Today's Labour News

newsThis news aggregator site highlights South African labour news from a wide range of internet and print sources. Each posting has a synopsis of the source article, together with a link or reference to the original. Postings cover the range of labour related matters from industrial relations to generalist human resources.

news shutterstockIn our roundup of weekend news, see
summaries of our selection of South African
labour-related stories that appeared since
Friday, 7 February 2020.


TOP STORY - SAA BUSINESS RESCUE

SAA to cancel all domestic flights, except for Cape Town, while retrenchments confirmed as unavoidable

BusinessLive reports that South African Airways (SAA) will cancel all domestic flights, except for a reduced service to Cape Town, as well as some international and regional flights, at the end of February in a bid to further cut costs at the ailing airline.  Joint SAA business rescue practitioners (BRPs), Les Matuson and Siviwe Dongwana, said routes that would drive the restructured national carrier towards profitability had been retained.  This is the third time the airline has announced the cancellation of flights since being placed under business rescue in December, and comes after the practitioners told employees that they intended to expedite retrenchments at the airline.  As to the job losses, the BRPs said every effort was being taken to limit the impact.  “It is our intention to restructure the business in a manner that can retain as many jobs as possible.  This will help provide a platform to a viable and sustainable future.  However, a reduction in the number of employees will, unfortunately, be necessary.”  The two said that to improve the airline’s liquidity, rationalisation programmes were under consideration for SAA’s subsidiaries, as well as the sale of selected assets.  The BRPs said they would continue to explore viable investment opportunities with potential investors in respect of SAA.

Read the full original of the report in the above regard by Genevieve Quintal at BusinessLive

Government calls for review of SAA route cuts

Reuters reports that President Cyril Ramaphosa said on Friday that his government did not agree with plans to cut some of struggling South African Airways’ (SAA) domestic routes, plunging rescue efforts for the cash-strapped carrier into uncertainty.  The state-owned SAA entered business rescue protection in December and is fighting for its survival.  Specialists appointed to try to rescue SAA said on Thursday that SAA would cease flights to Durban, East London and Port Elizabeth from 29 February, as well as cutting some international routes, as part of efforts to conserve cash and make the airline more attractive to potential equity partners.  SAA flights to Cape Town will continue on a reduced basis.  But, the public enterprises ministry, which oversees SAA, said it wanted the route changes reviewed.  “Government will be making representations to the Business Rescue Practitioners in order to balance the necessity for trimming unprofitable routes with the need to ensure the future sustainability of both the airline and South Africa’s aviation industry,” the ministry indicated in a statement.  SAA hasn’t made a profit since 2011 and has received more than R20 billion in bailouts over the last three years.

Read the full original of the report in the above regard by Alexander Winning at Moneyweb. Read too, SAA business rescue team defends plan to cut airline’s routes, at Moneyweb

Business rescue plans for SAA in jeopardy, with unions furious about route cuts and demanding removal of rescue practitioners

City Press reports that the business rescue process currently under way for South African Airways (SAA) has been plunged into crisis, after pandemonium erupted during a meeting between the airline’s business rescue practitioners (BRPs) and labour representatives on Thursday.  At the meeting, unions learnt that the rescue practitioners had already announced in a press statement that various flights would be cancelled – even before the business rescue plan was released.  Irvin Jim of the National Union of Metalworkers of SA (Numsa) apparently walked out of the meeting.  The breakdown is said to be so significant that one of the unions is considering taking legal action to have the practitioners, Les Matuson and Siviwe Dongwana, removed.  The breakdown between the BRPs and the workers’ committee started early in the week, when Matuson and Dongwana wanted support for an accelerated section 189 process, without providing any detail.  This would have meant that representatives of SAA personnel would have had to agree to lay off about 1,000 of their members, without knowing who would be affected and what the rationale for the move was.  According to Derek Mans, trade union Solidarity’s representative for the aviation industry, it sounded as if the layoffs were a condition set by financiers wary of advancing more money to keep SAA in the air.  The workers’ committee refused and adjourned to discuss the matter.  Shortly after the start of Thursday’s meeting, the workers’ committee learnt that the BRPs had just released a press statement about the cancellation of almost all of SAA’s domestic routes, along with five regional routes and five international ones.  Committee members then received phone calls from SAA personnel across the world, wanting to know what would become of their jobs.  Mans said the cancellation of the routes was not part of the business rescue plan; it was only aimed at protecting the money in SAA’s coffers.  Solidarity was consulting with its legal team on Friday, after Numsa asked for support to bring an urgent court application requesting the removal of Matuson and Dongwana.

