By Ntombi Nkosi on IOL
It was a sad day for 621 employees from the South African Broadcasting Corporation (SABC) after it announced that it’s going ahead with retrenchments.
The broadcaster said in a statement that the monumental retrenchment process was due to its unhealthy financial situation, attributed to its bloated wage bill.
SABC said it has concluded its Section 189 process and will transition into the new fit-for-purpose structure effective from April 1, 2021.
Speaking to Independent Media, one employee said: “I really don’t know how to feel, I am heartbroken and don’t know what the future holds for me. I am one of the people that has been receiving counselling organised by HR.”
The broadcaster said the reduction of employee costs is central to its turnaround plan and its long-term sustainability. The Section 189 process began with the issuing of the notice in June 2020, and after an intensive nine-month period, it will conclude on Wednesday.
“The retrenchment process has been extremely difficult for all stakeholders and became emotionally charged at times. The extended process unfortunately also created prolonged uncertainty and a sense of despondency for many.
’’This was understandable and regrettable. However, despite these challenges, the Section 189 process was a necessary component of the SABC’s turnaround plan to ensure the public broadcaster’s long-term financial sustainability and capacity to fulfil its extensive public mandate,” said SABC’s Group Chief Executive, Madoda Mxakwe.
He added that the process was necessary to preserve and reposition the SABC as a resilient and viable public broadcaster and public media organisation.
“The SABC will continue to diligently serve the tens of millions of South Africans who rely on it for education, sport, news and entertainment in all our languages. We remain committed to transforming the SABC and taking its content everywhere, across platforms, on all devices and in all our languages.
’’We want to be part of preserving this national treasure which has the public interest at the very heart of its existence,” said Mxakwe
SABC said 346 of the 621 employees, notwithstanding the existence of alternative jobs, opted for voluntary severance packages.
The broadcaster said some employees were concerned about the impact of lower job scale codes resulting from the evaluation process on current salaries and their pension. They took voluntary severance packages as a first option and chose not to participate in any alternative job-seeking processes.
The other 275 employees are those who occupied positions that have become redundant. Some employees in this category went through the recruitment process seeking alternative opportunities, but were unfortunately not successful.
Join the seminar on retrenchment and the Covid-19 environment.
South Africa has experienced several negative economic factors including the Covid-19 pandemic that have adversely affected the performance of companies in all industries. Companies have failed to achieve budgeted revenue while significant financial losses over the past few months have increased.
This has led to an increase in employers being forced to reduce the number of staff through retrenchments by following Section 189 and 189A of the Labour Relations Act. Dismissals based on the employer’s operational requirements include the employer’s economical, technological, structural or similar needs.
Employers must ensure that the termination due to retrenchment must be substantively and procedurally fair to avoid spending time and money at the relevant dispute resolution forums like the CCMA, Bargaining Council and the Labour Court. When an employer is forced to enter into retrenchment consultations, the selection criteria used when selecting which employees may be affected falls within the fairness of the dismissal.
The LRA in section 189(2) prescribes that a joint consensus seeking procedure must be followed and further continues in Section 189(2)(b) that an attempt to reach consensus on the method for selecting the employees to be dismissed. Section 189(7) prescribes that the employer must select employees to be dismissed according to a selection criterion that has been agreed between the parties or failing agreement a criterion that is both fair and objective.
This agreement can be agreed upon in the collective agreement between the Union and the employer and could further be agreed upon between the parties during the consultation process.
Should there be no agreement between the parties, the employer should follow Section 189(7)(b), which refers to the fair and objective selection criteria. The principal of “LIFO” last in first out, that refers to the employee’s years of service is the most commonly used selection criteria in the absence of an agreement between the parties. This is however not the only alternative selection criteria that may be used, when an employer is exploring a fair and objective selection criteria the employer should keep in mind that this selection criterion may not discriminate against a certain group of people.
Performance, skills and qualification or a combination of these criterions is frequently used as a selection criteria during retrenchments.
In Oosthuizen v Telkom SA Ltd  11 BLLR 1013 (LAC) the court found that the dismissal of the applicant was unfair when the respondent made use of skills, suitability and the company’s employment equity policy, without taking into consideration the appellants years of service.
It is important that the selection criteria should be fair and objective, not only one of the above. By pulling employees names out of a hat could be seen as objective, however it could still be seen as unfair should an employee be selected on this basis with significant more years of service than the employee who is not affected unless this was agreed to by the consulting parties.
There are different ways and means for employers to make use of selection criterions when faced with retrenchments. The sustainability of the business going forward is of outmost importance, however the use of the last in first out “LIFO” principal has been accepted and endorsed by the courts.
