The short version: Pick n Pay announces labour model overhaul, using retrenchment law to change contracts
The next phase of Pick n Pay’s turnaround strategy has been launched, with CEO Sean Summers announcing early this week that in an attempt to reset costs, the Group has initiated a labour restructuring process affecting around 22,000 store-based employees. The process formally falls under section 189 of the Labour Relations Act, i.e. dismissals based on operational requirements, aka retrenchment. However, the retailer has said that the intention is not to reduce headcount, but rather adjust existing working arrangements, like minimum hours, inflexible scheduling, and certain benefits/allowances that currently exceed market standards. “We were paying over the market norms of our opposition,” Summer said. “We can no longer continue to just talk about it. We have to bring some action to the table.” The only way to legally ensure that this is achieved is by ‘retrenching’ staff and rehiring them with new employment contracts. Pick n Pay has said that while hourly rates will not be reduced, overall earnings could be affected by changes in hours worked. And one of the key changes being looked at is around labour flexibility – its current model, where many experienced employees work weekday shifts, doesn’t align with shopper behaviour, which now sees peak demand in the evenings and over weekends. “The real skilled people we have are not really there when customers are shopping,” said Summers. By law, the consultation process (involving affected staff and trade union SACCAWU) must run for 60 days and will be facilitated by the CCMA.





