SALARY & WAGE NEGOTIATIONS

  • The SA Municipal Workers’ Union (Samwu) in Tshwane announced this past week that between 200 and 300 of its members employed by the Sandspruit Works Association (a municipal entity of the City of Tshwane) would officially be on strike from last Wednesday.
  • Sandspruit Works Association, trading as Odi Retail Water, is responsible for the provision of water to northern parts of Tshwane, including Ga-Rankuwa, Mabopane, Winterveld and Temba.
  • Samwu’s Mpho Tladinyane said the union and the company had met regarding salary and wage improvements and other labour-related issues, but the talks failed to yield positive results.
  • At the time of the dispute, Samwu’s wage demand was for a 9% increase, while the employer’s offer was 7%, Tladinyane said.
  • Workers were also demanding that the company consult labour at the bargaining forum regarding deductions from employees’ salaries for monies owed.

Criticism of Cosatu’s national minimum wage concept

  • Nicoli Nattrass and Jeremy Seekings, (both University of Cape Town economists) indicated that the views of labour federation Cosatu on the level of a national minimum wage, the procedures for determining this level and the consequences for employment are all out of line with international experience.
  • Cosatu has called for a national monthly minimum wage of R4,125 to R5,276.
  • This would involve doubling or even trebling many existing sectoral minimums.
  • Yet, Cosatu rejects evidence (including recent calculations from the Treasury) that a high national minimum wage would result in the destruction of jobs and growth.
  • In Cosatu’s view, the Employment Conditions Commission (ECC), Treasury and independent experts are all mistaken in thinking that there is any trade-off between wages and employment.
  • A high wage, Cosatu claims, would be good for growth and employment.  It moreover insists that the level of a national minimum wage be set politically, without either the participation of independent experts or the requirement to consider likely effects on job destruction that characterise the ECC’s existing parameters.
  • Legislation provides for the ECC to recommend what is in effect a national minimum wage, by setting a wage determination for all otherwise unregulated sectors.  But the legislation does require the ECC to consider the effects on job destruction.

Executives’ earnings at 22 times more than the average worker

  • Ryk van Niekerk of Moneyweb, writes that South African executive directors’ guaranteed annual remuneration is around 22 times the salary of their rank and file employees and, if bonuses are added to their pay, this ratio jumps to 32 times.
  • The remuneration taken into account excluded long-term incentives such as share schemes.
  • Executives earning in foreign currencies such as dollars, pounds and euros earn nearly three times more than those paid in rands and, consequently, have much higher pay gap ratios.
  • These are some of the key findings of research conducted by Moneyweb and Profile Media, which analysed the remuneration packages of 966 executive directors of 329 listed companies.
  • These packages were then compared with the average salaries of rank and file employees in the respective sectors where the companies were plying their trade to calculate the pay gap ratio.  The comparisons were thus not with entry level wages.
  • The research revealed that the average executive director of a JSE-listed company earns a basic salary of R2.35 million, receives benefits of R1.85 million and receives a short-term bonus of around R2.07 million.  This gives a total annual package of R6.27 million.
  • The average guaranteed salary for CEOs and executive chairmen is around R6.3 million, while their bonuses average R2.8 million to increase the total annual package to just over R9 million.

RETRENCHMENTS

Major changes looming at Anglo American

  • Anglo American this past week unveiled a “radical restructuring”, which will see it cutting aggressively into both its staff and asset portfolio to tackle its heavy debt burden by reducing costs and removing marginal or unprofitable mines.
  • Anglo will slash its payroll to less than 50,000 in the next few years, from 135,000 employees this year.  The total reduction since 2013, when it had 162,000 people on its books, will be more than 110,000, with the majority leaving with assets sold off.
  • The number of Anglo’s mines will be down to between 20 and 25 from the 55 it has now; and its six divisions have been halved to diamonds, bulk commodities and industrial minerals including platinum.
  • Anglo CEO Mark Cutifani said it would not hesitate to suspend or shut mines that did not make a profit and promised to give more details in February, sending a clear message that Anglo did not expect a recovery in the global commodities markets anytime soon.
  • Anglo has put up for sale its domestic sales thermal coal mines in SA that supply Eskom, thermal coal mines in Australia, copper mines in South America and “a couple of other assets in SA”.
  • For the second time in its history, Anglo halted the payment of a final dividend and would not pay shareholders next year.
  • In the meantime the National Union for Mineworkers (NUM) has expressed shock at what it says is Anglo American’s decision to announce restructuring plans without consulting the union. But the United Association of SA’s (Uasa’s) Franz Stehring said the restructuring should have very little impact on South African operations.

Anglo American Platinum outlines survival strategy

  • Anglo American Platinum (Amplats) has warned that its headline earnings, which strip out impairments of R14bn, would be at least 20% or R157m lower than the previous year’s profit of R786m that had been dragged lower by a five-month wage strike action at its Rustenburg mines.
  • Contributing to falling earnings was a R900m payment for retrenchments, with 2,720 people, including 420 managers and senior staff, leaving Amplats during the year from Twickenham, Rustenburg, Union and other mines in the group.
  • Amplats forecasts that it will save R200m in labour costs next year.
  • The platinum producer has agreed to sell its Rustenburg mine to Sibanye Gold and has impaired the mine by R4.6bn.
  • It plans to dispose of Union next year.
  • It will exit its Pandora joint venture with Lonmin and the Bokoni venture with Atlatsa Resources.  The Bokoni mine is to shed 2,500 jobs by the end of this year as it shuts loss-making production.
  • Amplats has a 23% stake in Atlatsa and 49% of Bokoni.
  • Amplats put its Twickenham mine, which it is converting to a mechanised mine from a labour-intensive operation, into care and maintenance after suspending development work there, resulting in the loss of 550 jobs.
  • The development of a shaft at Tumela mine has been stopped.  The deep changes made at Amplats to become a more mechanised, profitable company are part of Anglo American’s broader restructuring strategy outlined this past week.
  • Anglo American owns an 80% stake in Amplats.

INDUSTRIAL ACTION AND DEMOSTRATIONS

Port Shepstone unprotected workers protest

  • SA Municipal Workers’ Union (Samwu) members engaged in unprotected protest action in the Port Shepstone CBD on Tuesday demanding that all employment processes be stopped as they were unhappy with how they were being handled.
  • Samwu demanded in a memorandum, handed to the mayor, that all employment and organogram processes should be halted until the next council and local labour forum sittings in 2016.
  • Municipal departments were closed as employees gathered in front of the Hibiscus Coast Municipality (HCM) headquarters demanding that the mayor and council attend to them.
  • Employees demanded that internal staff should be given first preference if there were municipality vacancies.

CHANGE OF OWNERSHIP

  • The Economic Freedom Fighters (EFF) has put brewer SABMiller on its list of targets ‘to ensure it implements minimum wages and give workers direct shares’.
  • On Tuesday, EFF spokesperson, Mbuyiseni Ndlozi, accused SABMiller and its subsidiary, Amalgamated Beverage Industries (ABI), of abusing workers ‘in the name of BEE’.
  • Daily Maverick reported earlier this week that SABMiller and ABI were being sued for over R6 billion in damages by 150 owner-drivers (ODs) whose contracts were axed.
  • It appears that the EFF’s main criticism is about the owner-driver scheme of which the EFF is now trying to take political advantage.
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