According to Sunday World, The SABC has revived plans to retrench workers – despite the uproar that flared up when the public broadcaster initially wanted to cut hundreds of jobs as part of a turnaround process.
- It will reduce the cash-strapped organisation’s salary bill by R700-million
- It plans to invoke section 189 of the Labour Relations Act to cut 33% of staff
- This means retrenchment of 981 permanent staff members and more than 1 200 freelancers
- The current SABC operating model is not defined and had major challenges, such as the absence of an overarching group strategy and planning function cascading to divisional plans
National Treasury now estimates that job losses could be between 690 000 and 1.79-million due to the impact of the Covid-19 pandemic on the South African economy.
The 690 000 job losses are likely in the event of a quick recovery; the larger figure is a worst-case scenario.
The sectors that will see the largest impact are likely to be:
- Catering and accommodation; and
- Financial and business services.
Avis Budget Rent-a-Car, part of the Barloworld Group, announced that a total of 978 employees would be affected by retrenchment, according to a Fin24 article. This is nearly half of the employees of the company.
Meanwhile, the Bidvest Group’s shares fell more than 5% on Monday after the diversified services and trading company warned of possible job losses as a result of coronavirus-related disruptions across its operations.
This is in addition to running list of companies in South Africa who have gone into business rescue, or foresee retrenchments and job cuts.
- Phumelela Gaming and Leisure (currently in business rescue)
- Afarak Mogale and Afarak South Africa (currently in business rescue)
- SAA (currently in business rescue)
- SA Express (currently in business rescue)
- Edcon (currently in business rescue)
- Comair (currently in business rescue)
- Tiger Brands
- Cell C
- Pam Golding
- Flight Centre
South African Airways (SAA) has issued notice to all 4 700 of its employees that it intends to begin consultations on retrenchments, the business rescue practitioners (BRPs) for the troubled national carrier said on Monday.
“The joint BRPs today announced that South African Airways SOC Limited has issued a notice advising its employees of the intention to begin imminent consultations in terms of section 189 of the Labour Relations Act 66 of 1995,” a spokeswoman for the BRPs said.
They stressed that retrenchments, along with route and fleet reductions, were essential to avoid liquidation and said therefore a shorter consultation process had been proposed.
The notices went out to all unions representing staff and management, following talks over the weekend and earlier with labour representatives.
A reduction in route flow as well as the airline’s fleet were unavoidable, and apart from cutting staff, salaries could also be reduced, said the BRPs.
“The BRPs contemplate that all 4 708 employees will be affected and the number of jobs that will exist in the restructured organisation will be the subject of the consultation process.
“Significant changes to conditions of employment, including remuneration and benefits, appear unavoidable and will be sought by agreement.”
They added that they would seek to preserve as many jobs as possible but cautioned that the outlook for SAA had dimmed further following the spread of the Covid-19 virus and its impact on international travel.
SAA has stacked up losses of R26 billion over the past six years and was placed in voluntary business rescue in December.
“Load factors on the airline have declined steadily from August 2019 to a low of 71 percent in January 2020. Forward sales have also declined significantly with all markets showing negative or minimal growth, within a very competitive market. The recent marked decline in travel due to the Covid-19 virus will further exacerbate matters.
“The changes required at SAA are therefore both structural and economic. They are urgent if liquidation is to ultimately be avoided in which event all employees will lose their jobs.”
The business rescue team, which is due to submit a report to government at the end of March, said they were proposing a fundamental restructuring to enable SAA to function as a sustainable African airline and the current structure did not allow for this.
The restructuring process at this stage does not affect staff at SAA’s subsidiaries Mango, SAA Technical and Airchefs.
Initial consultations with staff and representatives will be held on Thursday.
The legally prescribed 60-day consultation process would end on May 8. However, the business rescue practitioners said an expedited month-long consultation process ending April 8 had been proposed in an effort to avoid liquidation.
It is essential that this process achieve an agreement between the company and the unions that will be communicated to the creditors and the lenders as part of the business rescue plan, if the business rescue plan is to be approved and liquidation avoided.
“The business rescue practitioners believe that if this is achieved, SAA will be sustainable and the future of SAA can be ensured, without further fiscal assistance.”
Nedbank Group is in talks with about 1 500 employees over potential job cuts at the South African lender’s retail and business-banking division to cope with a struggling economy and increased competition.
The company forecasts that “between 50 and 100 employees are at risk of not being placed in a role,” Johannesburg-based Nedbank said in an emailed response to questions on Friday.
