As job cuts loom at Putco, labour unions have accused the government subsidized bus operator of financial mismanagement.
Putco announcement yet another job cuts less than five years after the previous one, saying over 200 jobs are now on the line due to the financial distress caused by the COVID-19 pandemic.But the four labour unions organising in Putco accuse the company of mismanagement.
National Union of Metalworkers of South Africa (Numsa) spokesperson, Phakamile Hlubi-Majola said the company gets financial relief in a form of subsidy from government and that its financial crisis is self created.
“They have been receiving the subsidy from government consistently even throughout the lockdown. Generally they receive a 100% subsidy, but there were times during the lockdown when they received 60% and this is one of the reasons we don’t support the rationale,” said Hlubi-Majola.
She added: “We don’t support the reason for them to retrench because they are getting a subsidy. There are other privately owned company that don’t get a subsidy.”
South African Transport and Allied Workers Union (SATAWU) national sector coordinator, Solomon Mahlangu, had this to say: "We don’t think the company suffered as workers suffered as far as financial and economic conditions.”
Mahlangu said Putco has been collecting money from bus fares and 60% of government subsidy, which should be able to cover the company's operating cost.
Transport and Omnibus Workers Union (Towu) and Transport and Allied Workers Union of South Africa (TAWUSA) said Putco is paying a lot of money to subcontractors.
The unions claim some of the subcontractors are unnecessary and a wasteful expenditure as Putco can insource the same service. They also added that the fleet of buses being used is in a bad state with most of them getting stuck at the depot and unable to service customers.
Putco has, however, denied allegations of financial mismanagement
“We are obliged as contracted by government to ensure that we support small businesses. Part of our contract requires us to bring on board subcontracting of small operators and that is what we are doing. It doesn't constitute bad management,” said businesses development and marketing executive at PUTCO, Matlakala Motloung.
She said between March and June the company lost about R150-million in revenue. The bus operator said it is hoping for a financial relief it is currently only receiving half the subsidy from government.
“We are receiving subsidy, but we are not receiving the complete subsidy because of a clause called force majeure [unforeseeable circumstances that make it impossible for someone to fulfil a contract agreement] that in case of a natural disaster we only get paid 60% of the standing kilometers.”
The four unions said they are still weighing their options, though they're adamant that a court challenge or a strike is on the cards.