Business rescue proceedings failing
- South Africa has developed similar legislation as the US and Europe to save companies in financial distress, yet the level of success in this country remains limited (as per an article by Amanda Visser).
- The Companies and Intellectual Property Commission (CIPC) reported in March this year that four years ago since the introduction of business rescue proceedings, 1,654 business rescue proceedings commenced of which 771 were ended.
- Figures from StatsSA shows that more than 360 companies were liquidated between July and August this year alone. More than 830 companies are still in business rescue proceedings (since 2011).
- The main factors contributing to this lack of success with rescuing a company is a continued focus on liquidation rather than restructuring, a lack of experience and a lack of forgiveness for failure, says EY Africa Tax Leader Jim Deoitte. He adds that a fundamental problem facing SA is the lack of experience in dealing with “bankruptcy restructurings”.
- Companies wait too long before engaging in business rescue proceedings because of the fear of losing control over the process and they also see the need for restructuring as a mark of failure.
- Robert Appelbaum of law firm Webber Wentzel is hopeful about the process, but only if there is someone in government who realises that there are strategic issues that have to be dealt with, that there be an increase in skilled business rescuers and that a transparent database on business rescues is developed and published widely.
Salary payment problems at the Post Office and CWU march
- The SA Post Office (Sapo) has informed employees that they will receive only half their salaries on 23 October, and the rest at the end of the month.
- The CWU has also announced that it is planning to march in Johannesburg on 29 October 2015 to the offices of Sapo.
- The march has been spurred on by a number of factors, including late salary payments by Sapo, the union’s concern over the use of temporary workers and the union’s demand that the Public Protector release a report on ghost workers and corruption at Sapo.
Northam (Booysendal platinum mine)
- Northam Platinum is to apply a wage agreement reached between its mining contractor, Murray and Roberts Cementation (MRC), and unions at its Booysendal mine.
- The union signatories include the Association of Mineworkers and Construction Union (Amcu), the National Union of Mineworkers (NUM) and Solidarity.
- The three-year agreement provides for similar increases as what was agreed for Northam’s Zondereinde mine in July 2015 (also a three year agreement).
- The Zondereinde agreement provided for entry-level underground workers to receive a 13% increase on basic pay and allowances in 2015, with increases of 11.6% and 10.5% in subsequent years. Supervisory employees received a basic increase of 7.5% per year for each of the three years.
Collective bargaining levels dropping
- Low union membership and increasing competition among unions are some of the reasons South Africa is listed as having medium to low bargaining coverage in an International Labour Organisation (ILO) study.
- According to labour analyst, Tony Healy, the new research shows that collective bargaining has “come under pressure in many countries since the start of the global financial crisis in 2008”.
- The ILO sampled 48 countries and found there was a 4.6% drop in coverage rates between 2008 and 2013.
- The research put South Africa, along with Japan, Canada and the UK, in the medium to low bargaining coverage range.
- Coverage rates are the proportion of workers whose pay and working conditions are regulated by one or more collective agreements.
- The countries also recorded a union membership decline of 2.3%.
- Healy commented that there was a growing resistance to the collective bargaining system in SA. His sentiments are supported by many others in the labour environment, including some unions. They have voiced concern with the direction of the system, once hailed one of the greatest achievements of democracy.
- The ILO report concludes: “Given rising inequality and the demand for social justice, public policies need to shore up collective bargaining and also enhance its coverage and inclusion.
Funding of state’s additional R64bn wage hike
- Finance Minister Nhlanhla Nene said last Monday that the Treasury was “certain” that the additional R64bn that this year’s public sector wage agreement will cost the state over the next three years can be accommodated within current expenditure limits.
- He indicated in a reply to a parliamentary question that the contingency reserve would be used to cover part of the additional wage cost “and so will resources available due to projected underspending.”
- Some reprioritisation from other budget lines will also be required. Line departments at national and provincial level are being engaged to assess the magnitude of shifts required for reprioritisation.
- Nene noted that preliminary indications were that the 2015 wage agreement would cost as much as R63.9bn over and above what was provided for over the 2015 medium-term expenditure framework.
- Of this, R41.5bn was for cost of living adjustments, R11.1bn for medical assistance and R11.4bn for the housing allowance. On the local government wage bill, Nene said the recent three-year agreement would increase the total wage bill for municipalities from R77.9bn in 2014-15 to R94.6bn in 2017-18. This will be funded from municipal income generated from property rates, trading services such as electricity, water and other related service charges such as refuse removal and sanitation charges, coupled with equitable share transfers from national government.
