Broke and Broken: Daybreak Foods Faces Collapse as Workers Demand Answers and UIF Access

On Thursday, 8 May, a crowd of desperate workers gathered outside Daybreak Foods’ Delmas plant, driven by months of unpaid wages and mounting uncertainty. Their protest was sparked by news that an inspector from the Department of Employment and Labour was visiting the facility. With production halted and salaries frozen, the company’s employees are demanding immediate access to Unemployment Insurance Fund (UIF) documents and clarity on their future.

Daybreak Foods — a major poultry producer near Delmas, Mpumalanga, slaughtering over a million birds weekly — is now teetering on the edge of collapse. Workers, unpaid for months, say they’re left with no income, no access to UIF, and no communication from management.

“The inspector arrived, but there’s a language barrier. He hasn’t addressed our concerns. All he talks about is saving the business,” a whistle-blowing employee told Daily Maverick.

Workers’ Demands: Legal Rights, Not Favors

The workers handed over a memorandum of demands to the Department of Labour, calling for:

• Immediate release of provident and UIF documents.

• Disclosure of payment histories and compensation for missed contributions.

• Interim financial support while business rescue is being considered.

• Accountability for possible fund mismanagement.

At the heart of the crisis is the lack of compliance with labour laws. According to workers and legal experts:

• The Pension Funds Act entitles them to access contributions in cases of financial hardship.

• The UIF Act mandates employers to issue UI-19 and UI-2.7 forms for reduced working hours.

• The Companies Act prioritises employee claims in business rescue proceedings.

• The Basic Conditions of Employment Act requires timely wage payments.

In a letter obtained by Daily Maverick, the Department of Labour confirmed that it would assist workers in claiming UIF benefits under the reduced working hours provision. The department also warned that Daybreak could face compliance orders and legal action if it continued to block the release of employee forms.

From Frozen to Floundering: Daybreak’s Fall

The operational collapse began with the resignation of CEO Richard Manzini and several top managers in March 2025. Their exit triggered a domino effect: feed deliveries were cut off, contracts with suppliers and growers crumbled, and production ground to a halt. Workers were stranded — some unable to feed their own families — while over a million chickens a week faced uncertain outcomes.

Daybreak’s troubles were compounded by:

• Rising animal feed costs,

• Outbreaks of avian influenza, and

• A failure to secure timely funding from the Public Investment Corporation (PIC).

Efforts to modernise the business — shifting from frozen to fresh poultry in line with consumer trends — faltered under these pressures.

The PIC’s Role and a Missed Bailout

According to analyst Anthony Clark of SmallTalkDaily Research, Daybreak’s struggles were no surprise. As early as November 2024, the company had requested a R250-million bailout from the PIC. But with trust in Daybreak’s governance eroding, the funding was delayed.

By late 2024:

• The company defaulted on a R100-million emergency loan.

• It failed to repay R42-million owed to its largest grower.

• A court case threatened liquidation.

Retailers even stepped in over the festive season, allegedly extending R100-million in credit to keep the product flowing. But Daybreak was reportedly selling poultry below production cost just to maintain cash flow.

Business Rescue: Too Late?

In a recent statement, Daybreak’s board acknowledged the “significant financial constraints” it faces and said it was exploring options for business rescue. It also said it was waiting on a response from the PIC for funding to pay salaries — a move some workers now see as too little, too late.

The PIC itself has confirmed it is working urgently with stakeholders, but insists that any intervention must address long-standing governance issues.

The Waiting Game

For now, workers are left in limbo. With no production, no pay, and no clear roadmap, the company is reportedly set to remain closed for up to six months. Meanwhile, potential buyers like Rainbow and Early Bird have allegedly had their offers rebuffed.

“We just want our UIF forms and to feed our families,” said one worker outside the shuttered facility. “We don’t know how much longer we can wait.”

The collapse of Daybreak Foods is more than a business failure — it’s a human crisis. As government steps in and business rescue talks loom, the livelihoods of hundreds of workers and the future of one of South Africa’s largest poultry producers hang in the balance.

{Source: Daily Maverick}

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