South African Clothing and Textile Workers Union (Sactwu) deputy general secretary Wayne van der Rheede said the closures were part of a "targeted campaign" to get clothing factory owners to comply with minimum wages set by the bargaining council. He said there would not be "wholesale closure of companies" that would lead to the loss of thousands of jobs.
Small clothing manufacturers have been particularly hard hit by the low prices of clothing imports from China, rising production costs and the exodus of manufacturing orders to Lesotho and Botswana, where companies pay lower wages than in SA.
Last year the bargaining council threatened to close 385 clothing and textile manufacturers for allegedly failing to pay minimum wages.
But in December it gave recalcitrant factories, which employ about 2000 workers, until the end of last month to be at least 70% compliant with the wage requirements. The council conducted inspections of factories last month to determine whether they were compliant.
SA's labour legislation has been criticised for being too onerous in a country where millions remain unemployed. The minimum wage for a machinist outside metropolitan areas is less than R2000 a month, but many employers complain that they cannot remain competitive if they pay such wages.
United Clothing and Textile Association chairman Ahmed Paruk said the council was expected to close another three or four factories in Newcastle in the next few days, affecting about
6500 workers' livelihoods, including those in yesterday's closures. The association's attempts to negotiate a new entry-level wage structure with the bargaining council over the past four months seemed to have been in vain, Paruk said.
Van der Rheede said the closures would continue. "We are analysing the situation as it unfolds.... We are going to target the worst offenders," he said.
Alex Liu, chairman of the Newcastle Chinese Chamber of Commerce, questioned why his factory had been locked in terms of a court order obtained by the bargaining council, as he was paying more than other clothing manufacturing employers in the area.
The closure of another clothing company in Newcastle, Star Fair, sparked protests by angry workers and the police were called in to disperse them yesterday.
Liu said he had laid off all 160 of his workers in preparation for employing fewer people at the higher wage rates, but with the forced closure of the business, he and his management committee were reconsidering whether it was worth reopening.
Van der Rheede said while Liu had claimed to pay higher wages than other companies, he did not prove this.
Sactwu and employer organisations have argued that, apart from being exploitative, companies which fail to comply with minimum wage requirements compete unfairly with companies in SA that do comply.
They also argue that noncompliance with minimum wages has been an issue in the industry for more than a decade - more than enough time for employers to get their house in order.
Source: Business Day
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