The unavoidable retrenchment of 1 899 employees at Daybreak Foods has reached completion, a move the company blames on financial compliance failures and the rejection of state relief, while a union slams the morally reprehensible loss of livelihoods.
The poultry producer confirmed that termination notices were finalised on Friday, 20 March 2026. This follows the adoption of a lean reactivation option within the company’s business rescue plan, leaving only 421 employees on the payroll.
According to Daybreak Foods spokesperson Miyelani Shikwamba, the retrenchments were necessitated by the rejection of the company’s Temporary Employer-Employee Relief Scheme (TERS) application.
Compliance failures trigger job bloodbath
The rejection stems from historic failures to produce audited financial statements for the year ending 2025.
Shikwamba said, “As a result, the company had no alternative but to initiate and conclude a retrenchment process to align operations with the lean reactivation option outlined in the adopted business rescue plan.”
Even though the outlook remains bleak for the majority, the company noted that the planned reactivation of one of its abattoirs could enable the re-employment of several hundred affected workers in the future.
While R150 million in funding was previously secured from the Public Investment Corporation (PIC) for the emergency phase of the business rescue, recent capital has been earmarked for capital expenditure, flock replenishment, and infrastructure repairs rather than employee payouts.
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“This funding will not be allocated to retrenchment or severance payments, which will be detailed in a further business rescue plan to be published in due course,” Shikwamba explained.
This lack of immediate allocation for severance packages has caused significant distress within the workforce. A Daybreak employee, who spoke on condition of anonymity to protect their livelihood, noted that workers are uncertain about their future.
“We are not sure about that, but they have to; the big issue is that they don’t have money for severance packaging. It’s so sad to hear such news while a lot of employees are dying from stress,” the employee said.
Union slams Daybreak collapse and retrenchments
Dominique Martin, communications officer for the Food and Allied Workers Union (Fawu), stated that the union is appalled at the state’s failure to prevent the collapse of the company. Martin added that despite the huge amounts of public funds spent trying to save the company, the company also neglected to inform the unions about impending retrenchments, thereby not allowing opportunities for viable alternatives to be discussed.
“It is morally reprehensible for the company to blame the rejection of TERS applications for job losses when they know very well that their own failures in terms of compliance issues and the lack of consultation with unions to consider viable alternatives are the root cause of these retrenchments.
“The impending closure of Daybreak will also have a snowball effect on the futures of the wider impoverished rural communities who are already dealing with high unemployment figures,” Martin said.
He explained that the Daybreak failure will also have an extensive effect on the poultry sector as a whole in terms of local supply, consumption and production in Limpopo and Mpumalanga.
“The industry, as a formidable employer in domestic agriculture, has already been hammered by cheap imports and closures in other parts of the country and will inadvertently hinder the goals set out in the Poultry Master Plan,” Martin said.
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