Nearly 1,100 workers at Evraz Highveld Steel are set to lose their jobs after being served with section 189 notices as the company scrambles to save itself.
Evraz Highveld Steel CE Johan Burger on Thursday confirmed that up to 1,100 employees, or 50% of the firm’s staff, faced retrenchment.
Companies can issue section 189 notices, in terms of the Labour Relations Act, to institute dismissals for operational requirements.
Evraz’s steel works in eMalahleni, Witbank, were out of commission as a result of the crisis the company had been going through, he said.
Evraz Highveld was placed under business rescue in April.
Mr Burger called on the state to institute preferential procurement for the struggling steel industry.
"Local contracts and government expenditure should act as drivers for domestic demand," he said. "If you want a successful economy you need a manufacturing sector."
Evraz Highveld is not alone in its predicament in choosing between keeping employees or instituting bruising job cuts to stay afloat.
Scaw Metals Group CE Markus Hannemann cited import duties as a quick fix to the sector’s troubles.
Earlier this month, Scaw also issued section 189 notices.
"This could potentially impact about 1,000 of our employees throughout our local operations," said Mr Hannemann.
The spectre of retrenchments prompted unions to call for crisis talks with affected companies, the first of which took place on Tuesday.
The National Union of Metalworkers of SA, Solidarity and the United Association of SA again met the CEOs of Arcelor Mittal, Evraz Highveld Steel, Scaw Metals Group and Macsteel on Thursday.
Marius Croucamp, Solidarity’s head of the metal and engineering industry, said: "The government should declare (this) a designated industry. Our industry is vulnerable, we need to take steps to protect it."
Earlier on Thursday Solidarity issued a statement announcing the establishment of a task team, comprising unions and employers, to deal with the crisis.
The team, which met late on Thursday, will present proposals for possible solutions to the government at the end of the month.