In our Thursday morning roundup, see
summaries of our selection of recent South African
labour-related reports.
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Eskom’s lack of professionalism on full display in current wage negotiations Financial Mail writes that Eskom and its three representative unions, namely the National Union of Mineworkers (NUM), the National Union of Metalworkers of SA (Numsa) and Solidarity, resumed their third and final round of wage negotiations this week. While such talks usually involve some give and take by both unions and employers, the past two rounds have been particularly frustrating for the unions, which together represent about 27,000 skilled and semi-skilled workers at Eskom. Agility and professionalism on the part of management would seem to be noticeably absent so far. The unions’ observation is that, if the current wage talks are any indication of how the power utility is run, it’s no wonder it can’t keep the lights on. What has really stood out at the talks, as far as labour is concerned at least, is the poor quality of Eskom’s negotiators. “I must be honest, they are simply disorganised and unprofessional, for lack of a better way to put it,” NUM chief negotiator Olehile Kgware remarked. Solidarity general secretary Gideon du Plessis said the process was “highly frustrating” and added: “It is as if they don’t understand wage negotiations, which they have been doing every year; they are ill-prepared and all over the place.” Numsa general secretary Irvin Jim said much the same: “It is a mess, the bad management of Eskom is on full display.” A wage agreement seems far off. The largest union NUM is pushing for 11%, Numsa is seeking 15% and Solidarity is willing to consider an increase in line with inflation. Eskom is offering 4.5%. Eskom, for its part, said it was “incorrect” to suggest that it was unprepared and negotiating in bad faith. “We view these statements as a negotiation tactic that is used from time to time,” the utility commented. It does, however, remain optimistic that an amicable solution will be found. Read the full original of the insightful report in the above regard by Natasha Marrian at Financial Mail (subscriber access only)
Treasury's stance on public sector wage increases unrealistic, says Sachs Fin24 reports that Michael Sachs, deputy chair of the Finance and Fiscal Commission, says the fact that National Treasury did not budget for public-sector wage increases this year was not realistic or credible. Speaking on Wednesday, Sachs, who is also a professor at Wits University, said he disagreed with the National Treasury's claim that the public wage bill would result in an additional R37.4 billion expense it did not foresee. Treasury warned in March that the 2023/24 and 2024/25 wage deal signed earlier that month would require that significant trade-offs be made. The wage deal includes a 7.5% increase for 2023/24 and a CPI-linked wage increase for 2024/25. Treasury said it would cost the government an additional R37.4 billion in the current fiscal year because the deal was not provided for in the February budget. But Sachs believes that for Treasury to term this as an "additional" or unbudgeted expense, implies that it factored a zero percent increase in salaries of all public servants in a high inflation environment. "I don't think that was ever realistic or ever credible," said Sachs. He argued the National Treasury was increasingly using the budget as a negotiating tool instead of an actual estimate of what the government will spend each year. He also cautioned that the 7.5% figure only amounted to an increase of 3% as 4.5% of the increase replaced the non-pensionable gratuity that workers had received for the past two years. According to Sachs, public servants have faced a persistent real fall in their income since 2020. And for three to four years now, public doctors, teachers, nurses and police in SA have been worst off. Read the full original of the report in the above regard by Londiwe Buthelezi at Fin24
Security guards and cleaners march in Pretoria to demand permanent jobs for 4,000 workers GroundUp reports that hundreds of security officers and cleaners working for 22 companies contracted to the City of Tshwane marched in Pretoria’s city centre on Wednesday, demanding permanent employment with the City. The workers, led by the South African Cleaners, Security and Allied Workers’ Union (SACSAWU) and the Independent Democratic Union of SA (IDUSA), handed over a list of demands to the mayoral committee member for community safety, Grandi Theunissen. Sello Matloa, a security officer and SACSAWU shop steward, said security guards earned R5,000 a month at private companies, which was too little to maintain a family, and if the City took them onto its payroll the costs of the “middle man” would be scrapped. The unions claimed that the City resolved in 2018 to insource 4,000 security guards in three phases. Joshua Mudau, IDUSA organiser in Tshwane, said: “They must allocate funds for us. We also want a formal meeting with the City manager or the executive mayor. Some of us have been in the City for many years, and we feel this is unfair to us.” In a memorandum, the unions demanded that the City must implement the 2018 resolution, and ensure security guards were paid a living wage, with benefits such as medical aid, pension and leave. They gave the City 14 days to respond to their demands. Read the full original of the report in the above regard by Chris Gilili at GroundUp
