Barely days after Mittal Steel announced to cut 800 jobs in its South African operations, a leading trade union of that country slammed the move and warned that it could spark off a nationwide outrage.
"We plan to intensify our mass demonstrations in protest against outsourcing and voluntary retrenchments in the company," National Union of Metal Workers of South Africa Chief spokesman Mziwakhe Hlangani told PTI in an e-mailed statement from South Africa on Monday.
The controversy arose when Mittal Steel CEO Davinder Chugh told visiting mediapersons at the Mittal's Vanderbijlpark Plant near Johannesburg that Mittal SA expected cost to rise by 10 per cent from the average level in 2005.
Meanwhile, the Congress of South African Trade Unions was outraged by the Mittal Steel SA's plan to cut 800 jobs and described it as a "cruel blow to workers and their families who face a bleak future of poverty and struggle for survival. We see the world's biggest steel producer ruining the lives of 800 families just to save rands 160 million per year. To Mittal, this is a drop in the ocean but to the retrenched workers the loss will be huge," it told the South African media.
It demanded immediate reversal of the decision failing which it pledged full support for any action its affiliate NUMSA undertook.
"In our understanding, there is going to be no forced retrenchments. We have an agreement forcing the moratorium on forced retrenchments until June 2007 and then further negotiations would go thereafter," Hlangani reminded.
In an earlier e-mail, Hlangani had warned that Mittal Steel could face possible revolt by union workers in distant South Africa against its lay off policies.
NUMSA is already on the war-path against the world's biggest steelmaker for laying off thousands of workers under the garb of restructuring and has sought the Thabo Mbeki government's intervention to stop Mittal Steel from carrying out the same.
Hlangani said NUMSA was irked with Mittal Steel for enforcing its retrenchment plans and "outsourcing of core operations as employees were forced to take retrenchment packages and were again re-employed with either less wages or no basic working condition benefits," he pointed out.
He said NUMSA has demanded that Mittal Steel stop its restructuring plans and take into consideration public service framework agreement, which considered social plans and re-training of the possible retrenchees and should involve the labour government in talks on restructuring.
However, Mittal Steel denied the allegations and said that in 2004 the company had signed a one-year no forced retrenchment pact with all its unions, which was again renewed for two years last year.
"NUMSA, through its national office is a signatory to this agreement," Mittal Steel South Africa Operations Chief Tami Didiza said in the statement.
"The rationale behind signing the agreement was to create a conducive environment whereby the company could achieve its labour optimisation while protecting employees from forced retrenchments," Didiza said.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group