STRIKES & PROTEST ACTION
Sinosteel/ASA Metals Dilokong Mine
- More than 150 family and community members have joined striking workers at the mine near Burgersfort (Limpopo).
- The unprotected strike started on Friday with employees refusing to come to surface (although the NUM is the recognised union at the mine the sit-in tactic is probably indication that Amcu is also involved at the mine).
- The main demand is for the dismissal of the Human Resources Manager of the mine who is perceived as being victimising union members.
NUM strike at Tormin mine (West Coast)
- The National Union of Mineworkers (NUM) has indicated that about 25 workers at the Australian-owned Tormin mine on the west coast, who went on strike last month, were suspended last Sunday.
- It appears that some of the miners have been charged with misconduct and others with intimidation and damage to company property.
- According to the NUM, nearly 200 Tormin employees went on strike on 4 September over wages and working hours. On 10 September, clashes with police and security at the mine led to the arrest of 27 workers and west coast community members. Charges against 17 people were dropped. The remaining ten were released on R500 bail each and are due back in court on 3 December.
- The mineral sand mine extracts zircon and other minerals from sand on the beachfront near Lutzville and is owned by the Mineral Commodities Limited (MRC).
- About 600 National Union of Food Beverages Wine Spirits and Allied Workers (Nufbwsaw) members continued a week-long strike at a Woolworths distribution centre in Midrand.
- The union embarked on a protected strike last Monday and is demanding a R7,000 minimum wage. Woolworths indicated on Monday that the union was demanding a 110% increase in wages plus additional allowances, with an overall increase (including benefits) of 130%. It also said that its Montague Gardens and Maxmead Distribution Centres had reached an agreement on salary increases through on-site committees, which allowed for a 10% increase.
- The union’s general secretary Nqobile Tshabangau claimed Woolworths was paying R3,000 to R3,600 as a minimum salary, while, according to him, entry level staff working for other retailers earned up to R10,000.
- (Yet again) Gautrain bus drivers on Monday embarked on disruptions to the bus service by taking unauthorised lunch breaks.
- The company confirmed that it experienced some “illegal” disruptions to the bus services in the morning.
- The drivers are reportedly unhappy that management has not yet approved a proposed meal interval.
Tshwane suspends bus drivers
- The City of Tshwane has urged commuters to make alternative transport arrangements this week following the issuing of suspension letters to bus drivers resulting in the bus service only being 40% operational.
- Last Monday, 98 bus drivers and 41 other employees were suspended for their involvement in an unprotected strike earlier this month.
- Last month, the SA Municipal Workers’ Union (Samwu) instructed drivers to stop operations following concerns over their working conditions. Drivers said they no longer wanted to carry money bags on them while they worked, out of fear of being targeted by criminals.
- They have apparently battled with management for over two years, and have urged the city to consider an alternative system. The city has claimed that the failure of drivers to execute their duties has resulted in a loss of revenue.
Algoa bus strike in Nelson Mandela Bay
- The month-long bus strike that has crippled transport services in the Nelson Mandela Bay metro has ended with the Algoa Bus Company reaching a deal with the trade unions.
- The strike has left thousands of residents in the Nelson Mandela metro stranded when about 412 buses came to a standstill.
- After four weeks of negotiations, the parties have now agreed, amongst other things that a commissioner will be appointed to officiate at disciplinary hearings, that unions will henceforth attend operational meetings of the company and that monies deducted from employees for damages to company property during the strike will be repaid.
- The parties, however, failed to agree on the provision of a free bus to take workers to attend funerals of colleagues.
- Even though there is an agreement to resume work, certain pending issues will continue to be discussed.
Samwu wants EPWP jobs to be permanent
- The SA Municipal Workers’ Union (Samwu) has resolved to get millions of extended public works programme (EPWP) workers fully employed by municipal councils across the country.
- Samwu’s central executive committee met last week and took a decision that workers in the poverty-alleviation programme should be employed by municipalities because they were being exploited as contract workers.
- The EPWP was introduced in 2004 to alleviate poverty and to create work opportunities coupled with training.
More senior Samwu leaders face arrest for fraud
- More senior leaders of the SA Municipal Workers’ Union (Samwu) allegedly linked to the theft of more than R178 million of union funds are facing arrest, while four others are out on bail.
- This emerged last Tuesday in the Johannesburg Commercial Crime Court during the second bail application of Sam Phaswane, one of the alleged theft syndicate members.