Despite years of safety warnings, Mthatha prison guard dies in fire at shacks used as barracks News24 reports that the Department of Correctional Services (DCS) continues to use corrugated iron sheet structures on prison grounds as barracks for employees at Mthatha prison. This is despite unions having flagged safety fears for years and the Department of Public Works (DPW) saying the structures should be demolished. In the early hours of Sunday morning, a prison warder was trapped and killed in a blaze that engulfed a section of about a dozen of the metal shacks which had no fire extinguishers or emergency exits. The Police and Prisons Civil Rights Union (Popcru) expressed anger over the loss of life of the 27-year-old man. In 2010, the DPW recommended that the DCS should demolishes the inadequate structures. However, according to Popcru, the department ignored several calls for it to eradicate the shacks and build proper accommodation for prison staff. The DCS also has brick-and-mortar living quarters for employees, but these too are in poor condition. Prison officials claimed that despite paying monthly rent, the department hadn't carried out maintenance on the buildings in decades. "Inmates live in far better conditions inside the cells," one official said. Popcru’s Xolani Prusente slammed the department for subjecting employees to appalling conditions. Without giving details, DCS spokesperson Singabakho Nxumalo said there was a planned project to construct housing facilities for officials. A police spokesperson confirmed that an inquest docket had been opened following the blaze and said the circumstances surrounding the incident were under investigation. Read the full original of the report in the above regard by Malibongwe Dayimani at News24 (subscriber access only)
Patel says government in talks to shield carmakers from load-shedding BL Premium reports that trade, industry & competition minister Ebrahim Patel said on Wednesday that government was in talks with the car manufacturing industry to probe ways in which it could be protected from load-shedding. At a media briefing ahead of his budget vote speech, Patel noted the importance of the car industry, which contributed about 4.5% of GDP on a gross basis as well as exports from the country. He would not disclose the possible ways in which the industry could be spared from the load-shedding crisis. Patel said the impact of load-shedding on a very important industry was “significant” and had been discussed within government. “We have now elevated the challenges that the sector faces to a joint discussion between a number of portfolios in government and have been engaging with the industry,” Patel indicated, adding that electricity minister Kgosientsho Ramokgopa had met a number of players in the sector and he had met a number of CEOs. Teams are working on the issue. Patel said: “We are finalising an approach to that. What an auto plant needs is certainty of its energy supply and what it needs is full utilisation of its plant. When you work at three-quarter level or two-thirds level you lose the economies of scale and the pricing advantage that it brings. That of course makes SA vehicles less competitive.” Read the full original of the report in the above regard by Linda Ensor at BusinessLive (subscriber access only) Other internet posting(s) in this news category
Scopa has more questions for De Ruyter over allegations of corruption at Eskom TimesLIVE reports that parliament's standing committee on public accounts (Scopa) wants former Eskom CEO André de Ruyter to appear before it again, as questions about allegations of corruption he made during an interview with eNCA in February remain unanswered. Committee members were unanimous that they needed to probe further before deciding a way forward. On Wednesday, Scopa MPs – who over the past month have listened to De Ruyter, police and Hawks bosses, the Special Investigating Unit, Eskom board and public enterprises minister Pravin Gordhan – felt more information was needed to decide on a course of action. There was a suggestion that De Ruyter, who refused to answer some of their questions during his first appearance last month, be subpoenaed next time so that he can name those he claimed were involved in fleecing the power utility. Among others whom Scopa wants to hear from is Gen Jaap Burger, the Hawks investigator who was designated by national police commissioner Fannie Masemola to interact with De Ruyter after De Ruyter raised corruption allegations with the police in June last year. MPs also want the auditor-general, director-general in the Presidency Phindile Baleni and former Eskom board member Busisiwe Mavuso to appear before the committee. Scopa will hear from President Cyril Ramaphosa’s national security adviser Sydney Mufamadi on Friday and the Eskom board will be reinvited to further probe what it knew and its role in the saga. Read the full original of the report in the above regard by Andisiwe Makinana at SowetanLive
