WAGE NEGOTIATIONS

Water Boards agreement

  • The SA Municipal Workers’ Union (Samwu) has concluded salary negotiations with Amatole Water in the Eastern Cape, Bloem Water in the Free State and water supply specialists, Water Solutions Southern Africa (WSSA).
  • All three provide critical supply water and sanitation services to municipalities, industries and mines around the country.
  • Negotiations with other water boards are continuing.  (In this context, it ought to be noted that the Association of Mineworkers’ and Construction Union (Amcu), which is traditionally associated with mining, has secured majority status at the Rand Water Board, in keeping with this recent strategy decision to extend its scope beyond mining.)
  • In terms of the agreement for employees at Amatole Water, a salary increase of R1,500 and a housing allowance of R1,450 was agreed. Employees will also receive allowances which will include out-of-town work, cellphone, transport and death cover benefits.
  • At Bloem Water, an across-the-board salary increase of 7.5% and a R1,450 housing allowance were agreed upon.
  • The new agreement at WSSA included a 13th cheque and a 7% across-the-board salary increase in the first year of the agreement, with a Consumer Price Inflation (CPI) plus 1% being factored in for the remainder of the agreement.

Gold Sector Wage Negotiations

  • Now about to enter their fifth week, these negotiations are still in a tough stage.
  • It would appear that that the two major unions represented at the Chamber of Mines faciliated talks, Amcu and the National Union of Mineworkers (Num), are both adamant to achieve the highest possible increase for those at the lowest rung of the employment ladder, even if that means retrenchments as a consequence.
  • It is also becoming increasingly apparent that the unions are not particularly interested in the social compact proposed by the five gold producers who are represented by the Chamber and instead want to continue the talks to continue in the traditional fashion (i.e., negotiating wage increases rather than the more complex social compact).
  • While this is somewhat worrying, the upside is that all parties are still engaging and Amcu, in particular, has made some positive pronouncements during the week when they flagged the “positive progress” that was being made. They also noted that they are participating “in the negotiations to settle and not to strike”.
  • Similarly the employers remain consistent in their core message around the need to maintain unity.

COMMUNITIES

Burgersfort (Limpopo)

  • Minister of Mineral Resources, Ngoako Ramatlhodi, struggled to stay in control of a heated community meeting over mining jobs in Burgersfort, Limpopo, his home province on Tuesday.
  • Residents of villages around the Sekhukhune district who gathered at the Greater Tubatse municipal offices, warned that there would be bloodshed should government fail to secure mining jobs for locals.
  • Among residents present were the people of Ga-Mampuru village near Steelpoort, where protests have affected operations at surrounding mines in the past two weeks.
  • Following meetings with mines in the area (Two Rivers Platinum, Dwarsrivier Chrome, Glencore Alloys, Booysendal Platinum Mine, Samancor and Sylvania) Ramatlhodi announced that there would be task teams comprising community representatives and officials from the Department of Mineral Resources (DMR), of which one would focus on unemployment, while the other would tackle other problems in the area.
  • for 1,236 available positions.
  • The minister also assured that the service of labour brokering would be abolished in the area.
  • Northam Platinum’s Booysendal mine has returned to normal operations after disruptions caused by community protests. (This is the only mine that made announcements in this regard).

RETRENCHMENTS

Retrenchments overview

  • While Lonmin’s news this week that it is likely to cut thousands of jobs rocked the mining industry, news of retrenchments have become alarmingly commonplace in the past few months.
  • Since we started this newsletter in April, hardly a week has gone by when we haven’t flagged jobs cuts in the mining and other industries.
  • Below is an overview of just some of the retrenchments we reported on:
  • Amplats is to retrench nearly 500 employees as part of a 2013 restructuring plan, which initially identified 1,248 posts for retrenchment. Since then the company has identified permanent positions for the remaining 774.
  • AngloAmerican, on the other hand, announced plans to cut between 5% and 20% of its global 150,000 staff compliment.
  • Vertically integrated steel and vanadium slag producer Evraz Highveld Steel & Vanadium has filed for business rescue, while its subsidiary Mapochs Mine will also enter business rescue proceedings.
  • South African Airways intends retrenching 724 of its staff, including personnel from its technical division and low-cost airline Mango.
  • The Helam mine in Swartruggens (North West), which is owned by Petra Diamonds, retrenched.
  • The Post Office is to cut its work force by 22%, either by offers of early retirement, redeployment or forced retrenchments, as part of its turnaround plan.
  • Impala Platinum (Implats) would like to close five unprofitable mines of its 14 mines at the Rustenburg complex, despite expansion plans that would see it open two new shafts.
  • Telkom wants to shed some 7,800 jobs in order to bring its workforce below 10,000, though just how it intends retrenching remains to be seen.
  • Glencore subsidiary Optimum Coal Mines is placing some of its operations on care and maintenance, which will result in the retrenchment of between 600 and 700 employees.
  • Eskom was forced to halt its voluntary redundancy plans when the coveted skilled staff comprised the majority of those who applied.

