Netcare Business day
PRIVATE hospital group Netcare’s plans to outsource its Medicross pharmacies and its hospital retail outlets to health and beauty retailer Clicks have drawn the ire of independent pharmacists and union Hospersa.
The Independent Community Pharmacy Association said the development threatened small businesses, while Hospersa said Netcare had failed to consult employees about its plans to transfer them to Clicks.
“Hospersa is truly astounded by this,” said its general secretary Noel Desfontaines. “In terms of the Labour Relations Act, employers have to consult with employees when considering transfers, and here we see Netcare announcing it in a newsletter. It is unheard of.
“It seems to us that the company is sailing very close to the wind when it comes to the law and fair processes, and we will be ready to defend our members’ rights whenever needed,” Desfontaines said.
Hospersa was also unhappy about Netcare’s broader restructuring plans, and voiced its concerns to the company last week, Desfontaines said.
JSE-listed Netcare is one of the three big private hospital groups in SA, rivalled by Life Healthcare and Mediclinic International. In SA, it operates primary healthcare and dental services at its Medicross clinics, emergency services and hospitals.
Clicks will take over all 37 Medicross pharmacies and the shops in 51 Netcare hospitals. But Netcare will continue to run its own hospital pharmacies.
“We believe the outsourcing relationship with an experienced retail provider of the calibre of Clicks will enable us to provide an enhanced retail offering to patients, staff, and consumers,” Netcare CEO Richard Friedland said on Wednesday. The details of the deal were not disclosed, but it is understood that Clicks will pay Netcare a proportion of the turnover in the pharmacies and shops it runs in Netcare’s facilities.
The transaction would have no material effect on the earnings of either company, they said in a joint statement.
Clicks CEO David Kneale said the agreement would extend Clicks’s retail pharmacy presence. The company would rebrand the Medicross pharmacies and Netcare front shops to Clicks.
Affected Netcare and Medicross staff would be transferred to Clicks on similar conditions of employment, and no jobs would be lost as a result of the transaction, Friedland said.
The deal, due to be implemented on October 1, has further angered independent pharmacists uneasy about the growth of large retail pharmacy chains, such as Clicks and Dis-Chem.
Independent Community Pharmacy Association chairman Mogologolo Phasha said the deal was “just another example of the extent to which corporatisation is taking hold”, and would reduce customer choice.
“This collaboration between big business allows for oligopoly to more readily develop, and destroys the government’s vision and promotion of (small and medium-sized enterprises). Joint ventures between big business(es) infiltrating a specific location are a threat to the stability of other healthcare providers, which have served their communities over time,” he said.
Netcare also faces resistance from unions over its plans to centralise its credit-control division. Two weeks ago, Solidarity said it would join other unions — the Democratic Nursing Organisation of SA, Hospersa, and the National Education, Health and Allied Workers Union — in opposing the move. It said at the time that it was concerned that the restructuring of the credit-control division would spill over to other divisions.
Johan Botha, the deputy general secretary for the professional industry at Solidarity, said on May 23 that Netcare had cited the economic climate, among other things, as a reason for the restructuring. “The company indicated that it wanted to review its administrative and support staff structure in order to eliminate the duplication of functions. This includes … the possibility to outsource noncore functions,” he said.