Saftu president in new Labour Court challenge to Numsa national congress Sunday Independent reports that SA Federation of Trade Unions (Saftu) president Ruth Ntlokotse has launched another Labour Court bid to overturn the outcomes of several National Union of Metalworkers of SA (Numsa) gatherings held last year. Ntlokotse, formerly Numsa second deputy president, was expelled from the union last week amid various allegations levelled against her, all of which she denies. Ntlokotse has announced her intention to appeal her expulsion. In papers filed at the Labour Court, Ntlokotse wants the Numsa national congress, which was held in Cape Town in July last year and at which she intended to run for president, to be declared null and void for failing to comply with the union’s constitution. At the national congress, Andrew Chirwa was elected president, Mac Chavalala was elected first deputy president and Irvin Jim was reelected general secretary. According to her court papers, Ntlokotse wants Numsa’s extended central committee meeting held in December declared unconstitutional, invalid and unenforceable in law. The decisions taken at the extended central committee meeting included placing the Western Cape region under administration and the taking over of the affairs of the Mpumalanga region. In Numsa’s response, Jim said Ntlokotse effectively sought to set aside an entire year’s worth of worker organisation by the trade union and that if the relief she was seeking were to be granted it would be prejudicial to the union and its more than 300,000 members. Read the full original of the report in the above regard by Loyiso Sidimba at Sunday Independent
Debt-laden Nampak flags job cuts, salary freezes and overtime reduction as it battles cash crunch BL Premium reports that debt-laden Nampak is preparing for huge job cuts, salary freezes and a reduction in overtime as it battles a cash crunch that eroded its share value over the past five years. Nampak interim CEO Phil Roux also announced a reduced rights offer of up to R1bn to help raise capital to pay off R6bn in debt incurred after a disastrous expansion into Africa. Nampak’s debt far outweighs its R455m market value. The packaging manufacturer plans to merge two divisions, BevCan and DivFood, into one entity as it works to simplify its structure and draw on efficiencies to turn around its fortunes. “We will reduce our headcount significantly across the entire organisation,” said Roux. This is one of the difficult decisions he has had to make since his appointment just more than four weeks ago. Roux added: “There is a vacancy freeze edict from my desk. Absolute salaries will be reduced and reinstated when our cash generation allows for that.” This will be done in accordance with the right-sizing of the portfolio. “We are going to attack over time. It’s a big number in our organisation, and the head office reduction will be real,” Roux said without elaborating. He assured that the chop would not be made all in one go. “We will not be reckless,” said Roux. Nampak employs just more than 4,000 people in its metals, paper and plastics divisions in SA, with its Cape Town-based R&D division employing many scientists, engineers, technologists and technicians. Read the full original of the report in the above regard by Michelle Gumede & Andries Mahlangu at BusinessLive (subscriber access only). Read too, Nampak 'cannot and simply won't fail' says new CEO as he grapples with crippling R5.9bn debt pile, at Fin24 (subscriber access only)
Sticky core inflation supports case for interest rates hike BL Premium reports that SA’s headline consumer inflation slowed more than expected in April but core prices remained sticky, leaving the door open for another 50 basis point hike in interest rates when the Reserve Bank ends its monetary policy committee (MPC) meeting on Thursday. The Bank, which began the tightening cycle in November 2021, has been looking for signs that its actions are having an impact on inflation. But a recent blowout in the rand-dollar exchange rate has raised worries about its impact on prices of imported goods such as fuel. While the headline inflation rate, as measured by the consumer price index (CPI), slowed to an 11-month low of 6.8% in April on an annual basis, core inflation rose 5.3%, from 5.2% in March. Core inflation strips out volatile food and energy and better reflects underlying price pressures. Analysts expect the Bank to tighten policy by 25 basis points to 8%, but financial markets have priced in a larger move, which will put further strain on households with mortgage debt. Nedbank said its base-case scenario was for a 25 basis points hike in policy on Thursday, though there was a chance of 50 basis points given the weaker currency, which could lead the Bank to revise higher its inflation forecast. “We believe that [Thursday’s] hike will be the last in the current cycle and will be followed with steady rates for the remainder of the year. The easing cycle is likely to begin in the first quarter of 2024,” Nedbank said in a note. Read the full original of the report in the above regard by Monique Vanek at BusinessLive (subscriber access only). Read too, Although inflation cooled in April, price embers still smouldering, at The Citizen. And also, South Africans face more interest rate hike pain, at Fin24
