TRALAC - Trade Law Centre

Swaziland: Mass retrenchments at Leo Garments following AGOA loss

Thursday, 26 February 2015 Published: | NOSIPHO SHONGWE

Source: Times of Swaziland

Leo Garments is the latest casualty of the AGOA loss as the company has retrenched a bulk of its workforce.

An inside source said there are less than half of the initial workers remaining in the factory and they also face further retrenchments. The prevailing situation at the factory situated at the bottom of the Matsapha Industrial Sites, which has left hundreds of workers in despair and uncertainty, is a result of the country’s removal from benefitting from the African Growth and Opportunity Act (AGOA) with effect from January 2015. The decision to remove the kingdom as a beneficiary was announced in June 27, 2014.

The matter was brought to finality in December when it was revealed that indeed Swaziland was not among countries expected to enjoy AGOA benefits as in previous years. While the current situation has been attributed to the loss of AGOA, the factory has also failed to secure local markets such as manufacturing clothing for chain stores.

According to a letter, which was handed to those affected by the retrenchment exercise last month, ‘the company failed to pass the audit checks performed by the interested chain stores, resulting in lack of work for the employees, resulting in the retrenchment exercise to be carried out February 6, 2015’.

“The partial retrenchment exercise expected to be carried out is to allow the company to continue searching for job opportunities with a minimal labour force,” the letter read in part.

The letter, dated January 20, 2015, stated that American buyers had informed Leo Garments that they would not be placing orders this season until the AGOA situation is settled in the country. “We tried to secure orders from South African chain stores but it is unfortunate that we failed to pass the audit by buyers and as such we will have no orders until we reaudit,” further reads the letter signed by the factory Human Resources Manager John Mabuza.

The letter explained to affected workers that due to failing the audit, Leo Garments failed to secure orders on time as they needed to undergo auditing again.

The company stressed the fact that it needed to cut down the workforce in order to keep the company afloat until they were able to secure job opportunities.

The remaining workers may be affected by imminent lay-offs expected to be implemented soon. In fact, workers were left apprehensive on Tuesday when they were instructed to clean the factory floor and prepare to go home.

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