BFTU position on the current wave of retrenchments and closures

The Botswana Federation of Trade Unions (BFTU) would like to raise a concern on the spate of company closures and retrenchments that are becoming characteristic of our economy in recent months.

We recall that last year at least two manufacturing companies, two diamond polishing companies and one mining company have closed down for various reasons. Over and above that we have a number of companies that have retrenched employees and some are threatening to do so. As a result of these actions hundreds of workers have lost their jobs and more face prospects of job loss and, consequently their sources of income.

This situation of closures and retrenchments is very worrisome and should be treated as a national crisis and not just a problem for retrenched workers and normal business cycle company closures. Retrenched workers join the ever increasing numbers of the unemployed. Their households are negatively affected as they lose their sources of income. They become the burden of the state either for support through social safety nets which are not as robust as those found in other developing countries with unemployment insurance.  Workers lose their dignity as they, overnight, turn into paupers. Some lose properties such as housing paid through mortgages, while some lose household effects to furniture shops. Some are evicted from rented accommodation. Job losses also affect economic output in the long run.

But what is the legal environment under which these things happen? Botswana has very weak legislation on retrenchment of workers. It offers very little or no protection at all. In Section 25 of the Employment Act, workers are only entitled to be consulted when retrenchment is being contemplated. There is no explicit provision in the law compelling employers to offer retrenchment packages nor is there are law compelling employers to have retrenchment policies to guide the processes of retrenchment. Employers almost always determine retrenchment packages unilaterally without entering into negotiations with their employees with a few exceptions where there is union presence.

But even with the presence of unions some companies offer very little space in their negotiations. The above scenario is worsened where employees do not belong to a trade union as they are not afforded any form of collective bargaining and they remain at the mercy of the employer. Except the obligation on the employer to inform the Commissioner of Labour and Social Security, there is no legal obligation to monitor whether the retrenchment process is carried out legally and fairly. Employees who feel cheated during retrenchments have to endure the long and tedious process of litigation which may take up to three years or more.

What about terminal benefits? With an exception of a few big companies most employers in Botswana do not offer employees pension, in preference for severance pay. When the company closes the employees are only entitled to prorated severance pay which some companies even fail to pay. The implication is that when an employee gets retrenched they immediately overnight become paupers, with no mandatory social protection. The process of setting up a compulsory occupational pension scheme is still ongoing, which would otherwise go a long way in alleviating this precariousness.

The majority of workers affected by these retrenchments are unskilled or semi-skilled workers. This category always find it difficult to secure alternative employment after retrenchment due to their limited skills. The result is that they end up joining the queue for Ipelegeng which does not offer decent and sustainable employment more so that it is not coupled with re-skilling of these workers. Young people are the most affected age category as companies follow religiously the first-in-last-out principle in the law.

 BFTU would like to urge workers to join trade unions so as to affectively represent their interests. A united workforce under trade unions can better combat the current scourge. Further to that there is need for a strong national labour center consisting of all workers from different economic sectors including the public sector. Such a labour center will be able to effectively influence labour and social policy in our country and at the same time effectively coordinate the activities of labour unions towards one common goal.

BFTU calls on the Government Ministries of Trade and that of Labour and Home Affairs to pay special attention to the current wave of closures and retrenchments and engage with the affected industries and workers, to explore alternatives to retrenchments. Government is duty bound to identify the causes of these closures and retrenchments and ways to ameliorate them.  We urge Government to engage with workers and businesses on how our employment law can be improved so that adequate protection for workers can be put in place in case of retrenchments. Further the Government must proactively promote collective bargaining in the country so that worker organizations are strong enough to bargain with employers on issues including closures and retrenchments. In this way workers will not always walk away empty handed and overnight to become the burden of the state. As part of this, we also call upon Government to ratify the Tripartite Consultation and Collective Bargaining Conventions. Lastly, Government must fast-track the universal occupational pension scheme or policy so as to enhance social protection for the workers.


Gadzani Mhotsha (Mr)

Secretary General (BFTU)

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