1 500 lose jobs



MASERU – Two Ace Apparel (Pty) Ltd factories in Ha Maqele, Maputsoe, have shut down, throwing 1 500 workers out into the cold pool of unemployment. The 1 500 workers add to about 20,000 workers that have lost their jobs in the clothing and textile industry since 2019, about half of which were retrenched in 2023, this is according to the Lesotho Labour Council (LLC).

In an interview yesterday, the secretary general of the National Clothing Textile and Allied Workers Union, Tṥepang Makakole said the employer, Vishan Clothing, instructed the management to shut down the factories until the government has informed them when the workers will get their severance pay. He said the severance pay accrues from the previous investor who disappeared last year, leaving the workers unpaid for their December salaries and other entitlements.

This is not the first time Ace Aparrel hogged the media limelight after the same thing happened last December when its two proprietors vanished into thin air, leaving workers stranded and unsure if they would get their December wages and wondering if they still had jobs.

Trade, industry, business development and tourism minister, Mokhethi Shelile told a press conference last December that the government had learnt that the factory owners had fled to the Netherlands where they originally came from. He pledged the government’s determination to pursue their extradition to Lesotho.

Makakole told the media at that time that when workers reported for work on Monday, they could not access the factory because door locks had been changed. “The owners have vanished into thin air without any explanation and the factory workers are left stranded and practically jobless as we speak,” he said. Makakole said local managers entrusted with manning the factory could not open the doors on Monday morning as the locks had been changed.

He said that this was not the first incident of this kind in the clothing and textile sector, after Lesotho Umbrella, Peter Blond and CMT Trading factories investors absconded in similar fashion before. The trade union leader said foreign investors often go AWOL when they run into debt because if they have to lawfully close the factory, it means they would be obliged to settle their debts and often they do not have the resources to.

They resort to simply disappearing leaving everything behind in the hope that the workers would just help themselves to anything of value to make up for their lost wages and severance pay. During last December’s sudden closure of the same company’s factory workers told the media that when they got to work early morning on that fateful Monday everything appeared normal until after 7 am when human resources officers informed the workers that the locks had been changed so they could not open the premises.

The firm’s local managers could not get of the directors as their phones rang unanswered until the human resources manager reported the matter to the police who, upon inspection of the scene, ruled out the possibility of any break-in. The December saga ended on a happy note when Minister Shelile announced that the government had quickly saved the situation by securing a new investor, Vishan Clothing, to normalize operations and save jobs.

However, the issue of severance pay liable to the previous owners remained a sticking point. The joy was short-lived. Around early March this year workers at two Ace Apparel (Pty) Ltd factories were left stranded again after their management locked them outside.

Makakole at the time told the media that the employer, Vishan Clothing, instructed the management to shut down the factories until the government answered when the workers will get their severance pay from the previous investor who vanished last year without paying the workers their salaries for December, as well as other benefits.

Trade unions and workers seemed to have the expectation that the government or at least LNDC would do something about it. Makakole said this week that back in April, employees were instructed to take a brief leave with the assurance of returning to work in May. However, they were taken aback when the Lesotho National Development Corporation (LNDC) informed them that the company is closed this week.

“Workers were supposed to be back at work in May but were all devastated to discover that the firm is closed,” he said. The textile and apparel manufacturing industry remains Lesotho’s largest formal private sector employer in the country and overall it is the second biggest employer after the public service. Wages earned by workers in this sector therefore have a large economic footprint in both the local economies where the factories are located and the national economy at large.

According to the Lesotho National Development Corporation’s (LNDC) Industry Status Report dated March 2021 at least 6064 workers in the clothing and textile sector lost their jobs due to the COVID-19 induced economic meltdown. The report shows that between the period of March 2020 to March 2021 factory closures and downsizing immensely contributed towards the sacking.

“Two factories namely, Coating Company and Huan Sheng ceased operations while Presitex and CGM merged. Nien Hsing International combined its five companies into three and is planning to combine the three companies into one,” the report read. The report further highlighted that lack of demand on the market led to the laying off of factory workers. “Another contributing factor to employment is the decline in purchase orders as a result of the Covid-19 pandemic.”

However, the report further indicates that the textile sector still remains the top employer in Lesotho. “The manufacturing industry constitutes 88. 8% of total employment in the industry despite the 12.9 % decline,” the report reads highlighting that printing and embroidery sectors experienced the most employment decline of 82.4 percent as a result of a company that shut down, followed by clothing and textile sector at 12.9 percent.

In November 2020, a report titled “The Impact of Covid-19 on the Manufacturing Industry in Lesotho: A Case Study of LNDC-Assisted Companies” was published. The report highlights that as a result of the pandemic, certain factories in Lesotho were compelled to lay off workers and implement temporary layoffs.

It went on to state that the employment levels in 2020 were notably lower compared to the same period in 2019, with the lowest employment rate of 30,741 recorded in April 2020. This figure represents a 24 percent decrease compared to the employment rate during the corresponding period in 2019. The decline in employment can be attributed to the lockdown measures and closures of companies.

“Some companies were forced to retrench workers while some factory workers had their hours cut during the lockdown. The highest reported employment level was 43 542 in February 2020, which was higher than that of the same period in 2019.”

The November 2020 report further indicated that the COVID-19 lockdown had a lesser impact on the manufacturing sector than expected. It is advisable to introduce relief measures to mitigate the effects of COVID-19 on businesses, as advised by the government. Prioritizing initiatives that support trade and investments is crucial for achieving private-sector-led growth and strengthening the operations of businesses in the sector.

“The potential to turn around the state of the economy and relief to government challenges that include high deficit and wage bills can be explored through focusing and committing to implementation of relevant business environment reforms to entice the private sector to participate,” read the report.

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