A growing number of business owners in the clothing and textiles industry are liquidating their companies before Christmas to avoid paying factory workers their bonuses, the SA Clothing and Textiles Workers Union (Sactwu) says.
The SA Clothing Research Institute revealed that since 2012, between October and the end of December, 36 clothing and textiles factories had closed down nationally. A total of 20 of the 36 liquidated companies were from the Western Cape.
Sactwu co-ordinator Fachmy Abrahams said on Sunday the union had noticed this trend in the industry, which had previously been negatively affected by cheap imports. “Sactwu finds it worrying that this deliberate strategy is still happening, despite the fact that the industry is stabilising after being hit by a flood of cheap Chinese imports over the past five years,” said Abrahams.
“Those 20 closures have left 1,500 workers jobless and one factory worker is usually the breadwinner in a home of five to eight people. At maximum, that’s 10 000 people affected.”
Factory worker Sheena Jansen, 58, from Mitchells Plain, was badly affected when the denim clothing factory she worked for went into liquidation in October last year.
“It wasn’t a nice Christmas for me and my family. We really struggled to have fun. My son was the only other person working and we had to make ends meet. They could at least have given us a warning so that we could save, or even given us just a percentage of our bonus, but we got nothing.
“For me and some of my colleagues who were there their whole lives, there is no starting over after losing work so late in life,” she said.
Cape Clothing Association executive director Johann Baard confirmed the trend, saying “unscrupulous employers have been taking advantage of the industry for decades.”
“Historically it is something that has happened and continues to happen. They file for liquidation before the festive season and then open up new businesses again early in the new year. If these things are brought to our attention, we can make sure the culprits are brought to book,” he said.
Baard said it was pleasing that in the past year there had been a marked decrease in the demand for cheap imports, and an increase in the demand for domestic supply.
Abrahams said, “The only way to stop these guys is by changing legislation. They take advantage of loopholes with the Insolvency Act and the Companies Act.
“In most instances by law, they are allowed to do it and get away with it, and despite stabilisation in the industry at a time when we want the industry to bounce back, it is quite distressing.”