Buffalo City and Samwu

  • The embattled Buffalo City Metro (BCM) lurched from one crisis to another this week when hundreds of its employees downed tools and took to the streets in protest over promotions, back payments and outsourcing services.
  • The strike caught the city management by surprise as there was currently no dispute declared between workers affiliated to the SA Municipal Workers’ Union (Samwu) and BCM.
  • The metro is still reeling from a water crisis that saw hundreds of thousands of residents go without water for two days after problems at the Umzonyana treatment works.
  • Commuters faced traffic jams in the East London CBD on Thursday as traffic came to a standstill when workers blockaded Oxford Street.  They stoned the municipal finance department building, dumped garbage and set tyres ablaze on the streets.
  • Workers said they would not stop striking until all their demands were met.


Lily Mine job security

  • Lily Mine management informed the 650 workers of the mine workers that they would not receive their remuneration on the usual pay-day in April, but “possibly” only next Friday (normal pay day is the 25th of the month).
  • It has been close to three months since gold production at Lily Mine was stopped following the tragic accident on February 5 when three workers inside a container office fell into a massive sinkhole and were buried under rubble.
  • An application was made by the neighbouring Barbrook Mine to the Industrial Development Corporation (IDC) for the further development of Lily Mine, in order to increase gold production and provide an additional 200 jobs at the mine. Barbrook is part of Vantage Goldfields, the same group which owns Lily Mine.

Anheuser-Busch InBev (AB InBev) commitments in the SAB Miller merger

  • AB InBev has committed R1 billion in a deal to support farmers and other suppliers in the agricultural sector, which could create more than 2 000 jobs.
  • This was one of the key issues outlined by the Minister of Economic Development, Ebrahim Patel, in Parliament on Thursday.
  • Patel said the commitment by AB InBev was the largest financial commitment yet by a company in merger proceedings. It was among the conditions he imposed on the merger of AB InBev and SABMiller.
  • He said R610 million of this would be used to support the development of 800 new emerging farmers and 20 new commercial farmers to produce more local barley, hops, maize and malt.
  • This was intended to create at least 2 600 new jobs in agriculture.
  • “The company is looking to turn South Africa from a net importer of hops from other countries, to a net exporter of hops and value-added malt.
  • “In a groundbreaking commitment on jobs, the company agreed that it would not retrench any worker involuntarily as a result of the merger, now, or at any point in future.”
  • Patel added that in addition to the commitment, the company also agreed to maintain their workforce in the beer and cider divisions, roughly about 5 900 permanent employees, at current levels for the next five years .
  • He said other terms dealt with economic empowerment, keeping the firm’s headquarters in Johannesburg, access for small brewers to fridges and cooler space, and promoting alcohol-free and low-alcohol products in the South African market.
  • “An Implementation Board will monitor the progress with the R1bn commitment, with equal representation from the company and government.
  • “This is the most comprehensive agreement of its type yet placed before the competition authorities for consideration. We are still in dispute with Coca-Cola and its partners, SAB Miller, on the combination of three existing soft-drink bottlers.”
  • He said while government had made progress with some areas of localisation and also keeping at least 20% of the equity of Appletiser in South African hands, there were still serious challenges.
  • “Government is concerned at two critical matters: very substantial job losses that may result from the transaction over the next five years, and practices by Coca-Cola that close the market to smaller soft-drink producers through refusing access to fridge or cooler space to rival brands.
  • “These competition interventions are not isolated actions, but are part of a coherent strategy by government to ensure a better fit between the legitimate interests of shareholders in mergers and acquisitions, and the public interest on jobs, industrialisation, empowerment and small business development.”
  • Patel said the competition authorities had widened the scope of their examination of potential anti-competitive structures and conduct through the use of market inquiries.

