TRALAC - Trade Law Centre

Swaziland: 1450 jobs to be lost at textile factory

Wednesday, 22 October 2014 Published: | SIBUSISO ZWANE

Source: Times of Swaziland

The Tex Ray factory is set to retrench all its 1 450 workers by November 5, 2014 and close down following the country’s loss of AGOA.

This is contained in a letter of notice that was written by the factory Manager Lisa Chang to the Swaziland Manufacturing and Allied Workers Union (SMAWU) and Labour Commissioner Khabonina Dlamini.

The letter, which is dated October 8, 2014 and titled; ‘Re: Notice of intention to retrench in terms of Section 40 of the Employment Act 1980, read together with clause 11.6 of the recognition and procedural agreement’, was sent to the union yesterday.

The letter said following the removal of the country from beneficiaries of the Africa Growth Opportunity Act (AGOA) with effect from January 2015, the company was unfortunately the bearer of the negative effects from such exclusion.

AGOA offers preferential access to the United States market for goods from about 40 Sub-Saharan nations that meet the required political and economical standards.

The removal of the country as a beneficiary under the Act means that the country will no longer have the preferential access to the markets and this would be effective from January 1, 2015. It is worth mentioning that AGOA contributed in fighting unemployment in the country as over 17 000 people were employed in the textile firms countrywide. 

“We advise that consequent to the country’s exclusion from being a recipient of benefits envisaged in AGOA, with effect from January 2015, the company is unfortunately the bearer of the negative effects from such exclusion.

“The company exports 100 per cent of its products to the United States of America market and due to the country’s exclusion, we have been unable to secure any further orders from our clients,” reads part of the letter, which this publication has in its possession. The letter went on to state that in the absence of any orders this placed the company in a difficult position particularly because it has also been unable to secure alternative customers. It said in light of this, the company has found itself without any other alternative remedy but to implement a retrenchment exercise that would affect all the 1 450 employees.

“It is further unfortunate that all employees, including expatriates, shall be affected. We currently have 1 450 employees engaged on a permanent basis. In light of the fact that Swaziland will stop benefiting from the Act with effect from January 1, 2015, our customers have requested that we make the last shipment on or before November 15, 2014 so that the products can arrive in the USA before the deadline of the beginning of next year,” reads part of the letter.

The company mentioned that it anticipated that the retrenchments would come into effect on or after November 5, 2014.
Tex Ray Administrator Jim Wang confirmed the matter. He said after the country was removed from AGOA, and the company’s headquarters in Taipei failed to persuade the USA to continue buying their products from Swaziland despite the fact that it was removed from the Act, they were left with no choice but to retrench all the workers.

“We are retrenching all the workers but that does not mean the company is leaving the country. The company will be closed for a short while because we will be trying to increase the market in Southern Africa. Maybe at the beginning of next year, we will start hiring the workers again in stages depending on the market,” he said.

The administrator has assured the workers that they would get their terminal benefits to sustain them while the company tries to find an alternative market for its products.

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