Walmart’s union stance may halt takeover deal

Walmart may be refused permission to expand into South Africa after the government and a coalition of trade unions insisted it must give assurances about its workers’ rights policy.

The South African Competition Tribunal is hearing evidence on Walmart’s proposed takeover of local firm Massmart, in which a coalition of powerful trade unions is insisting the deal be allowed only if it protects the treatment of workers, union rights and local procurement.

The South African government will join the South Africa Commercial, Catering and Allied Workers Union, UNI Global Union and the United Food and Commercial Workers International Union (UFCW) of North America to urge strict conditions.

Walmart’s record on collective bargaining and other labour rights has long been attacked in the US and abroad, as the company’s progress on union rights has allegedly not kept pace with its moves on other CSR issues.

The company is said to have depressed retail wages where it operates, as it puts pressure on suppliers to cut costs. Massmart is already accused by unions of sacking workers to make itself attractive to its potential buyer.

Christy Hoffman, of UNI Global Union, a worldwide federation representing 20 million workers, said: ‘Walmart has a history around the world of suppressing union and worker rights.

‘In countries where the company has not been legally obligated to accept a union, like the US and Canada, it has brutally suppressed all of the workers’ organizing attempts.’

Michael Bride, of the UFCW, said: ‘In the US we have clearly seen the race to the bottom as the “Walmart model” has come to dominate the industry.

‘The Competition Tribunal has the opportunity to stop this from happening in South Africa and to impose conditions that will protect economic growth.’

The unions have submitted evidence from US labour experts. Kenneth Jacobs, chair of the University of California Berkeley Centre for Labour Research and Education, told the tribunal: ‘Given Walmart’s well-documented history of violations of labour and employment law elsewhere, if the tribunal does elect to permit  Walmart to acquire Massmart Holdings, conditions should be attached to the acquisition that would prove legal backing to Walmart’s commitments to the commission.’

Unions are demanding that products are sourced locally, to counter Walmart’s perceived strategy to import a significant amount of products.

Massmart’s chief executive Grant Pattison said imposing procurement targets may lead to job losses. He said: ‘If Massmart/Walmart tried, or was forced, to do this alone, the likely outcome is that the merged entity will be forced to shed jobs as its competitors gain market share at its expense’.

So far Pattison has refused to guarantee union recognition where it is recognized at present in the company, warning that ‘a lot is going to change’. He is concerned that the proposed conditions will encourage unions to exaggerate wage demands.