Fawu and SAB Miller

  • The Food and Allied Workers Union (Fawu) is hoping to secure the same sort of treatment for its members as the 1,700 SABMiller managers when the merger with Anheuser Busch InBev (AB InBev) is finalised.
  • The union’s Katishi Masemola wants Fawu members, who are participants in SABMiller’s broad-based black economic empowerment scheme SAB Zenzele, to enjoy the same accelerated treatment as management.
  • He met AB InBev executives to persuade them to bring forward the maturity date and to launch a second BBBE economic empowerment scheme.
  • Another issue that Masemola is keen to resolve is securing an assurance that there would be no deterioration in the conditions attached to jobs post-merger.  AB InBev has already committed to security of jobs.
  • The top brass at SABMiller are set to score a $2.1bn windfall from the accelerated exercise of their outstanding share options once the deal is clinched.

Exxaro Resources cost cutting and possible retrenchments

  • Citing low commodity prices and a drop in equity investment, diversified miner Exxaro Resources may cut as many as 565 jobs from its coal and ferroalloy operations. As part of cost-cutting it also sold its aircraft amongst which were a helicopter and a Boeing 737.
  • The jobs are likely to be cut at Exxaro Resources, Exxaro Coal, Exxaro Coal Mpumalanga and Exxaro FerroAlloys.
  • Exxaro said in March it would save labour costs of R250m a year after 464 employees took voluntary severance packages at a cost of R408m in 2015.

Compensation Fund action plan

  • The Compensation Fund has embarked on an action plan to fix its problems, with “significant” progress having been made over the past year in the processing of claims.
  • This is according to the fund’s commissioner, Vuyo Mafata, speaking in Parliament on Wednesday.
  • The action plan was developed in June last year with implementation starting the following month.
  • Capacity in financial management has been strengthened, and the claims processing system was under way.  A skills audit has also been conducted.
  • According to Mafata, 74% of the plan’s short term goals had been achieved by the end of March, with the next milestones being the end of June and the end of April 2017.
  • However, aggrieved doctors and hospitals who complain about the non-payment of their claims will have to wait to see if there is concrete progress before applauding the new initiative.


Anglo’s remuneration policy

  • Anglo American has promised to discuss its remuneration policy with major shareholders over the next few months and put a revised policy to the vote at next year’s annual general meeting.
  • This follows 41.59% of votes casted at the AGM against the company’s proposals on executive remuneration, and one-third of votes were withheld.
  • The main issue seems to be CEO Mark Cutifani’s remuneration which is pitched at £3.4m for the year, at the same time as Anglo American has suspended payment of dividends.
  • Leading up to the meeting, ShareSoc in London, which represents smaller shareholders, had urged a rejection of the group’s proposals on pay, saying the package paid to CEO Mark Cutifani had not been reduced to reflect the slimming down of the company’s activities.
  • Last year, Anglo’s shares were the worst performing in the FTSE-100, but this year they were the best performing, as commodities prices have rallied since January.
  • Chairman Sir John Parker told the AGM that as a result of Anglo’s existing salary policy, Mr Cutifani’s variable pay was only one-fifth of the maximum achievable. Also, his salary was frozen, as it was for all senior management.


Vavi and the DA

  • Democratic Alliance (DA) leader Mmusi Maimane has been courting Zwelinzima Vavi, former general secretary of labour federation Cosatu, to form a coalition government at the Nelson Mandela Metro should the ANC fails to win an outright majority.
  • This comes as the official opposition party intensifies its bid to wrest Nelson Mandela Bay metro from the ANC in the upcoming local government elections.
  • Maimane and Vavi apparently met at a Johannesburg hotel on 1 February to discuss forming a coalition government in the metro should the ANC fail to win an outright majority there.
  • National Union of Metalworkers of SA (Numsa) general secretary Irvin Jim was invited but did not pitch.
  • Jim commented on Saturday that he had no knowledge of the meeting.

