South Africa's unemployment could increase to around 25% in the first quarter of 2009, trade union Solidarity said on Monday.

The union stated that 32 companies were already retrenching 22 000 employees, and that this number could rise significantly.

Solidarity warned that the number could be much higher because it could not be sufficiently determined how many contract workers were in danger of losing their jobs. The largest group of contract workers, about 11 695, were employed in the mining industry, while a further 6 100 were employed in the vehicle manufacturing industry.

Unemployment had risen from 23,1% to 23,2% in the third quarter of 2008, and the trade union expected it to rise to between 23,3% and 24% in the fourth quarter of 2008.

"The crisis is here and will only grow. We are concerned about the lack of leadership during the crisis. Solidarity is drafting a concept emergency plan for government. We are basing our plan on principles from the Disaster Management Act," said Solidarity DG Dirk Hermann.

He added that the union hoped to send the concept plan to South African President Kgalema Motlanthe during this week. "We suggest that such an emergency plan be developed further at a crisis summit, chaired by President Motlanthe."

Hermann added that Solidarity was calling on industries to regard retrenchments only as a crisis measure. "A company might be cutting 20% of costs, but 100% of the employee's income is cut. We see companies retrenching people while still showing profits. Letting someone go during a labour recession is devastating."

Solidarity stated that the cause of retrenchments was a mixture of local and international reasons. Factors such as the electricity crisis, the skills crisis, the HIV/Aids pandemic, crime, and the deterioration of infrastructure had placed the economy under pressure. International negative factors included the worldwide financial crisis, limited access to financing, the reduction in the demand for, and price of commodities, and the increased input costs.

"We expect commodity prices will start rising again in 2009. Companies must be careful not to cut costs to such an extent that they do not have the ability to make the most of the benefits of the upswing phase, lying ahead," Hermann said.

Companies hardest hit by the retrenchments included steel producer ArcelorMittal, gold producer DRD Gold, platinum-miner Lonmin, uranium company Uranium One, and financial service provider Absa.