About 1,200 workers at the embattled Maseru E-Textiles (Pty) Ltd have launched a fight in a last-ditch effort to secure their severance packages before they are sent on an unpaid three-month layoff.
The stranded workers suspect the ‘short time’ policy that will be effective from next month, (July) is a ploy to shut down the textile company altogether without paying them and leaving them in dire financial straits.
Maseru E-Textiles is one of the several clothing and textile companies heavily reliant on exports to the United States (U.S), which recently imposed a 50 percent tariff rate on imports from Lesotho.
However, this has been suspended for three months to allow negotiations to take place. It is against this background that some local firms are planning to place their employees on reduced working hours covering this period.
Textile workers unions have warned of a potential closure of the sector, saying it would have far-reaching consequences for the nation’s economy as it employs approximately 15,000 workers.
Besides Maseru E-Textiles, other textile companies including Precious Garments (Pty) Ltd, Formosa, Taiwan, Neinshin and Tzet, are also reportedly preparing for a potential shut down this year, exacerbating the unemployment crisis in the country.
The secretary general of the United Textiles Employees Union (UNITE), Solong Senohe, said they had a meeting with Maseru E-Textiles management on Monday this week to discuss the three-month shutdown from next month.
The company explained that due to the 50 percent tariff imposed by the U.S., it is no longer receiving new orders and would therefore have to finish existing orders and shut down until the Donald Trump administration reviews the tariff, he said.
According to Senohe, the union and the company reached an agreement that workers should work for this month (June), finishing the existing orders and any work still in hand.
As part of the agreement, Maseru E-Textiles has committed to pay the workers who qualify for severance pay M1,000 per month during the three-month short time period, starting in July and ending in September.
Workers who do not qualify for severance pay have been promised leave pay from January to September this year, Senohe said.
Despite the agreement reached by the union and the company, Senohe acknowledged that both the severance and leave pay to be provided will not be sufficient to sustain workers who have lost their jobs.
He indicated that the union will be meeting with the government through the ministries of labour and trade to propose a contingency plan for supporting textile workers who lose their jobs due to factory closures.
“It would be difficult for these workers to take their children to school, pay for household expenses and provide for their families after losing their jobs, hence we are calling on the government to intervene and offer assistance while they wait for a decision from the U.S government,” Senohe added.
The striking Maseru E-Textiles workers were denied entry into the factory premises by police officers manning the locked gates.
‘Mamaieane Manyabeane, who was employed for three years at Maseru E-Textiles, expressed the frustration felt by many of her colleagues, saying it was unfair for the company to send them away without any compensation after devoting so much of their time and effort.
Manyabeane said they have become increasingly suspicious that the company was not being honest with them, as it has started to remove items like fridges and other office equipment.
“We think this company is leaving for good, because it has been struggling to sell most of the products to the U.S. We have been producing as normal but there were no new orders placed since February this year, so we think the company does not have money,” she pointed out.
She added: “If we are sent home for three months without our money, this means we would be struggling to survive with our families for this period. We need our money so that when we leave, we know the company does not owe us.”
Contacted for comment this week, the Minister of Labour and Employment, Tšeliso Mokhosi, said the government was aware of the impact of the new US tariff on the country’s textile sector.
“We are aware of the challenges the US tariff have caused to our textile industry and have been engaging with local textile factories to explore selling their products to South Africa instead, but they are hesitating.
“We are working with the minister of trade to encourage these companies to accept orders from South Africa. South African buyers have shown interest in purchasing 80 percent of products from Lesotho suppliers, and only 20 percent from outside the region,” Mokhosi said, adding that it is a significant opportunity for Lesotho to shift its focus towards the South African market.
We must work closely with our neighbour to capitalise on this opportunity, he urged.
Last week, the Central Bank of Lesotho (CBL) announced that Lesotho’s economy suffered a significant setback in the first quarter of this year, contracting by 5.3 percent, due to weak consumption, reduced government spending and poor performance in the transport and construction sectors.
CBL governor, Dr Maluke Matete noted that manufacturing and financial services, which were bolstered by textile exports and credit growth proved to be more resilient, but the overall economic momentum remains fragile.
The country’s current account surplus narrowed to 0.7 percent of gross domestic production (GDP), in the first quarter this year, reflecting weaker exports and rising service outflows. Despite resilient income inflows, the trend signals mounting pressure on external sustainability, he explained.
