2014/15 Annual Report

Annual Report 2014/15
45
11.2.4. Contribution to employment
The Commission imposed remedies to address employment concerns in 32 merger
cases. The total number of jobs saved, including those where the Commission did
not impose a condition, amounted to 5 340. Of this amount, firms committed to
save 3 410 existing jobs as a result of the Commission’s intervention by imposing
employment-related conditions, while 1 930 jobs were saved directly through the
merger. The mergers reviewed during this period resulted in a loss of 2 594 jobs.
The net effect of job losses and jobs saved was the saving of 2 746 jobs, in the
work of the Commission, where jobs are generally lost
Table 10: Comparison of merger decisions’ impact on employment
2013/14 and 2014/15
2013/14 2014/15
Total number of jobs saved 2 231 5 340
Total number of jobs lost 574 2 594
Net effect + 1 657 + 2 746
More jobs were saved in the 2014/2015 financial year compared to the
previous year. The table below shows the comparison of the impact of merger
and acquisition activity on employment between 2013/14 and 2014/15.
Case Study 13: Employment considerations in mergers in the furniture industry
There were three (3) mergers in the furniture retail market that had an impact on employment. These transactions arose due to the Ellerines business being
placed under business rescue in terms of the Companies Act. In summary, at the time of the filing of these mergers, 2 810 employees out of a total of 7 060
employees at Ellerines were to be retrenched as a result of the restructuring plan. The decision on the three (3) mergers resulted in the total saving of 892
jobs, as below.
Coricraft and Dial-a-Bed
In the merger involving Coricraft Group (Pty) Ltd and the Dial-A-Bed Business of Ellerine Furnishers (Pty) Ltd, the Commission found that 191 employees were
employed at Dial-bed and would lose their jobs should the merger not proceed. Further, 23 of these employees were found to be employed in stores that
had been identified by Ellerines as non-viable stores. While Dial-a-Bed itself was not underperforming, the possible liquidation of Ellerines would result in
the retrenchment of the entire workforce of Ellerines, including the 191 employees employed at the Dial-a-Bed stores. Considering these circumstances, the
Commission imposed conditions to ensure the affected employees remained employed.
Lewis Stores and the Beares Business of Ellerines
In the merger between Lewis Stores (Pty) Ltd and Ellerine Furnishers (Pty) Ltd, trading as Beares, the Commission found that the merger would save at least
393 jobs and create a further 126 new employment positions at the Beares stores acquired. The Commission recommended conditions to the Tribunal to
ensure that the jobs would be saved and created as specified above.
Shoprite and Ellerines
In the merger involving Shoprite Checkers (Pty) Ltd and Ellerine Furnishers (Pty) Ltd in Business Rescue and as represented by the Business Rescue Partners,
in respect of the Assignment of Certain Leases and the Employment of Employees of Final Selected Stores of Ellerine Furnishers (Pty) Ltd, the Commission
found that the merger would save 1 241 jobs. However, 933 employees had already accepted voluntary separation arrangements and 308 employees
remained. The transfer of all employees was dependent on the transfer of the lease agreements of 217 stores. The Commission therefore recommended
conditions to the Tribunal that would ensure that the 308 jobs would be saved.