It is open war between the trade unions and Absa, South Africa’s largest retail lender. In the latest twist to a long-simmering feud, the union Solidarity is seeking an urgent injunction from the Labour Court to block mass lay-offs at Absa. The union accuses the bank of refusing to consult in violation of section 189 of the Labour Relations Act as it has “indicated in writing that it will not consult with Solidarity over the retrenchments”.

The paradox is that Absa, which is majority-owned by Barclays, denies even having the intention of laying off employees. Restructuring and retrenchments are two different things, tha bank insists, and the second does not necessarily follow from the first. “We have no mass retrenchment programme in place,” Louis von Zeuner, Absa deputy chief executive, said. “We continue to focus on programmes that enhance efficiencies and effectiveness by reducing duplication. We have given our people the assurance that we will manage these programmes in a responsible manner and aim to minimise the impact on people.”

The real issue seems to be relocation: many Absa employees who are also Solidarity members were recently told they would have to move from Pretoria to Johannesburg as the bank tries to centralise some functions. The unions, despite the bank’s denials, fear this restructuring will in practice lead to lay-offs. In June Sasbo, another union, had taken Absa to court arguing that relocations amounted to retrenchments, but lost the case.

Absa is feeling relaxed, having reported a better than expected 19% rise in first-half profits and a decline in its cost-to-income ratio. The bank has just announced an expansion into Zambia and Kenya as well as the acquisition of Takafol SA, the only company that provides Islamic insurance in South Africa, to strengthen its Islamic banking franchise further. The integration with Barclays Africa, which is moving all its staff from Dubai to Johannesburg by the end of the year, is proceeding apace.

The unions, on the other hand, are worried by a worsening situation in South Africa and know they have a fight on their hands. This week recruitment firm Adcorp released its employment index for August, showing an annual decline of 2.1% or almost 50,000 jobs lost, blaming restrictive labour legislation and militant unions. Cosatu, the confederation of trade unions, blasted Adcorp for “ideological warfare against organised workers as part of a political agenda to bash unions under the pretext of maximising opportunities for business to create jobs.”

Official figures show the unemployment rate has risen to 27.5% and the public sector now accounts for virtually all the job creation in the economy in 2011. “The outlook is certainly clouded,” says Johan Botha, senior economist at Standard Bank. “We are entering an extended period of relative weakness reflected by employment numbers.” In the private sector, however, financial services is the positive exception, as it has created 73,000 jobs in the last quarter.