Workers at battery manufacturer First Battery downed tools on 6 July 2026 after the company issued termination letters to 165 employees across its Benoni, East London, Cape Town and Durban plants. The National Union of Metalworkers of South Africa (NUMSA) gave 48 hours’ strike notice before the walkout began, and the dispute has since become a flashpoint over how retrenchments — and the severance packages that go with them — should be handled.
What sparked the strike
According to reporting on the dispute, First Battery notified the 165 affected workers of retrenchment across its four plants, citing pressures the company has attributed to import competition and broader restructuring needs. NUMSA disputes the company’s account, arguing the retrenchments reflect poor management decisions rather than an unavoidable business necessity, and has criticised the severance offer on the table.
The company has reportedly offered around R10,000 in severance pay per affected worker. NUMSA has countered with a demand closer to R200,000 — a gap wide enough that it has become the central sticking point in the dispute, alongside the broader argument over whether the retrenchments were necessary at all.
How South African retrenchment law is supposed to work
Under the Labour Relations Act, an employer proposing retrenchments for operational reasons is required to follow a consultation process — often referred to by its legal reference, Section 189 (or Section 189A for larger-scale retrenchments) — before any terminations take effect. This process is meant to give the employer and affected employees, usually represented by a union, the opportunity to consult on ways to avoid the retrenchments, minimise the number of people affected, change the timing, and agree on a fair severance package.
The legal minimum for severance pay is one week’s pay for each completed year of service, though unions frequently negotiate for more, and larger or more profitable companies sometimes agree to enhanced packages under pressure from a union or to avoid prolonged industrial action.
First Battery has said months of consultation preceded the retrenchment notices, which — if accurate — would suggest the company followed at least the procedural requirements of the law, even if NUMSA disputes whether the underlying business case was genuine.
Why this dispute matters beyond one factory
The First Battery strike is a small-scale but concrete illustration of a pattern showing up in the national jobs data — see our coverage of South Africa’s formal job losses in early 2026 for the bigger picture. Manufacturing has been one of the sectors most exposed to import competition and cost pressure, and disputes like this one offer a window into how retrenchments actually play out on the ground: not as a single statistic, but as a negotiation between a union demanding a fair exit package and a company arguing it can’t afford one.
What workers should know about their rights
- Employees facing retrenchment are entitled to proper consultation before a final decision is made, not simply a termination letter.
- Severance pay is a legal minimum, not a ceiling — workers and unions can negotiate for more, particularly where a company’s financial position allows it.
- Retrenched workers can claim UIF unemployment benefits, which is separate from and in addition to any severance package received from the employer.
- Disputes over whether a retrenchment was procedurally or substantively unfair can be referred to the CCMA (Commission for Conciliation, Mediation and Arbitration) or, in unionised disputes like this one, contested through protected strike action once the legal requirements for a strike have been met.
What happens next
As of the strike’s start, the dispute remained unresolved, with NUMSA and First Battery still far apart on the severance figure. Disputes of this kind are typically resolved either through further negotiation, CCMA-facilitated conciliation, or — if deadlocked — protracted strike action that can extend for weeks. Newsdomain will update this story as the two sides report progress.
How this dispute could be resolved
Retrenchment disputes of this kind typically follow one of a small number of paths. The two sides can reach a negotiated settlement on severance terms, often somewhere between the company’s opening offer and the union’s initial demand. Alternatively, the dispute can be referred to the CCMA for conciliation, and if that fails, either to arbitration or — where a protected strike is already underway, as in this case — the parties may continue industrial action while negotiations proceed in parallel. In rare cases, disputes escalate to the Labour Court, particularly where a union argues the retrenchment process itself was not properly followed, rather than simply disputing the amount offered.
Because NUMSA and First Battery are reportedly far apart on the core severance figure, a negotiated middle ground looks more likely than either side’s opening position prevailing outright — that is typically how retrenchment severance disputes of this kind are ultimately settled in South African labour relations practice.
Why import competition is a recurring theme in manufacturing job losses
First Battery’s cited pressures echo a pattern seen across parts of South Africa’s manufacturing sector in recent years: rising competition from imported goods, often priced lower than locally manufactured equivalents, squeezing margins for domestic producers. Industry bodies have periodically called for tariff protection or import-control measures in response, while economists more sympathetic to open trade caution that protectionist measures can raise costs for downstream industries and consumers. This underlying tension — between protecting domestic manufacturing jobs and keeping input costs low for the wider economy — sits behind many individual retrenchment disputes like this one, even when it isn’t explicitly debated in the specific negotiation.
How this compares with other recent manufacturing disputes
The First Battery strike sits alongside other 2026 labour disputes in South Africa’s manufacturing sector, including a separate NUMSA dispute at vehicle manufacturer BAIC over wages, which required direct government intervention to bring the two sides to the table. Taken together, these disputes suggest a manufacturing sector under sustained cost and competitiveness pressure, where disagreements between unions and employers over how that pressure should be shared — through wage restraint, job losses, or company cost-cutting elsewhere — are surfacing more frequently than in a more stable period for the sector.
What a protracted strike could cost both sides
Extended strike action carries real costs for both workers and the company: striking workers forgo wages for the duration of the action, while the company loses production capacity and, potentially, customer confidence in its reliability as a supplier. These mutual costs are often what eventually pushes both sides toward a negotiated settlement, even when the opening positions — as with the wide gap between First Battery’s and NUMSA’s severance figures here — appear far apart at the outset of a dispute.
Frequently asked questions
Is a strike over retrenchment terms legal in South Africa?
Yes, provided the union has followed the procedural steps required under the Labour Relations Act, including issuing the required strike notice, which NUMSA said it did — giving 48 hours’ notice before the walkout began.
What is the legal minimum severance pay in South Africa?
The Basic Conditions of Employment Act sets the statutory minimum at one week’s remuneration for each completed year of continuous service, though this is a floor, not a cap.
Sources Used
- Independent on Saturday / Business Report — First Battery retrenchment coverage
- IndustriALL Global Union — First Battery strike reporting
