This 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.
In our Wednesday morning roundup, see
summaries of our selection of recent South African
labour-related reports.
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GDP shrunk by 0.7% in second quarter, leaving SA’s economy smaller than before Covid pandemic Bloomberg & Moneyweb report that SA’s economy is smaller than it was before the coronavirus pandemic struck, after the worst flooding in almost three decades and severe power outages caused it to shrink in the second quarter. Statistics SA reported on Tuesday that gross domestic product (GDP) contracted 0.7% in the three months to June, compared with growth of 1.7% in the previous quarter. The deterioration in economic performance in the second quarter was led by lower economic activity in the manufacturing, agricultural and mining and quarrying industries. The manufacturing industry declined by 5.9%, with eight of the ten manufacturing divisions reporting negative growth rates. The agricultural sector registered a 7.7% decrease, led by a decrease in economic activity for animal products. The mining and quarrying industry saw a 3.5% slump, on decreased production in gold, coal, manganese ore and diamonds. Meanwhile, SA’s economy remains stuck in its longest downward phase since World War II and hasn’t grown by more than 3% annually since 2012. Slow policy reforms, weak business sentiment and high levels of crime continue to weigh on fixed investment spending, with private companies wary of committing large sums of money to domestic projects. Consumer sentiment about future prospects is at its worst since the mid-1980s. Economic growth in the third and fourth quarters of the year won’t reach 1%, according to central bank forecasts. Read the full original of the report in the above regard at Moneyweb. Read too, Economists dial back full-year forecasts after GDP shrinks 0.7%, at BusinessLive (subscriber access only). And also, Despite painful hit, SA economy should avoid a recession, at Fin24 (subscriber access only) SA’s 0.7% GDP decline in second quarter points to possible job, wage cuts on horizon The Citizen reports that the latest gross domestic product (GDP) data is not good news for consumers, with the latest fall in real GDP meaning that the size of SA’s economy in the second quarter was smaller than what it was before the pandemic. Statistics from Statistics SA show that real GDP contracted by 0.7% in the second quarter compared to the first quarter, but was 0.2% higher than in the second quarter of last year. The data indicated that more than half of the economic industries have not yet recovered from the pandemic. Hayley Parry, Money Coach and facilitator for 1Life’s Truth About Money, commented: “A contracting economy means potential wage and job cuts on the horizon and with the likelihood of a further interest rate hike coming at the end of September, that means even less disposable income. Therefore, if you even still have a belt left, I am afraid that means more belt tightening ahead.” Parry noted that although household expenditure was up marginally (0.6%), consumers spent less on items such as alcohol, tobacco and clothing. Hopefully, however, the fuel price reduction on Wednesday and a slowing of food price inflation will provide households with a little breathing room “as they have clearly already cut consumption on discretionary expenditure”. Prof Jannie Rossouw of Wits Business School said the slump in GDP was a major disappointment and that there was “no sign of the bounce expected after pandemic restrictions were removed.” He asserted that it was time for government “to move away from their old socialist plans and make new plans that will create jobs”. Frank Blackmore, lead economist at KPMG, said the contraction was expected considering that load shedding was recorded on around half of all business days in the second quarter. Research group Oxford Economics Africa commented that although initial data suggested an improvement in economic activity during the third quarter, the risk of loadshedding remained high and would continue to undermine the SA economy. Read the full original of the report in the above regard by Ina Opperman at The Citizen (subscriber access only) Emigration weighs on tax receipts as young, skilled people leave SA BL Premium reports that SA’s tax base continued to shrink in an economy in which per capita real incomes have been declining over the past decade, making revenue collection more difficult despite improvements at the SA Revenue Service (Sars). FNB economist Siphamandla Mkhwanazi told the annual Tax Indaba on Monday that one in five house sales were related to emigration, and 71% of those selling were aged between 35 and 44, who were often high net worth individuals at the peak of their careers. The loss of individuals at the peak of their productivity affects productivity and employment in the economy more broadly. Anecdotal evidence from corporates and professional services firms also suggests that young professionals, black and white, are leaving in part because there are more opportunities in advanced economies, which are growing faster than SA and are experiencing significant skills shortages. But Sars executive manager Mamiky Leolo said emigration was complex and not everything was lost from a tax perspective: “We are definitely seeing an increase in emigration, but a lot of those individuals still have assets and some income in SA even if they physically locate elsewhere.” Economists pointed out that SA’s personal income tax collections – which make up an unusually high proportion of total taxes – were resting on an ever narrower and more mobile group of upper-income individuals, with the middle class shrinking as the economy stagnates. According to Eunomix economist Claude de Baissac, there has been an unsustainable shift of the personal income tax burden to higher-income earners who have the capacity to emigrate. “The wealthiest and, increasingly, the middle class are being double taxed — they are paying for services they no longer receive from the state,” he pointed out. Read the full original of the report in the above regard by Hilary Joffe at BusinessLive (subscriber access only)