SAMWU rejects association with new labour federation

  • The SA Municipal Workers’ Union (Samwu) rejected reports linking it to a yet-to-be established federation of trade unions, saying such an association would be an “ill-conceived formation”.
  • The union instead reaffirmed its affiliation, and pledged allegiance, to the Congress of South African Trade Unions (Cosatu).
  • A new trade union federation led by expelled Cosatu general secretary Zwelinzima Vavi would, according to recent reports, be launched in Tembisa, Johannesburg, on Workers Day, 1 May.
  • Samwu was named as one of unions set to join the new federation.
  • Samwu’s general secretary, Simon Mathe, rejected the claim saying:  “Samwu has congress resolutions which have confirmed, affirmed and reaffirmed our affiliation to Cosatu.  Ours is a historical relationship with Cosatu politically and ideologically”.
  • According to reports, the launch of the new federation would be preceded by a workers’ summit to be held in Boksburg on 30 April, where it was expected that delegates representing 40 unions would come up with the name, colours and constitution of the federation.

NUMSA’s national bargaining council

The following flowed from the Numsa national bargaining council that was held this week in preparation for the forthcoming wage negotiations it will engage in:


  • Numsa president Andrew Chirwa lashed out at Numsa’s former comrades in labour federation Cosatu and the SA Communist Party stating that they wanted to see Numsa “fractured and dead as in like yesterday”.
  • Numsa, which was the biggest union in Cosatu at the time, with more than 340 000 members, was unhappy with the ANC’s neo-liberal policies and called, among other things, for the banning of labour brokers, scrapping of etolls and implementation of a national minimum wage.
  • Also speaking at the meeting, general secretary, Irvin Jim, said battle lines had already been drawn between the working class and “forces” determined to exploit it in the forthcoming wage negotiations.
  • He warned that should employers hid behind the global economic crisis to refuse workers better wages and work conditions, the union would give them a “bitter pill” to swallow.
  • The union said it was greatly concerned about the current “serious levels” of de-industrialisation in the sector, with major companies closing shop, resulting in unprecedented job losses.


MEIBC financial problems

  • Metal and Engineering Industries Bargaining Council (MEIBC) general secretary Thulani Mthiyane has dismissed claims by National Employers’ Association of South Africa (Neasa) CEO Gerhard Papenfus that the MEIBC was responsible for setting in motion a “devastating” process of deindustrialisation, contributing to unemployment and economic and social instability.
  • This accusation followed in the wake of the MEIBC earlier warning of closure should an 18% levy increase fail to materialise, with its financial woes exacerbated by a four-month delay last year in the renewal of the administration and expenses levy and dispute resolution levy agreement.
  • The council had been facing disruption in its dispute resolution service, impacting its service provision to some 300 000 employees and over 10 000 employers as it was unable to pay service providers amid financial difficulties emerging from a number of challenges, the council said at the time.
  • The MEIBC had to make use of reserves to continue servicing the industry after the Labour Minister failed to extend the agreements for the levies during the first four months in 2015, in addition to not receiving any levy increase in five years.
  • Papenfus, however, said the council only had itself to blame for its demise while it was responsible for causing the steel industry “to be 40% more expensive than the second most expensive industry governed by any other bargaining council dispensation”, through its pursuit of unaffordable wage agreements, that were, in part, enforced on employers that had chosen not to be a part of it. “This has led to hundreds of thousands of job losses – 90 000 since 2008, of which 40 000 was lost in 2015 alone,”
  • Papenfus commented in a statement earlier this week in response to media reports of the MEIBC’s imminent closure.
  • “The MEIBC parties, excluding Neasa, have signed a number of agreements that seeks to grow the industry [and] sustain current jobs while creating new jobs. Some employers in our industry are accusing agents of the council of preventing them from employing job seekers who are prepared to work for wages that are 70% below the minimum of this industry. These are people who are contributing to social instability,” Mthiyane countered.
  • He assured that the MEIBC collective agreements were “always supported” by all six industry trade unions and 23 Steel and Engineering Industries Federation of Southern Africa associations, adding that the majority of the steel companies were “shelling a lot of jobs” and that it had “nothing to do” with the MEIBC agreements and their extension to nonparties. Further, the Labour Relations Act allowed for the extension of bargaining council agreements by the Labour Minister to nonparties.
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