- Phaswane stands accused of 35 counts of fraud while he was the financial consultant for Samwu. He allegedly siphoned off more than R9.5m from Samwu’s account and since 2013 channelled the money into his personal account.
- Phaswane was arrested on 9 February and a previous bail application failed. During his second bail application yesterday, he argued that his continued incarceration was severely affecting his business interests.
- The Court granted Phaswane bail of R50,000, which is the same amount of bail granted in respect of Samwu deputy secretary Moses Miya, and officials Surprise Mnisi and Zukiswa Ntsiko. The four are due back in court on 18 January.
- The Hawks are still investigating.
Cosatu to intervene in ailing affiliates’ divisions
- Labour federation Cosatu is considering expanding the ability of its leadership to intervene in the activities of embattled affiliates.
- Discussion in this regard would take place at the federation’s national congress, scheduled for next month.
- Cosatu resolved at a two-day special central executive committee meeting last week to establish a task team to probe affiliate divisions. It also needs to find means to allow its leadership to intervene in disputes, while still respecting affiliate autonomy.
- Both the SA Transport and Allied Workers’ Union (Satawu) and the SA Municipal Workers’ Union (Samwu) saw splinter unions being formed last month.
- Satawu’s splinter union is the second to be formed in the past three years.
- Meanwhile, Samwu is also facing deep divisions related to allegations of millions of rands having gone missing from union coffers.
- In addition, there is the possible implosion of the Chemical Energy Paper Printing Wood and Allied Workers’ Union (Ceppwawu).
- The splinter municipal union formed last month is known as the Democratic Municipal and Allied Workers Union of SA (Demawusa). Demawusa said Samwu was now in a “state of terminal decline”, with general secretary Mohau Mokgatla claiming that, while former corrupt activities of some Samwu leaders were finally catching up to them, it was too late for the municipal union.
Satawu loses 400 members at Sasol’s Secunda plant
- The SA Transport and Allied Workers’ Union (Satawu) was outsmarted by a little-known union after it allegedly failed to contest a closed shop agreement and lost nearly 400 members at Sasol’s Secunda plant.
- Until four months ago Cosatu-affiliate Satawu represented the 400 security guards employed by Servest to guard the petrochemical giant’s industrial and residential premises in Mpumalanga.
- However, the union did not adequately service its members and failed to contest the closed shop agreement between Servest and the Kungwini Amalgamated Workers Union (Kawu).
- According to the company, an agreement was reached at the CCMA.
- The Department of Labour’s basic guide to closed shop agreements indicated that such agreements require non-union workers to join the union with which the agreement was signed or face dismissal. But it is only legally binding if two-thirds of the workers are in favour of the agreement.
- Yet, Servest security guards say they were never consulted about the closed shop agreement.
- Disgruntled workers claim the company unilaterally imposed Kawu on them without them signing membership forms as was the case when Satawu started recruiting them last year.
Marikana: Seventeen charged with deaths of 10 persons
- The National Prosecuting Authority (NPA) has charged 17 Marikana mineworkers who were allegedly involved in the killing of 10 people in the days leading up to the 16 August 2012 massacre.
- Those charged appeared briefly in the Garankuwa Magistrate’s Court on Tuesday. They have been charged with murder, attempted murder, malicious damage to property and unlawful possession of firearms and ammunition.
- Two of the 19 original accused have since died.
- Ten people, including two police officers, security guards and several union members were killed in the violence that gripped Marikana before the 16 August shooting of 34 people by the police. The crimes were committed from 12 to 15 August 2012.
- NPA spokesman Frank Lesenyego said the case had been transferred to the North West High Court for a pre-trail conference in Mahikeng on 2 December. A trial date will only be provided at the pre-trial conference by the judge president and indications are that the trial will run next year.
- Meanwhile, victims of the Marikana massacre want the government to pay R1bn as compensation for the losses they suffered.
Unions move to block beer merger between SABMiller and InBev
- Based on reports in the UK’s Daily Mail, unions in South Africa have called on competition regulators to block the £68billion takeover of SABMiller by Anheuser-Busch InBev.
- London-listed SAB is Africa’s biggest brewer with a heritage dating back 120 years, but workers’ groups in SA fear the deal will trigger job cuts.
- InBev has a track record of growing by debt-fuelled acquisitions and repaying loans through fierce cost-cutting.
- The Food and Allied Workers’ Union (Fawu) said it would oppose the merger, as did labour federation Cosatu.
- SAB employs around 8,800 workers in SA and contributed £780million in local tax revenues.