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SACTWU wins Competition Tribunal case PDF Print E-mail
Wednesday, 06 May 2015 10:54

Media release: Immediate


The SA Clothing and Textile Workers’ Union (SACTWU) welcomes the decision taken today by the Competition Tribunal which has overruled a problematic merger decision made by the Competition Commission last year.

In 2014 a large merger occurred in the footwear manufacturing sector. It involved the merger of Beier Safety Footwear, Bagshaw Safety Footwear (which is a division of Bolton Footwear) and SKN Corporation and then the subsequent acquisition by them of the footwear division of KAP Manufacturing, comprising of Jordan & Co, United Fram, Wayne Plastics and Mossop Western Leathers.

The merger involved 2 130 footwear and leather workers. As a representative of workers in these firms, SACTWU had numerous engagements with the merger parties in order to ensure that our members would not lose their jobs after the merger. This can often happen in mergers, particularly in the event that the merger parties have related or parallel operations.  

The engagements between SACTWU and the merger parties were very constructive – the result of mature engagement with the objective of reaching a reasonable and mutually-agreeable solutions to workers’ concerns. Amongst other things, the merger parties committed that there would be no retrenchments at United Fram for a period of 1 year, and for a period of 3 years in all the other companies in the new merged entity.

Yet when the Competition Commission approved the merger on 30 September 2014, it ignored the agreement reached between the merger parties and SACTWU by creating conditions for the merger which were watered-down versions of the bilateral party-to-party commitments. For example, instead of a 3-year job-loss moratorium in all the other companies (except United Fram), the Commission introduced a condition that such retrenchments would be prohibited for 1-year only.

The ruling made little sense. After all industry role-players (who understand the sector much better than the Competition Commission) had bilaterally agreed on job-loss terms for the merger. But worse was the fact that the watered-down conditions created a regulatory problem since the merger parties could now renege on their commitments to SACTWU without contravening the conditions of the merger.

SACTWU appealed the ruling to the Competition Tribunal. We argued to replace the watered-down Competition Commission conditions with the stronger party-to-party commitments. Confirming the folly of the Commission’s decision, the merger parties did not oppose SACTWU’s appeal, even though the Commission’s conditions actually required less of them.

The matter was heard today by the Competition Tribunal. It has ruled to replace the original conditions made by the Commission with the bilateral jobs-friendly commitments reached between SACTWU and the merger parties.

It is a victory for mature industrial relations and for decent jobs and employment policies in our country.

ISSUED BY

ANDRE KRIEL, GENERAL SECRETARY, SACTWU

If further comment or information is required, kindly contact SACTWU’s Etienne Vlok on office number 021 4474570 or cell number 082 4480506.