Staff not businesses pay price of boycotts
The boycott of any business is hardly ever sustainable and invariably makes a big noise that doesn’t really affect the bottom line. During apartheid, numerous businesses were boycotted by the majority of the population of South Africa. They hardly felt the boycotts, and invariably after a few months, they were abandoned.
As a labour lawyer, I look at the effect on staff and on the long-term sustainability of the business. Today, the business environment is far more complex. Cross shareholding and differing interests have made businesses not as uniform as they used to be. Larger businesses which incur the wrath of small interest groups are able to sustain boycotts, but it’s the workers who face the immediacy of the short sustained downturn. I’ve been involved in numerous retrenchment programmes over the past 40 years in which the first people to be hurt were the staff. When turnover is affected, a truism in any business is that management seeks to cut down on its overheads. Invariably, the biggest overhead is salaries. Clearly, during a boycott, either sales or production are affected on a short-term basis, and management seeks to retrench. More often than not, this retrenchment programme overacts, and more staff than needed are subject to retrenchment.
I’ve also found that when businesses feel the need to shrink their staff because of other factors such as computerisation, outsourcing, and mechanisation, they have held over with the retrenchment so as not to affect staff. Especially in South Africa, where jobs are hard to come by and we have almost 50% unemployment, many businesses have just carried on with the same staff numbers. When an external factor such as a boycott rears its ugly head, management then reacts by retrenching not only those that need to go but others because of the other factors mentioned above. In essence, the people who suffer the most – and sometime the sole sufferers – are the staff. This suffering is immense specifically because the chances of finding an alternative position in South Africa is minimal. Those boycotting businesses need to understand that the first victim of a boycott is a staff member. Those organising boycotts should analyse who works at the coalface, and who’ll be suffering the most.
Obviously, boycotting Jewish businesses has attracted a lot of media coverage online and in print. Those boycotting the businesses and planning the boycotts don’t seem to have thought the issue through at all. I don’t intend to touch on the reasons for the boycott and/or the philosophy behind the call.
Being a labour lawyer, I’m aware that a boycott could unhinge the delicate balance between productivity and profitability. I don’t hold a brief for the national business Cape Union Mart. I am, however, aware that this business is proudly South African and one of the few large clothing businesses left in South Africa which makes its own range in South Africa. The businesses appear to be staffed by South Africans of all types, and I’m aware that the majority of the manufacturing and retail staff are from the previously disadvantaged community. I do need to disclose that I’m a regular customer, and find its apparel just perfect for my lifestyle. I have had occasion to visit its factories, and I’ve frequented literally dozens of its outlets across South Africa. I’m acutely aware that the staff are overwhelmingly courteous, happy, and well trained. As a labour lawyer, I engage regularly with staff members, who appear to come more than 90% from black, coloured, and Indian groupings.
I’m also aware that I’ve never seen or heard about a previous retrenchment at this business, even during the COVID-19 pandemic. Unlike other manufacturing and retail businesses, it appears that Cape Union Mart rewarded its staff by taking no retrenchment action at all. However, a boycott could push that over the edge. Who will suffer? Obviously, the biggest expense of a business of this nature is salaries. If the boycott is even mildly successful, the only people who will suffer are those that get retrenched. Those that do get retrenched won’t just have the difficulty of finding another job but will invariably not receive a salary similar to that being paid to them at the moment. I’ve taken the time and trouble to speak to many of its staff members, and asked them to share information about their salary and benefits. To a person, they’ve all said that they won’t give me the exact details, but they’re earning far in excess of their counterparts in other businesses of a similar nature. All these staff, no matter their religion, colour, race, or creed have shown enormous loyalty to the business. It’s a crying shame that it’s those people who will suffer from the boycott. If this is the reason for the boycott, then I must applaud those boycotting the business as they will effectively ensure that many luckless South Africans will lose their jobs.
It’s important for me to point out that I don’t know whether the boycott is even making a dent in the turnover, and I don’t know whether management has ever considered the possibility of a retrenchment. What I do know is that businesses in a similar predicament in the past have followed the route of mass retrenchment. This needs to be avoided in South Africa, especially in the unemployment crisis we’re facing.
- Michael Bagraim is a labour lawyer.