Retail motor industry urges to be classified as an essential service

As the vehicle and automotive component manufacturing sectors prepare to shut down their operations, in line with the countrywide lockdown, the retail motor industry has urged government to classify its activities as essential services.

A 21-day national lockdown was announced on Monday by President Cyril Ramaphosa in an attempt to manage the impact of the coronavirus pandemic.

Jakkie Olivier, CEO of the Retail Motor Industry Organisation (RMI), said on Tuesday he was communicating with the appropriate channels at Business Unity South Africa (Busa) and the task team established by government “to motivate that a big portion of the retail motor industries’ activities should be classified as essential services, to support the other support structures providing essential services”.

Olivier said RMI member firms, which provide employment to more than 300 000 people, are continually involved in repairing police vehicles, ambulances and delivery vehicles.

He said the retail motor industry is not on the preliminary list of essential services, with the exception of fuel service stations.

“I have written and motivated the case for the essential services concerned to keep cars going at this time,” he said.

Repairs and maintenance

Olivier said in terms of designating the retail motor industry an essential service, this will largely apply only to the repair and maintenance side of the industry.

However, Olivier said there are other subsectors which are critical, such as the supply of parts and tyres.

Olivier questioned what happens in the lockdown period to a vehicle that has a mechanical breakdown or a flat tyre, adding that the tow truck industry should also be an essential service.

He claimed the United States and Australia are about to approve similar dispensations for the auto repair industry in their countries.

Mark Dommisse, chair of the National Automobile Dealers’ Association (Nada), is adamant that there has to be some dispensation to allow vehicle repairs to be done.

“Trucks have to have a place where they can be serviced if they break down and also the food sector with all the motorcycles riding around. I think something will happen,” he said.

Dommisse also questioned why vehicle dealerships cannot have an emergency number and back-up plan to help people when they call.

Human factor

The retail motor industry and many other industries are grappling with how to treat their employees during the lockdown and whether to adopt a ‘no work, no pay’ policy for the duration of the lockdown.

Olivier preferred not to generalise about this issue because businesses are adopting different approaches to it.

But he said the majority of the RMI’s 20 000 member firms are small businesses and will find it difficult to continue as normal because “there is no work and no income”.

However, Olivier said the bigger businesses are being encouraged to look after their employees as much as they can.

Olivier said in cases where its members cannot afford to pay their employees, the RMI is providing assistance in how they can claim from the different funds announced by Ramaphosa.

“So there is no hard-and-fast rule at the moment, but the labour law does allow certain flexibility on what to do under the circumstances,” he said.

Olivier added that there are, for instance, different leave provisions, such as special leave, sick leave or annual leave.

He said there are also short time arrangements where people work fewer hours and get paid less, as opposed to working the normal 45-hour working week.

Dommisse believes vehicle dealership firms will grant everyone paid leave and use this leave to subsidise the unpaid leave they will be taking in the ‘no work, no pay’ scenario.

UIF benefit

He said there is also the R3 500 per employee in Unemployment Insurance Fund (UIF) claims that government has offered for the unpaid work period, which is significant. Ramaphosa said on Monday that “in the event that it becomes necessary” the government will utilise the reserves within the UIF system to extend support to those workers in small and medium-sized enterprises (SMEs) and other vulnerable firms who are faced with loss of income and whose companies are unable to provide support.

He said details of these will be made available within the next few days.

In terms of the government lockdown announcement, all of the country’s vehicle manufacturing plants – which provide employment to more than 30 000 workers – will stop production.

Attempts to obtain comment on Tuesday from the National Association of Automobile Manufacturers of SA and the National Association of Automotive Component and Allied Manufacturers were unsuccessful.

Plant shutdowns

BMW SA announced last week it would be shutting down its Rosslyn manufacturing plant in Pretoria by the end of the week for two weeks, because of risks posed by the coronavirus disease (Covid-19) and its impact on demand for new vehicles.

The closure of the plant affects about 2 500 workers and other group employees.

Ford on Monday announced that it is temporarily suspending production in India, South Africa, Thailand and Vietnam in response to coronavirus.

The plant closures in SA apply to Ford’s vehicle assembly plant in Silverton in Pretoria, which employs about 3 500 employees, and its engine plant in Port Elizabeth, which has about 850 employees.

Ford Motor Company of Southern Africa GM of Communications Minesh Bhagaloo, responding to a question about the remuneration policy adopted by Ford during the lockdown, said the company has local agreements and arrangements with the local unions and government, and will pay its people accordingly.

BMW SA said the “flexibility instruments” agreed upon by the company will apply to the affected employees.

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Thabo Mogoroe, National Union of Metalworkers of South Africa (Numsa) Deputy Chair for the Hlanganani region, said on Friday the union had met with the management of BMW SA to discuss the financial compensation for employees during the plant shutdown period.

Mogoroe said the provisions of lay-off leave, which is a maximum of ten days, will kick in and means that workers will get paid leave for that period.

However, Mogoroe said management is thereafter proposing to use the “worktime account” as a measure of payment, which Numsa has rejected.

“The worktime account, also known as Siphephile, is like a loan. Workers will have to ‘pay back’ those days through overtime work which is why we have been calling for the entire system to be scrapped.

“As Numsa we are proposing that other alternative measures must be implemented instead.

“We have proposed that the Unemployment Insurance Fund should be used, or that the BMW Group must contribute something to workers in order to mitigate against the hardship which workers and their families will face during this period,” he said.