UIF won’t be ‘naming and shaming’ companies that stole millions in Ters funds EWN reports that the Unemployment Insurance Fund (UIF) on Tuesday said it won’t be naming and shaming companies that defrauded it of millions of rands in Temporary Employee/Employer Relief Scheme (Ters) funds. The relief scheme, which was introduced at the start of the Covid-19 pandemic, has paid out R61 billion over the last two years. But the UIF told Parliament that it was acting on legal advice in not sharing details of illegal claim submissions. The fund advised that the Special Investigating Unit had received acknowledgement of debt for Ters fraud worth R42 million. Of that amount, R33 million had already been paid back. UIF Commissioner Teboho Maruping told Parliament’s standing committee on public accounts on Tuesday that the scheme remained vulnerable to potential fraud. But the fund’s legal advisor Lucky Mkhonto said culprits won’t be revealed: “The legal opinion having looked at our MOA (Memorandum of Agreement) there’s no basis that we have covered in the MOA to name and shame those who would have defrauded.” Ten cases involving 34 accused and seven companies are currently before the courts. Read the full original of the report in the above regard by Lindsay Dentlinger at Other internet posting(s) in this news category
Jobs of some 1,000 Putco employees on the line over participation in strike Some 1,000 Public Utility Transport Corporation (Putco) employees have until Wednesday afternoon to make submissions as to why they should not be fired for participating in last week’s wildcat strike. Last Thursday, employees launched the strike action at the Dobsonville and Roseville depots over a 6% salary increase and outstanding bonus payments. The bus company turned to the courts to interdict the protest action, calling it a wildcat strike. Putco's spokesperson Lindokuhle Xulu said: “Anyone who did not come back on duty would then be dismissed and that is what is currently happening. About 1,000 of these workers will be dismissed, but the intention to dismiss simply means that they will be able to make representations to the company in a written format.” Asked if the company was concerned about further delaying the resumption of services should it dismiss employees, Xulu said it would hire from its pool of trainees and former employees who had lost their jobs at the height of the Covid-19 pandemic. "There are about 700 drivers who were dismissed during the pandemic. Putco also has trainees who recently graduated from the traineeship. There is an excess for us to tap into for recruitment," said Xulu. Meantime, Putco has applied for an exemption with the SA Road Passenger Bargaining Council (SARPBAC), citing the effects of the Covid-19 pandemic. Trade unions representing the company’s employees have appealed against that application. "The labour court is expected to make a ruling on whether or not an annual bonus for 2020 should be paid and the wage increase should be applicable. Until the labour court ruling has been made, no bonus and no increase are owed to employees," said Xulu. Based on reports by Cebelihle Bhengu at News24 and at EWN Other internet posting(s) in this news category
Bitter battle rages between workers and Wescoal over Arnot coal mine in Mpumalanga Fin24 reports that the future of the Arnot coal mine hangs in the balance as Wescoal, a 50% shareholder, seeks to place the entity in business rescue. The other 50% shareholder, Arnot InvestCo, which former employees of the mine own, has opposed such a move. The Arnot mine near Middelburg in Mpumalanga was previously owned by Exxaro Resources and was shuttered in 2015 after a long-term supply agreement with Eskom expired and wasn't renewed. Efforts by former Exxaro employees of the mine saw a deal in which those employees became joint shareholders with Wescoal in a new mining company, named Arnot OpCo. The revival of Arnot was widely celebrated when the operation reopened in 2019. In August last year, the mine's fortunes improved further when it clinched a 10-year coal-supply agreement with Eskom. But in a case heard in the South Gauteng High Court last week – for which judgment was reserved – Wescoal (owned by the Salungano Group) argued that Arnot OpCo was financially distressed and should be placed in business rescue. Because of allegations of blurring between rehabilitation and reestablishment costs as well as financial mismanagement, an independent investigation into Arnot OpCo's affairs was launched. As a result of the probe, two senior members of management, including the Arnot OpCo CEO, were suspended pending disciplinary proceedings – which are ongoing. Two liquidation applications have apparently already been launched against Arnot OpCo, with other creditors threatening to act soon. On the condition that Arnot OpCo was placed in business rescue, Wescoal said its ultimate shareholder, Salungano, had agreed to make "post-commencement" funding available. The consortium of former and current employees has, however, opposed the application for business rescue and has accused Wescoal of seeking to take control of Arnot OpCo. Read the full original of the report in the above regard by Lisa Steyn at Fin24 (subscriber access only) Other general posting(s) relating to mining
