Shoprite dismisses 3,000 workers at Zambian stores
SA labour expert hails business regulations elsewhere in Africa
SHOPRITE’s decision to fire nearly 3,000 workers in Zambia on Tuesday highlights the investment attractiveness of the rest of Africa over SA, thanks to Africa’s favourable economic growth and labour laws, according to Adcorp labour economist Loane Sharp. Shoprite spokeswoman Sarita van Wyk said yesterday the strikers in Zambia had ignored a second ultimatum.
SHOPRITE’s decision to fire nearly 3,000 workers in Zambia on Tuesday highlights the investment attractiveness of the rest of Africa over SA, thanks to Africa’s favourable economic growth and labour laws, according to Adcorp labour economist Loane Sharp.
Shoprite spokeswoman Sarita van Wyk said yesterday the striking workers in Zambia had ignored Shoprite’s second ultimatum to return to work on Tuesday, following Monday’s initial ultimatum. As such, the company “terminated their employment” late on Tuesday afternoon with an option for the workers to re-apply from yesterday, with no guarantee of being taken back, she said.
Shoprite management in Zambia was meeting Labour and Social Security Minister Fackson Shamenda yesterday “and more information about the situation will be available after that”, Ms van Wyk said.
While the striking workers had been urged by the two deputy ministers of labour and social security and the union president to return to work, they had initially “flatly refused”. When they had agreed to return to work, “by that time the terminations had taken effect”.
Shoprite runs 21 stores in Zambia and nine Hungry Lion fastfood outlets, according to its 2013 annual report.
The country has the highest number of Shoprite stores outside SA, a report shows.
Zambia ranks 20th out of 148 countries for its hiring and firing practices, according to the World Economic Forum’s latest Global Competitiveness Report. In comparison, SA ranks 147th.
Mr Sharp said the rest of Africa was an attractive investment destination for South African companies, “not only because economic growth rates in Africa are higher than at home, but also because labour laws and regulations are much more friendly to businesses”. South African workers were “extensively protected against dismissal”, and there was no category in the Labour Relations Act for dismissal for poor work performance, he said.
“For this reason, many South African workers are subject to what we call ‘presenteeism’ — in other words being present for work but not productive.”
Mr Sharp said Shoprite had “an excellent history of managing labour relations effectively” in SA and elsewhere.
“Their latest retrenchments in Zambia should be taken as a sign that Shoprite will not be held hostage to workers’ opportunism. More South African companies should behave in this way,” Mr Sharp said.
He noted that the two main factors in a country’s attractiveness for investment were economic or revenue growth and the cost of labour, given that labour costs made up a large proportion of production costs.
“Every single African country has a more favourable balance of revenue growth and limited costs than SA. I would say that over a 10year horizon, SA will become irrelevant to large companies’ expansion plans.”
Mr Sharp said SA was stuck in a low-growth environment “and labour laws are moving in the wrong direction and becoming more and more conservative, not less”. He said: “Labour costs are rising in SA at an extraordinary rate. If you include bonuses and overtime, they are growing at about 13% per annum — nearly three times the consumer inflation rate.”
In Shoprite’s financial year to June, the group’s supermarket operations outside SA — where it traded from 192 stores in 16 countries — saw a 27.9% rise in turnover. The group reported a 15.3% turnover rise on a samestore basis, with the major impetus coming from Nigeria, Zambia and Angola.