Read the full original of the report in the above regard by Antoinette Slabbert at City Press. Read too, Unions slam SAA route cancellations, warn of 'devastating' impact on jobs, at Engineering News

Other related internet posting(s) in this news category

  • Regional airline SA Express objects to business rescue ruling by court, at Engineering News


PENSION FUND BAILOUT FOR ESKOM

Can the Government Employees Pension Fund survive a R254bn knock to bail Eskom out?

Barbara Curson considers the financial impact of the proposal to divert R254 billion from the Government Employees Pension Fund (GEPF) to Eskom.  She notes that the Public Investment Corporation (PIC) manages 83% of GEPF assets in the form of equity, bonds, money market instruments, and property portfolios.  The remaining 17% is managed by 32 asset managers appointed by the GEPF.  But, the relationship between the PIC and the GEPF is opaque, with the PIC taking the lead in making investment decisions.  Unfortunately, no one has any idea of the current value of the fund because neither the PIC nor the GEPF provide interim financial statements.  The most recent actuarial valuation of the GEPF as at March 2018 indicated declining short and long term funding.  The minimum short-term funding level was only 18.3% above the target of 90%, and the minimum long-term funding level was 24.5% below the target of 100%.  As at 31 March 2019, the GEPF had already invested R85 billion in Eskom.  In Curson’s view, injecting R254 billion into Eskom would be neither a loan nor an investment – it would be an unwarranted gift granted through gritted teeth.  As Eskom is clearly insolvent, it will be unable to pay interest, nor make loan repayments.  Further, the GEPF/PIC will receive no rights – no right to appoint directors, no say in business decisions.  In Curson’s view, the R254 billion cash injection into Eskom cannot be classified as an investment, and would immediately deplete the assets in the fund to the extent of a massive 14.1% haircut.  As at March 2019, the GEPF had R29 billion “cash and cash equivalents”, so it will thus have to sell some good assets to provide the cash.  Moreover, a rough non-actuarial calculation indicates that the R254 billion haircut will cause the fund’s long-term funding level to drop to 64.9% (minimum funding level target level is 100%), while the short-term funding level will only be 1.6% above the minimum 90% level.

Read the full original of the above article by Barbara Curson at Moneyweb

Other internet posting(s) in this news category

  • PIC would invest only in ‘credible’ business case for Eskom that has returns for its clients, at BusinessLive
  • All workers are equal, but Cosatu’s bailout plan suggests Eskom workers are more equal than others, at Moneyweb
  • Analysis: Cosatu’s social compact can work if it is not backward looking on Eskom, at BusinessLive


OCCUPATIONAL HEALTH & SAFETY

Cash-in-transit industry to launch association to counter violent attacks on trucks and guards

BusinessLive reports that the cash-in-transit (CIT) industry is to launch an association that will co-ordinate efforts to counter the “unacceptably high” levels of violent attacks.  “We expect greater co-ordination will lead to standardisation in the training of personnel, better collaboration in sharing information relating to attacks and the methods used by crime syndicates, and faster co-ordination in response to attacks on vehicles across companies,” SBV CEO Mark Barrett indicated.  This could also possibly lead to standardisation of “cross pavement” values, with the riskiest leg of the movement of cash relating to the value or amount of money personnel carry on foot from the vehicle to the client’s place of business.  According to SBV, 44% of all CIT attacks occur in this leg.  While lower values are more advantageous from a loss perspective, it means more trips must be undertaken by personnel and that means vehicles remaining stationary for longer — which increases risk.  SBV will be one of three founding members of the association alongside the industry’s two other largest companies, Fidelity and G4S.  The number of attacks on CIT vehicles and personnel have been on a downward trend since October and November 2017 when more than 30 attacks were carried out.  Explosives were also used for the first time to blast open vehicles, leading to more brazen attacks.  The CIT sector is thought to employ about 7,000 people.

Read the full original of the report in the above regard by Warren Thompson at BusinessLive


