.

“It gives us an opportunity to come back to the court and to demonstrate what the implications will be for the local economy,” he said.

Saleem Mowzer, the acting director general for the department of economic development, said the three ministries respected the court's decision.

“We respect the decision of the court,” he told reporters.

“We are pleased the court has recognised the public interest issues that we have raised.”

Brian Leroni, a spokesman for Massmart and Walmart, said the merged firm welcomed the decision and wanted to work with labour and government.

“We would like to emphasise that we want to work with organised labour and the government going forward,” he said.

“The process has been rigorous and long in duration.

“We think that we know and understand each other's expectations.”

The ministers had argued that they did not enjoy a fair hearing before the tribunal when it decided to approve the merger.

They contended that the tribunal had erred in refusing to order the merging parties to discover a range of documents which had been sought by them and which, in their view, were “wholly material” to the determination of the merger.

Davis said as a result of the nature of the case and the outcome, there would be no order as to costs in respect of the appeal.

He said the merged entity had to ensure that there were no retrenchments based on the merged entity’s operational requirements in South Africa, resulting from the merger, for two years from the effective date of the transaction.

The merged entity must honour existing labour agreements and must continue to honour the current practice of the Massmart group not to challenge Saccawu's current position as the largest representative union for at least three years.

The judgment comes days after the conditional approval of the merger between Walmart and Massmart by the Namibian authorities.

Massmart was advised by Namibia's trade and industry ministry that the deal had been approved with three conditions that the merged entity ensure there were no retrenchments resulting from the transaction for two years, that it honour existing labour agreements and that it continue to recognise representative trade unions for two years.

The merged entity must consult with the ministry of trade and industry on the establishment of a programme of activities for domestic supplier development.

Massmart has operations in 14 African countries outside of South Africa. - Sapa  

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