Naesa and Saefa seek to appeal ruling on extension of MEIBC wage deal to nonparties BL Premium reports that two minority employer organisations in the steel and engineering sector have applied for leave to appeal a Labour Court ruling that approved the extension of a multi-term wage deal to the entire industry. In August, the National Employers Association of SA (Neasa) and the SA Engineers’ and Founders’ Association (Saefa) failed in their court bid to interdict the Metals and Engineering Industries Bargaining Council (MEIBC) from submitting a request to Department of Employment & Labour (DEL) Minister Thulas Nxesi to gazette and extend a three-year, 6% wage agreement. The pay deal was reached by unions and the Steel and Engineering Industries Federation of Southern Africa (Seifsa) in October 2021. Acting judge Sean Snyman ruled last month that Neasa and Saefa had not established the requirements for urgency and failed to make a case for interim relief. In their notice of application to appeal the ruling, the two associations questioned Snyman’s judgment, saying he “erred in expressing a preference for the extension of bargaining council agreements in general”. They also argued that Snyman erred in finding that only the MEIBC and its members in favour of extension “would suffer prejudice if interim relief was granted”. They stated: “The learned judge altogether failed to have regard to the prejudice suffered by employers and employees alike on whom an unlawful decision is foisted, and erred in making light of the prospect of employers seeking to recover higher wages from employees ... in the event that the decision to seek extension is retrospectively set aside.” Neasa and Saefa said that if the application for leave to appeal was granted, “we will request that the matter be set down for an urgent appeal”. Read the full original of the report in the above regard by Luyolo Mkentane at BusinessLive (subscriber access only)
Cosatu warns that ANC must deal with corruption, rebuild state in order to win 2024 election BusinessLive reports that Cosatu has warned that factions, corruption and criminality pose a threat to continued worker support for the ANC, and if the party does not urgently address those problems, it could lose the 2024 general elections. This was the message the trade union federation delivered in its political overview ahead of its national congress later this month. “If the ANC is to win and retain power in the 2024 elections, nationally and provincially, then it needs to decisively deal with corruption, rebuild the state, end load-shedding, fix embattled SOEs [state-owned enterprises], spur the economy and reduce unemployment,” according to the report. “Political fatigue has not hurt the ANC alone but also the [tripartite] alliance as well, as we are seen to be part of the political establishment and responsible for the political and economic pain society is experiencing,” Cosatu said in its congress documents, which were released on Tuesday. Cosatu said coalitions were likely to occur in Gauteng, KwaZulu-Natal and the Northern Cape in 2024, “as well as nationally”, and that Cosatu “will need to prepare for this eventuality and possibly a government that does not include the ANC nationally and in major provinces.” Cosatu further stated that the “deterioration in the economy has been accompanied, exacerbated and, at times, caused by a deterioration in governance”, while corruption has significantly increased across the state, SOEs and local government. Cosatu’s national conference is scheduled to be held at the Gallagher Convention Centre in Midrand on 26 to 29 September. Read the full original of the report in the above regard by Luyolo Mkentane at BusinessLive Cosatu rejects ‘just transition’ as there are more pressing issues to be addressed first BL Premium reports that Cosatu has rejected ‘just transition’ moves to a low-carbon economy, saying there are more pressing issues to be addressed. The just transition approach is intended to reduce use of fossil fuels without disadvantaging workers and communities. Coal is by far SA’s major energy source, comprising about 80% of the country’s energy mix. The trade union federation fears that just transition will have a huge harmful effect on its affiliates’ members, their families and all coal-mining towns. On Tuesday, it said SA’s failure to mobilise around a sound industrial policy and a basic income grant were among the outstanding issues that needed to be addressed before a “just transition” could be committed to. Cosatu’s stance is contained in its policy documents to be discussed at its national congress later in September. Last week the cabinet approved its just transition framework, which signalled that any implementation would have to include intensive consultation with social partners. The cabinet affirmed that the shift to a net-zero carbon economy by 2050 should support national development aspirations, including decent work for all, social inclusion and the eradication of poverty. But Cosatu has proposed that instead of a just transition, a programme for eco-socialism be adopted. That would entail democratic ownership of mines, as a step before any discussion on decommissioning them. It also pointed out that there could be no just transition without the redistribution of land. Read the full original of the report in the above regard by Hajra Omarjee at BusinessLive (subscriber access only)