INDUSTRIAL ACTION / STRIKES

No-ballot Metrobus strike costs municipal union Demawusa its registration

Sowetan reports that the Democratic Municipal and Allied Workers’ Union (Demawusa) has become the first labour organisation to have its registration cancelled for going on strike after failing to comply with the controversial new law that a secret ballot must be conducted.  The union organised a Metrobus strike in Johannesburg in October and did not provide proof to the registrar of labour unions that members had voted for the strike.  According to the new legislation, every trade union must hold a secret ballot canvassing its members before a strike.  Failure to comply with the legislation could lead to punitive measures such as deregistration, cancellation of registration and placing the guilty party into administration.  The registrar recently notified the union as follows:  “The registration of the trade union is cancelled due to the following reasons: the trade union failed to comply with sections 99 and 100 of the Labour Relations Act; and the union failed to comply with guidelines for balloting regarding members having a secret ballot before embarking on a strike action.”  Demawusa president Sello Selepe accused the registrar of being harsh and unfair, saying they would challenge the matter at the labour court.  He said the union received a letter from the registrar in October stating that Demawusa had 60 days to prove that the bus strike in Johannesburg was legal and that a secret ballot vote had been held among members to approve the bus strike.  He explained:  “On December 4, we went to the registrar, who was also demanding that we should submit audited financial statements in addition to the ballot boxes.  We told the registrar … we were in the process to audit our latest financial statement.  We then requested an extension of the deadline to April.”  Selepe said the deregistration came as a shock because there were other unions which have been involved in wildcat strikes but their registrations have not been cancelled.

Read the full original of the report in the above regard by Mpho Sibanyoni on page 11 of Sowetan of 7 February 2020

Pikitup services disrupted on Friday due to protest by EPWP employees over delayed payments

Engineering News reports that Johannesburg municipal waste manager Pikitup’s services were disrupted on Friday owing to protest action by Expanded Public Works Programme (EPWP) employees, over a payment dispute.  The EPWP employees were contracted by Pikitup to assist in clearing the waste backlogs that accumulated over the festive season.  The employees apparently closed down depot gates, preventing trucks and other employees from leaving the depots.  They were demanding to be paid their stipends immediately for their services.  Pikitup explained that the reason for the nonpayment of the stipends resulted from EPWP employees not submitting all the required documentation to allow for the facilitation of payment on time.  The required documents were reportedly submitted only after the payroll closure.  While the waste manager made a special arrangement with the City’s finance department to make payments on Friday, owing to it being a special payment arrangement, the money was not immediately reflected in the employees’ bank accounts.

Read the original of the above report at Engineering News


MARCHES

Municipal union Samwu marches to demand that Tshwane City urgently gets its house in order

Saturday Citizen reports that Tshwane municipal workers have given Tshwane City until month-end to get its house in order and put an end to the “constant collapse” of council meetings.  Thousands of SA Municipal Workers’ Union (Samwu) members brought the city to a standstill on Friday as they marched to Tshwane House to lodge their grievances.  The group sang for Tshwane Mayor Stevens Mokgalapa and governance and support officer Lorette Tredoux to be ousted.  The workers said that under the Democratic Alliance the city had collapsed and there had not been sufficient service delivery.  They also expressed frustration at the recent stagnation in council meetings.  Samwu regional secretary Mpho Tladinyane said:  “We have had three mayors and four acting city managers over the last 40 months.  This creates instability in the administration and service delivery is affected.  Furthermore, there is political interference in the administration and, as the mayor rightfully said, the administration was politicised.”  He indicated that Tshwane had until the end of February to ensure politicians stopped interfering with the city’s administration and added:  “If this is not resolved by end of the month, we will then take over.  This is our municipality and our workplace.”  ANC leaders joined the march in solidarity, but Tladinyane scolded them for participating in the collapse of the council.  Other union demands included the reinstatement of staff who have been suspended for more than two years, the insourcing of services, adequate security at municipal buildings and for danger allowances for staff working in harmful environments.

Read the full original of the report in the above regard by Rorisang Kgosana on page 6 of Saturday Citizen of 8 February 2020


MINING LABOUR

Mediator appointed by KZN government to save Richards Bay Minerals' mining deal

The Star reports that in an effort to save the multi-billion investment by Richards Bay Minerals (RBM), the KwaZulu-Natal (KZN) provincial government has appointed an independent mediator to resolve the community dispute threatening the mining giant.  The mediator is Ngidi and Company of Pietermaritzburg, which is run by lawyer Comfort Ngidi, a known supporter of former president Jacob Zuma.  The cause of the violence that has forced the company to temporarily halt operations is a 15-year long chieftaincy dispute within the ruling Mbuyazi clan.  The clan has been without an Inkosi for over a decade and that has led to squabbles over who should be installed as a traditional ruler.  That squabble was further fuelled when in May 2018, RBM released R79 million to the clan’s development fund.  It is alleged within the clan that those who believe they have been excluded are behind the violence that has claimed lives of two people since December.  Addressing the media in Richards Bay on Thursday after meeting with all the warring sides from the Mbuyazi clan, which owns the traditional land mined by RBM, KZN Premier Sihle Zikalala indicated:  “The mediator is the provincial government and it has assigned Ngidi and Company to be there on (a) daily basis, but the spokesperson and anyone who has the right to speak on the matter is the provincial government, Gogta and the Premier’s office.

