Premier Foods factory closure: talks break down

Negotiations at the Commission for Conciliation, Mediation and Arbitration (CCMA) over the possible closure of Premier Foods' fruit canning factory in Tulbagh have concluded without reaching an agreement. According to Nyaniso Gqalaqha, a representative from the Agricultural, Food and Allied Democratic Workers' Union (AFADWU), Premier objected to two workers' representatives taking part in the talks.

The deadline for the consultation period between Premier and the unions at the CCMA is set for 26 September. Gqalaqha also reported that Premier disputed the participation of Malvern de Bruyn, the Western Cape provincial secretary from COSATU, who had been in the previous set of negotiations. The company further objected to the inclusion of a union shop steward, arguing he was a seasonal employee and not a permanent staff member, thus ineligible to participate as an AFADWU representative.

The dispute was forwarded to the commissioner, who suspended proceedings and is scheduled to make a ruling before talks resume on 8 September. Premier announced that the consultation process regarding the factory's closure is still ongoing and declined further comment due to respect for the consultation process. The company emphasized its commitment to engaging in good faith and exploring potential solutions for affected employees, farmers, suppliers, the community, and the broader value chain.

The factory's closure would impact 246 permanent staff and 178 temporary workers, totaling 424 employees according to the company. However, Gqalaqha stated that no further discussions about alternatives to closure had taken place. The union and COSATU have called for a temporary suspension of the closure process for at least a year to allow for alternative solutions to be explored.

COSATU, with input from another affiliate, the Southern African Clothing and Textile Workers' Union (SACTWU), is also questioning Premier's handling of the closure on competition law grounds. The Competition Tribunal approved the merger of Premier and the Rhodes Food Group in March, subject to conditions, including no layoffs due to the merger during a three-year moratorium.

A clause inserted at the request of SACTWU stipulates that workers and unions are not required to prove a link between retrenchments and the merger; the burden of proof falls on Premier. The conditions do permit retrenchments for non-merger-related operational reasons, and Premier maintains that the factory's closure is a financial and operational decision, not a result of the merger.

The Competition Commission is currently investigating whether the closure violates the conditions attached to the merger approval and whether all pertinent information was disclosed during the merger investigation. If a breach is found, the competition authorities can impose a fine of up to 10% of the firm's annual turnover in South Africa and its exports from South Africa in the previous financial year, or revoke the merger approval.

The commission aims to conclude the investigation within the next three months. COSATU and affiliated unions plan to protest outside Premier Group's annual general meeting in Midrand on 9 September.