SA’S CONSTRUCTION INDUSTRY UNDER THREAT, RECORDING HIGH RETRENCHMENT RATES

South Africa’s building and construction sector is
on its knees, compounded by a stagnant economy and low infrastructure spending
by the government. This has resulted in major job losses, further swelling the
ranks of the unemployed.

Based on
the 2018/19 annual report of the Commission for Conciliation, Mediation and
Arbitration (CCMA), the outlook is bleak for the building and construction
industry as it continues to register major job losses and retrenchments.
According to the report, the construction sector recorded 3,584 employees
facing retrenchment — the highest among all sectors — adding more strain on
South Africa’s 29% unemployment rate.

The CCMA
figure represents almost half of the 8,000 job losses that Group Five – formerly one of the largest
construction and civil engineering companies in the country – predicted when it
was suspended from the Johannesburg Stock Exchange (JSE) after filing for
bankruptcy.

The
sector is heavily reliant on the government’s infrastructure spending trends.
The Building Construction and Allied Workers Union (BCAWU) says little can be
done to mitigate the retrenchments especially because the entire industry is
facing heightened uncertainty.

“Retrenchments
in this industry have been happening for the past four years. Major
construction companies which make up the top six have almost collapsed,” said
BCAWU secretary-general Narius Moloto.

“These
companies have not been getting any big projects, mainly because there hasn’t
been any further allocation to develop infrastructure in South Africa,” he
said.

Moloto
says the numbers recorded by CCMA underreport the scale of the retrenchments.
Despite these job losses, the sector still employs 518,000 people, according
to Stats SA’s Quarterly Employment Survey for June 2019.

The
second-highest number of retrenchments have hit the much-scrutinised mining
sector, which recorded 3,260 job losses. The sector did, however, record slight
positive gains in the quarterly survey with a 0.1% increase, employing 3,000
more people.

A total
of 193,732 cases were reported to the CCMA, an increase from the preceding
financial year’s 186,902 cases. Of the total, about 71% related to unfair
dismissals followed by 11% for unfair labour practices. The business
professional services sector remains the highest referring sector, accounting
for 27% of the total referred cases, followed by the safety and security sector
with 12%, building, and construction at 7% and agriculture, food and beverage
and mining at 4%.

Furthermore,
38,588 employees were subjected to large-scale retrenchments, also known as
Section 189A dismissals. About two weeks ago Sibanye-Stillwater, which recently
acquired Lonmin mine in Marikana, issued a section 189 notice, endangering about 5,270 jobs.

A
spokesperson for the National Union Mineworkers, Livhuwani Mammburu, told Daily
Maverick that unions should invest more in upskilling members with
technical and vocational skills to ensure that even after retrenchment, members
can sustain themselves.

“A lot of
mines are not doing anything to empower workers who are about to be retrenched
so that beyond retrenchments these workers are able to survive and work for
themselves if equipped with electrician and plumbing skills,” he said.

Even though the CCMA managed to mitigate 15,787 job losses, 21,391 retrenchments were still recorded. https://www.dailymaverick.co.za/article/2019-10-15-the-walls-keep-closing-in-on-sas-construction-industry-as-it-records-high-retrenchment-rates/