Read the full original of the report in the above regard by Sihle Mavuso at Independent News

Other labour / community posting(s) relating to mining

  • Bodies of Lily Mine miners still underground four years later, on page 6 of The Sunday Independent of 9 February 2020


VACANCIES / RECRUITMENT

SA’s great CEO exodus last year saw 10% of JSE listed companies undergoing changes at the top

Bruce Whitfield writes that last year there was an almost unprecedented changing of the guard at the top of high-profile SA companies.  Nearly 50 CEOs of publicly listed, state-owned and public interest companies left their jobs over the past 14 months.  It was, in short, a talent rout, as business confidence slumped to its worst levels since PW Botha’s Rubicon speech of 1985.  About 10% of the JSE’s 360 listed companies underwent change at the top.  Some were nudged, some were pushed and others ran screaming.  At least one resisted every effort to leave the corner office quietly, refusing to conform with the unwritten code of CEOs everywhere — know when your time is up.  There were breakdowns, meltdowns, a couple of retirements, some went "to spend more time with their families", and there was a worrying exodus due to emigration.  While some boards chose to use the opportunity to bring in CEOs with a "new broom" mandate to clean up the mess left by their predecessors, not all have chosen to use the economic downturn to properly re-engineer the firms in their care.  Whitfield goes on to examine the CEO departures and replacement strategies at Tiger Brands, Massmart, EOH, Steinhoff, Altron, Eskom, Tongaat Hulett, Sasol, Old Mutual, Walmart and Woolworths.  He concludes that contrasting strategies have been adopted by SA’s largest companies to replace CEOs rushing for the door.  He notes that in five years’ time, we’ll know which plan worked.

Read more of Whitfield’s article at SA Labour News

Other internet posting(s) in this news category


RETRENCHMENTS / COMPANY JOB CUTS

Hundreds more jobs on the line at ArcelorMittal SA

BusinessLive reports that Arcelor Mittal SA (Amsa), which has already cut 1,000 jobs, plans to shed hundreds more as it battles low steel demand and rising costs.  Africa’s largest steelmaker could retrench 400 employees from its Newcastle operations in KwaZulu-Natal, CEO Kobus Verster said on Thursday.  Amsa has been struggling with weak demand and rising electricity, rail and port prices.  In 2019, it announced a review of its assets to cut the costs.  This led to the winding down of the Saldanha operations in the Western Cape, which will be completed by the end of the first quarter of 2020.  On 24 January, the company, after its annual revenue fell 9% to R41.35bn due to lower sales volumes, commenced with section 189 consultations that might result in the retrenchment of 400 employees at its Newcastle plant.  But, speaking after the release of results for the year ended 31 December, Verster said the company had decided not to close the Newcastle plant.  “When we looked at the closure of Newcastle, we came to the conclusion that the impact of that would be substantial on the domestic market.  Financially, you could say — shut it down.  But there is still a cost problem,” he commented.  Verster confirmed that primary steelmaking operations at the Newcastle plant would continue, with output from the plant to service the domestic and Africa markets.  “The cost base of the business does not really justify exports (to overseas markets) in these market conditions. We are far from most export markets and our focus is mainly East Africa. So we are not focusing on exports,” Verster said.

Read the full original of the report in the above regard by Siseko Njobeni at BusinessLive. Read too, ArcelorMittal SA does U-turn for ‘social’ reasons on closure of Newcastle operations, at Moneyweb

As Denel exits aircraft components business, steps in place to minimise impact on job losses

BusinessLive reports that state-owned arms manufacturer Denel says the process of exiting the greater part of its aircraft components manufacturing business is now at an advanced stage, with major steps put in place to minimise the impact of the withdrawal on job losses.  The loss-making company recently entered into a mutual agreement with its customers to transfer the manufacturing of aircraft parts to alternative suppliers as the business is no longer sustainable.  The divisional CEO of Denel Aeronautics, Mike Kgobe, said the company had concluded consultations with stakeholders, including organised labour and representatives of non-unionised employees as required by the Labour Relations Act.  The consultation process was facilitated by a senior official of the CCMA and would result in retrenchments based on operational requirements.  “We have really worked hard in trying to keep job losses to a minimum and some of the employees will be transferred to other positions within the Denel group while voluntary severance packages have been offered,” said Kgobe.  Denel group CEO Danie du Toit said the decision to wind up the division was in line with the broader long-term strategy to reposition the company and return it to profitability.  He indicated that the winding up of the aircraft components manufacturing business would not affect other businesses conducted by Denel Aeronautics at the Kempton Park campus.

Read the full original of the report in the above regard by Bekezela Phakathi at BusinessLive

 


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