Union fires back at Pick n Pay job cut claim

The union cited an article published by Business Report on Monday in which blame for Pick n Pay's decision to retrench more than 3000 workers, was partly placed upon the union's reluctance to participate in a flexibility agreement and the strike it embarked on last year.

Earlier this month, Pick n Pay announced that due to operational requirements it was contemplating the retrenchment of about 3137 workers within its non-management bargaining unit.

In terms of the Labour Relations Act, Pick n Pay communicated its intentions to Saccawu, and began consulting on the retrenchments last Friday.

According to the union, Levy only pays "lip-service" to fundamental rights enshrined in the "constitution of the land," which includes the right to strike.

"Vast income inequalities which were highlighted by the 2010 strike are simply ignored by the same analyst.

"For these reasons the article clearly constitutes an ideological attack on the union and its members and further seeks to compel the union to conduct the consultation process, over an issue that may condemn thousands of workers and their families to grinding poverty for the sake of super-profits for a tiny minority," it said.

Levy told the newspaper that the union's unwillingness to participate in the flexibility and mobility agreement was certainly a factor in the current retrenchment drive and it was critical for retailers to have flexible staffing as trading hours became extended.

He also said that the three-week industrial action which occurred during November last year was a contributing factor to the job cut decision, because "not only did Pick n Pay lose turnover during the strike, it also lost customers."

Saccawu urged Pick n Pay and its "chief propagandist" Neal Quirk, to desist from undermining the current consultation process.

"The process could plunge into a severe crisis with dire consequences," it warned.

The retailer's job cut decision was made in the face of major problems facing the company in respect to declining profitability and the loss of market share to rivals Shoprite (SHP) and Woolworths (WHL).

The group's shares have dropped around 13% this year, while rival Shoprite's have gained 5.4% and upmarket retailer Woolworths shares have surged 12.2%.

Analysts have noted that Pick n Pay, which employs 36,673 people, is playing catch-up to rivals after a series of errors made by the group over the past few years and its intention to retrench has underlined the seriousness of the situation that the group has found itself in.

Furthermore, the group's cost base has been criticized as "ludicrously high".

Pick n Pay's annual report puts salaries, wages and other benefits at 4.3 billion rand.

"Pick n Pay are good payers but their staff per square meter is a lot higher than other players. They're overstaffed and the staff is overpaid when compared to their competitors.

"They're taking the step to improve efficacy by working on their wage bill/turnover ratio, which is the worst in the market," a retail analyst told I-Net Bridge/BusinessLIVE.