Pick n Pay has launched a Section 189 process to overhaul employee conditions for 22 000 store workers.

• Pick n Pay has launched a Section 189 process, proposing various changes to employment conditions including cuts to Sunday pay and new rosters requiring full-time staff to work weekends.
• CEO Sean Summers contends that the group’s employment conditions are “significantly more generous” than competitors.
  
• He warns that the company’s future is at risk without these changes.
• For more financial news, visit News24 Business.

Pick n Pay has launched a Section 189 process to overhaul employee conditions for 22 000 store workers.

The loss-making group wants to cut costs by reducing Sunday pay and implementing new rosters requiring more full-time staff to work weekends.

CEO Sean Summers says 12 years of concessions have left Pick n Pay stores overstaffed weekdays while relying on part-timers evenings and weekends when stores are busiest.

This has left employment conditions “completely out of sync” with the industry and “significantly more generous” than competitors, Summers told News24.

Pick n Pay store workers earn double pay for Sundays. Other retailers offer only 1.5 times normal rates, he said.

“My staff will [also] now be required to work on a roster basis. Some of them will now be required to work on Saturdays and Sundays. But that’s retail - if you’re in retail, you’re a little bit naive to believe that you can never work on a Saturday and Sunday.”

More permanent workers on weekends will presumably reduce reliance on variable-time employees, who typically work up to 130 hours monthly. Minimum guaranteed hours will be reviewed.

Summers said the group had a “massive cost imbalance” for labour, warning:

Pick n Pay shares crashed in February after it warned its annual loss would rise more than 20%, with analysts now doubting that its target of South African stores breaking even by 2028 is achievable.

READ | Pick n Pay crashes as Black Friday pain casts doubt on turnaround hopes

The group has been in existential crisis for years after strategic missteps, including a bungled plan to split the core brand in two, while Shoprite aggressively captured market share.

Summers, who was CEO until 2007, returned in late 2023 to turn the group around. Pick n Pay has cut debt, frozen support staff salaries for two years, and closed dozens of under-performing stores, involving retrenchments.

READ | ‘We won’t be the biggest again’ — and that’s fine, says Pick n Pay CEO

While Section 189 processes typically involve job losses, Summers said more retrenchments would hopefully be avoided as the focus was on restructuring conditions.

A three-year wage agreement with the South African Commercial, Catering and Allied Workers Union (Saccawu) expires in March next year. Summers said some agreed terms would be affected and that the group could not wait until then. Negotiations on the new employment conditions have started with Saccawu.

Pick n Pay shares lost almost 5% in opening trading on Monday, and are now down almost a third over the past year.