No May salaries for Ditsobotla employees as municipality’s downward spiral continues The Citizen reports that employees at the coalition-led Ditsobotla Local Municipality are at their wit’s end after they were told this week that they will not receive their May salaries. They were due to be paid on Thursday. Ditsobotla includes the towns of Lichtenburg, Coligny and surrounding villages and townships. The municipality also owes millions to medical aid schemes and pension funds after it defaulted on paying the third parties. This is despite a team of experts sent by the provincial government weeks ago to work on getting the failing North West council back on track. Corruption, maladministration and payment of ghost workers have emptied the coffers over the years, while communities go for months without water and other basic services. The Ditsobotla municipality was dissolved by the national government last year after ANC infighting split the council into two, with each side having its own executive and rendering the municipality dysfunctional. Before the dissolution, the municipality was placed under administration several times. Municipal spokesperson Pius Batsile on Wednesday laid the blame on the outstanding financial recovery plan: “Ditsobotla is still trying to recover and has no money as things stand. Our collection rate is below 50, meaning residents are not paying for services. We expect the financial recovery plan to be finalised by the end of this month, after which, I believe, things will improve.” Read the full original of the report in the above regard by Getrude Makhafola at The Citizen (subscriber access only)
DA slams Employment Equity Amendment Act, saying quotas ‘reduce citizens into decimal points' News24 reports that the Democratic Alliance (DA) continues to express outrage over the Employment Equity Amendment Act, claiming that it will lead to massive problems in race relations and would pit races against each other. Leader John Steenhuisen said segregation was supposed to have been left behind when the country adopted the Constitution, which has non-racialism at its core, but this act resuscitated discriminatory legislation. The DA leader, along with other senior party members, discussed the implications of what the party termed “the ANC’s race quota act" on Wednesday. Last month, President Cyril Ramaphosa signed the Employment Equity Amendment Bill of 2020 into law. The Act empowers the Department of Employment & Labour to set new transformation targets for industries, including regional ones, while also sparing many smaller businesses from the need to report annually. The DA said such “quotas” were unacceptable and violated the constitutional rights of all races, not only minorities. “How do you reduce a citizen of this country, who is a taxpayer, to a decimal point in their own country? […] If you are a black female in the Northern Cape, the target is 15.2%. That means if a business ... wants to open up a shop and employ 100% black females, [it] is going to be prevented from doing so because the quota is only 15%. So, it disseminates against minorities and it discriminates against black South Africans. It is a bad set of regulations,” said the visibly incensed DA leader. He added that, while his party supported the advancement of opportunities for South Africans who have been disadvantaged, the DA did not support this through means that violated the Constitution. Read the full original of the report in the above regard by Juniour Khumalo at News24 (subscriber access only)
Former Northern Cape head of roads and public works together with a company director in court for R420m tender fraud News24 reports that a former head of the Northern Cape Department for Roads and Public Works and a director of Babareki Consulting Engineers, who appointed a liquidated contractor on a building project, were arrested on Tuesday for fraud, corruption, and money laundering totalling R420 million. Patience Mokhali and Tshegolekae Motaung were arrested by the Hawks' Serious Corruption Investigation team in Kimberley and face charges of contravention of the Public Finance Management Act, fraud, corruption and money laundering. They appeared in the Kimberly Magistrate's Court, where Mokhali was released on R10,000 bail and Motaung on R50,000. Kimberly National Prosecuting Authority spokesperson Nomthandazo Mnisi said the two embarked on a project in 2003 to construct a new mental health facility in Kimberley. Some R420 million was paid to a contractor, Vista Park, which was later liquidated. The project was initially budgeted for R290 million. Mnisi indicated: "It was discovered that the company that was appointed did not have the capacity to render the service and the contract was terminated while money was already paid. Work on the project has since been halted, leaving the facility incomplete and unusable and at a considerable cost to the Department of Health.” He added that while the mental health hospital was under construction and for the years that the project was ongoing, there were issues of maladministration. The matter was postponed to 11 July. Read the full original of the report in the above regard by Tshepiso Motloung at News24
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