Labour has called on the government to intervene after unions claimed that SA Breweries (SAB) has begun engaging with them on a possible section-189 retrenchment process.
The company is fighting the outright ban President Cyril Ramaphosa imposed for a third time in December, arguing in court that such a prohibition infringes on the constitutional right to trade freely.
The liquor ban was instituted amid a second wave of Covid-19 infections, as the government argued it would free more hospital beds if it could reduce the number of casualty cases that usually arise from alcohol-related assault and road accidents.
On New Year’s Day health workers at the Chris Hani Baragwanath Hospital praised Ramaphosa, saying that for the first time they could remember the trauma unit was empty on New Year’s Eve.
However, the ban has now raised fears that booze companies, unable to trade, will look to retrench workers to mitigate their losses.
Mayoyo Mngomezulu, general secretary of the Food & Allied Workers Union (Fawu), says any retrenchments would be in addition to other cost-saving measures taken by companies such as SAB, which implemented an 18-month 10% across-the-board salary cut in July last year due to the first alcohol ban.
The government has filed a notice indicating that it will oppose SAB’s court application. It is due to file its full response this week.
SAB in its founding affidavit says it has told the government it believes the conditions it had agreed to when the merger between AB InBev and SABMiller took place in 2016 have now been suspended as a result of the new ban in December.
The SA Liquor Brand Owners Association has applied for a deferment of the payment of excise duties until the alcohol ban is lifted
Among those conditions are provisions that the company does not retrench workers and invests R1bn locally over five years. The five-year period is about to end, but according to Mngomezulu the company has already begun engaging with unions on a potential section 189 process, which allows an employer to dismiss employees for operational reasons.
Mngomezulu says the union’s view is that SAB is still legally bound by the merger agreement. However, he adds that the government should have consulted the industry before imposing the latest ban — something it conspicuously didn’t do.
He says labour made proposals to the government last year on ways to curb alcohol abuse besides a total ban on sales, but nothing came of the approach.
The SA Commercial, Catering & Allied Workers Union did the same. Spokesperson Mike Sikani said the union wrote to Ramaphosa as well as trade & industry minister Ebrahim Patel last year offering alternatives to the alcohol ban but has not had a response. It proposed reinstating alcohol sales on certain days only, ensuring a strict curfew remained in place and having better law enforcement.
The conditions around the 2016 merger between the beer giants were signed off by the trade & industry department. It has not responded to questions regarding SAB’s suspension of the conditions.
Mngomezulu says workers and their families are bearing the burden of the ban, which the union believes is also fuelling an increase in illicit alcohol trading across the country.
"There are 165,000 jobs on the line in a country with more than 40% unemployment. I am afraid the president got it wrong this time in how he is balancing livelihoods and lives," he says.
"At the moment, the alcohol industry and workers especially are going to suffer because the government is bad at policing and law enforcement."
Mngomezulu says Fawu wants the government to intervene by placing conditions on companies to ensure that, should they retrench, a database of laid-off workers is created so they are rehired once production and sales return to normal.
He is concerned at the way the government is not consulting ahead of major decisions, because he says this prevents large players in the industry from suggesting alternatives or ways to save jobs.
Last week, the SA Liquor Brand Owners Association announced it had applied for a deferment of the payment of excise duties until the booze ban is lifted.
In a statement, it said the industry pays about R2.5bn a month in excise tax. It pointed out that companies were granted a deferment of at least R5bn in excise payments for July and August last year, which they had paid after returning to operation in October.
The wine industry also wrote an open letter to Ramaphosa this week, urging him to open talks with it and lift the ban. The industry is on the eve of its 2021 harvest and has warned of the risk of a significant amount of unsold stock going to waste, at a huge economic cost.
The letter says the industry’s value chain plays a vital role, creating 265,000 jobs and contributing R55bn or 1.1% to GDP.
According to current level 3 regulations, the ban remains in effect at least until mid-February, when it will be reviewed by the National Coronavirus Command Council.
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