Western Cape Business News

Send  Share  RSS  Twitter  07 Sep 2009

BUILDING: Sector Looks At Retrenchment Alternatives


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The effect of the economic slow down is showing, resulting directly in a severe shortage of work within the building industry. It is not surprising that the Building Industry Bargaining Council (BIBC), who earlier this year saw an increase in benefit contribution sales, is currently reporting a 10% reduction in their ‘year on year’ figures. “Our March figures, which represented the first five months into the Council or building industry’s 2008/2009 year, showed that contribution purchases are up by 4% compared with the first five months of the 2007/2008 year, however, we are now unfortunately seeing a reverse of this growth with a 10% reduction in contribution purchases,” said Henry Strydom, Secretary for Building Industry Bargaining Council (Cape of Good Hope). The contributions referred to are daily contributions to pension and provident funds, annual leave and bonus funds, medical aid and sick pay funds as well as council levies.

Whilst the BIBC’s Collective Agreement permits and makes provision for employers to lay-off employees due to work shortages, this is seen as a temporary measure. And whilst a layoff is a temporary suspension of work of a worker, or group of workers, for a stipulated period, it is anticipated that retrenchments may follow if there isn’t sufficient work available. “Employers are encouraged to explore other alternatives including the lay-off or reduced hours, before embarking on the drastic step of retrenching, which has far reaching consequences,” added Strydom.

Strydom explains that in respect of the process, employees laid off may choose retrenchment at the end of the first 20 days or otherwise choose to be laid off a further 20 days in the hope that the situation improves. The BIBC has urged caution and due process, to prevent unnecessary retrenchments, in the hope that all alternative avenues are explored. “A consultation process, taking the form of a joint problem solving exercise, is at the very heart of a retrenchment process. Integral to this process is that the employer and the union (or even individual employee) tries to find ways of avoiding the retrenchment,” concluded Strydom.

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