“Unplaced employees will then be assisted by the bank to either secure available alternative positions within the bank, which is our first prize, or be equipped for opportunities outside the bank.”
South African lenders are battling to grow revenue faster than costs as they contend with an economy that has shrunk for three of the past five quarters.
Consumers have been battered by rampant unemployment, rising taxes, fuel prices and utility bills, pushing them to explore cheaper banking alternatives or digital services.
Companies aren’t investing amid uncertainty over electricity supply and surging government debt levels.
“Nedbank is being forced to reshape our operating models and businesses,” the company said. “In doing this, Nedbank actively makes use of natural attrition and a redeployment and reskilling pool. Non-voluntary retrenchments are always the last option.”
The company, which employs 30,577 people, has also been reducing the floor space used by its branches and increasing the use of automation to lower costs.
Nedbank expects the process to be concluded after the final meeting with the labor union Sasbo at the end of this month, it said.
By Jewel Stolarchuk for The Independent
18 000 jobs in Deutsche Bank are set to be cut as the German national lender embarks on mass retrenchment exercise. Whole teams at the bank’s Asia-Pacific offices have reportedly been let go, as the lender seeks to transform itself from an investment bank that used to compete with the lenders in Wall Street, after struggling in the aftermath of the financial crisis.
Deutsche Bank employs about 4,700 employees in its Asia-Pacific offices in Singapore, Sydney, Tokyo and Hong Kong. The investment banking team in the region consists about 300 staff members and it is expected that 10 to 15 per cent of these employees and almost all the employees in the equity capital markets division will be retrenched.
According to Reuters, the restructuring plan will ultimately cost 7.4 billion euros (SGD $11.31 billion) and will see the bank cut back on its fixed income operations and axe its global equities business altogether.
Most of those retrenched are working in the bank’s offices in Europe and the United States but some offices from Sydney to Hong Kong were also affected. Retrenched workers are due to sign redundancy packages.
One Deutsche bank employee, an equities trader based in the Hong Kong office who declined to be named, told Reuters that staff were called individually to meetings and that the mood was “pretty gloomy” as the job cuts began. He said: “(There are a) couple of rounds of chats with HR and then they give you this packet and you are out of the building.”
While a Deutsche Bank spokeswoman declined to comment on specific departures, an insider who is familiar with the bank’s Australian operations told Reuters that most of the mergers and acquisitions staff would not be immediately affected but the teams in the four-strong equity capital markets were being retrenched.
The Deutsche bank spokeswoman assured the press that the bank would be directly in touch with employees. She added: “We understand these changes affect people’s lives profoundly and we will do whatever we can to be as responsible and sensitive as possible implementing these changes.”
Deutsche Bank’s Chief Executive Officer Christian Sewing called the retrenchment exercise part of a “restart.” In a letter to employees, he wrote: “We are creating a bank that will be more profitable, leaner, more innovative and more resilient.”
This “restart” comes on the heels of Deutsche Bank’s failure to merge with its rival Commerzbank. In May, Mr Sewing hinted at extensive restructuring as he promised shareholders that he will implement “tough cutbacks” to the investment bank.
How it will impact South Africa
According to an article by Business Insider, the Sandton headquarters employ approximately 70 staff.
- The equity trading desk will be closed completely, with the loss of around 12 jobs
- The fixed income team, which trade bonds, will remain largely unchanged in South Africa
The bank suffered a pre-tax loss of €16-million (R251,5-million) on its South African activities last year, according to the Deutsche Bank annual report.
Pay-TV MultiChoice has announced plans to retrench more than 2 000 employees in the call- and walk-in centres of its business, due to a “strategic realignment of its customer service delivery model”.
In a statement, the company said that customers are “increasingly moving away from traditional voice calls and visits to walk-in centres and adopting new self-service and digital technologies to engage with the company.
2 194 employees were given notice on retrenchment, but MultiChoice Group chief executive Calvo Mawela said the restructuring will make new roles available “for multi-skilled employees with the expertise, skills and technological prowess to enhance the customer experience”.
However, media worker trade union ICT said in a statement that “the Union has not been officially informed, which makes the process unlawful”.
Standard Bank has announced that it will close 104 of its branches by June 2019. This comes after an announcement by the bank in March that it planned to close more than 91 branches.
The bank’s efforts to digitise its retail and business bank is expected to impact more than 1 200 jobs, as staff members are retrenched to make way for self-service offerings.
Standard Bank has published the full list of branches which will be closing across the country on its website. It also outlined the branches where customers affected by the closures can go instead.