Busa raises questions after U-turn on skilled work visas adds new uncertainty BL Premium reports that SA’s embassies and consulates abroad will go back to processing long-term visa applications on-site after the Department of Home Affairs (DHA) backtracked on a centralised system, which had forced all applications to go to Pretoria. The centralised system caused lengthy delays. But it is not clear whether the applications already in the pipeline will be dealt with under the new system or the old, adding to the uncertainty that has undermined SA’s ability to attract crucial foreign skills and investment. While Business Unity SA (Busa) welcomed the move as a step in the right direction, it urged that the new decentralised system be used to clear the backlog of applications as well as to process new visas. Busa raised the skilled work visa issue at its meeting last week with President Cyril Ramaphosa, who promised to intervene. In a directive dated 31 August, DHA director-general Tommy Makhode said the original directive would be withdrawn effective 1 September. Many of these visas are for crucial foreign skills. Previously, the applications were processed and finalised by consular officials in the diplomatic missions. The change of system earlier in 2022 was intended to create consistency among application processes, but it created delays, leaving many employers frustrated. Officials at diplomatic missions have now been advised to adopt a “risk-based approach during the processing of visa applications”. Busa’s Cas Coovadia commented: “This appears to be a move in the right direction regarding the addressing of substantial delays in the processing of visa applications from senior business leaders of global companies employing thousands of people in our country … We look forward to more detail on this and expect the directive to be implemented immediately, resulting in the long backlog of visa applications being reduced.” Read the full original of the report in the above regard by Linda Ensor & Bekezela Phakathi at BusinessLive (subscriber access only) Claims of harassment and intimidation as Zimbabwe Exemption Permit case turns ugly Moneyweb reports that the fight over the future of Zimbabwe Exemption Permit (ZEP) holders, as to whether some 178,000 Zimbabweans will be allowed to live and work in SA, is getting ugly. On the same day that Department of Home Affairs (DHA) Minister Aaron Motsoaledi announced another extension of the ZEP system, the lawyer representing ZEP holders, Advocate Simba Chitando, said he and his family have been exposed to an unprecedented campaign of intimidation and harassment at the hands of the DHA. Chitando’s former wife Nosiphiwo Jodwana has gone into hiding, fearing for her safety. Chitando has come the target of xenophobic attacks on social media for his outspoken views in defence of Zimbabweans in SA, and for arguing that the DHA is making a fortune off Zimbabweans, who have had to shell out close to R1,000 for the ZEPs. On Friday, two DHA officials visited Jodwana’s place of work in Pretoria and extracted an affidavit, apparently under duress. Chitando and his attorney, Sindiso Sibanda, are now planning to bring an urgent cease and desist application against the DHA and to have Jodwana’s affidavit declared invalid on the grounds that it was obtained under duress, and was not properly commissioned. The ZEP system has been in operation in various forms since 2009, allowing Zimbabweans to live, work, study and conduct business in SA. Last year Motsoaledi announced the ZEP scheme would be terminated at the end of 2021. He then extended the termination period by a year to December 2022, and now again by another six months – until 30 June 2023. The DHA wants ZEP holders to apply for work visas using the so-called critical skills list, which outlines those skills needed in SA. Read the full original of the report in the above regard by Ciaran Ryan at Moneyweb. Read too, Four out of five diasporan Zimbabweans live in SA, stats agency says, at BusinessLive
UIF and Compensation Fund halt new investments by PIC in unlisted assets BL Premium reports that the Unemployment Insurance Fund (UIF) and the Compensation Fund have said no to ramping up investments in unlisted entities by the Public Investment Corporation (PIC), which acts as the asset manager for the two funds. The UIF cited as its reason the poor performance in the sector, including the liquidation of several companies. But, the approach of the funds towards their unlisted investment portfolio contrasts with the approach of the PIC, which told MPs in June that it planned to ramp up its unlisted asset share from the current 5% to a “visionary” 25% over the next five years to drive transformation and job creation. It claimed it had negotiated a new investment mandate with its clients that provided for the new framework for unlisted investments. The two funds disclosed their approach to their unlisted investments when questioned during a meeting with parliament’s standing committee on public accounts (Scopa) on Tuesday. The UIF has unlisted investments of R20.6bn in just more than 25 unlisted companies, while the Compensation Fund’s unlisted investments amount to R2bn. The commissioners of both funds undertook to provide Scopa with a report on their unlisted investments. UIF CFO Fezeka Puzi told MPs: “Due to the poor performance of some of these instruments and some of these instruments being impaired to an extent that the fund sometimes gets to lose money [some of these instruments are under liquidation], the fund took a decision to say that we are not going to invest further in these unlisted investments. We are going to put a hold on those and only service the ones that are now performing. However, we are also looking at a strategy of exiting these instruments.” Read the full original of the report in the above regard by Linda Ensor at BusinessLive (subscriber access only)
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