Lonmin to shed 6,000 jobs

  • Battered by low platinum prices, Lonmin announced it was planning to close or mothball several of its mine shafts that will ultimately put 6,000 jobs at risk.
  • The company indicated that it would shut its Hossy and Newman shafts, which would also decrease annual production by about 100,000 platinum ounces.
  • It further stated that it would put a number of other shafts on care and maintenance, some of which are currently managed by contractors.
  • Lonmin said the planned closures would likely affect a total of 6,000 employees including contractors.
  • Lonmin currently employs about 37,000 people, including contractors.
  • The announcement shook the platinum sector and the entire mining industry, with the statement immediately wiping more off the share price, which is already down 57% since 2015 began.
  • It comes just weeks after the release of the long-awaited Marikana report that documented the events that took place at Lonmin in August 2012 and which resulted in the deaths of tens of its employees in a killing by members of the South African Police Service.
  • Amcu, which is the majority union at the platinum company, described the announcement as another form of slaughter.
  • “Plans to cut jobs is another massacre on its own,” said the union’s president Joseph Mathunjwa.
  • Num, which was unseated by Amcu two years ago as the majority union, has also vowed to fight any retrenchments.
  • However like all planned restructuring, it remains to be seen whether it will be 6,000 jobs or less that will eventually be lost.
  • Earlier this year we reported that a possible 3,500 jobs were at risk. The news now that twice that number could be vulnerable may well be a scare tactic by the company. However even if the 6,000 is whittled down to 3,500, it is still a very significant number.

Anglo American

  • Anglo American posted an interim loss of more than $3bn, with impairments of $3.5bn taken against a number of assets, in the main due to weak commodity prices. Consequently, it will cut more than 50,000 jobs in the coming years.
  • Anglo’s employment levels have dropped globally from 160,000 people a few years ago to 152,000.
  • Anglo indicated that within the next three years the number of employees would fall below 100,000.
  • Anglo’s number of global assets would fall to 40 by 2017 from 55 of which 13 assets have already been disposed of.

Kumba

  • Kumba Iron Ore is planning to reduce 1,772 jobs as low iron-ore prices cut a swathe through the industry.
  • Out of a previous compliment of 572, only 221 permanent and fixed-term employees remain at head office, with the 351 head office jobs cut by the Anglo American group company in the first quarter representing a 61% reduction and a saving of R200-million a year.
  • A 31% reduction of permanent and fixed-term employees is under consultation at Kumba’s Sishen and Kolomela iron-ore mines in the Northern Cape as part of a Section 189A legal process, which will cut permanent and fixed-term employees by 261 people, reducing the employee complement from 846 to 585.
  • Kumba’s closure of its Thabazimbi mine, in Limpopo, will cut permanent employees by 800 and fixed-term employees by 360, taking the total job cuts carried out so far to 1,772.

Highveld Steel and Vanadium

  • After last week confirming that it had temporarily ceased steel production at its steelworks in Middelburg (Mpumalanga,) Evraz Highveld Steel and Vanadium announced this past week that it had issued a proposed restructuring notice (i.e. Section 189 Notice) that could see the company potentially cutting half of its workforce.
  • SA’s second-largest steel producer, which initiated voluntary business rescue proceedings in April, will now enter a 60-day CCMA-facilitated consultation process with employees and trade unions.
  • Evraz plans to restructure to a “curtailed operating mode”, which would allow start-up on a limited basis when market conditions improve and adequate funding is obtained.
  • Evraz currently employs 2,242 employees.

ArcelorMittal SA

  • Steel maker ArcelorMittal SA announced that it was putting its Vereeniging long steel works into “emergency care” until the end of August 2015, underlining the poor state of the industry.
  • The company indicated that it had already commenced consulted with about 1,200 affected employees about the decision.
  • The company, part of the global ArcelorMittal group, said that if it was “not sensible” for the plant to continue operations it would “follow a process of closing down parts of it or closing the entire operation down”.
  • Cheap, state-subsidised imports from China have badly dented its business and ArcelorMittal SA has reported losses for the past five years.
  • ArcelorMittal said it had been slowing down output at the Vereeniging facility for some time now, and staff were already working on “short-time”.
  • The company indicated that the timing of any closures at Vereeniging, which would follow a section 189 notice process, would depend on the state’s response to the sector’s application for tariffs of at least 10%, or harsher anti-dumping duties, on Chinese imports.

South African Airways

  • The SAA restructuring process consultations commenced in April 2015 and is apparently going to be extended by a further 30 days.
  • Although nine meetings have already taken place, unions (particularly Solidarity) is not satisfied with the level of disclosure that would indicate why the retrenchments are justified.
  • Privately, the Num insists they are making significant inroads into the parastatal.
  • However Numsa also insists it is picking up a significant number of new union members at the airline.
  • Such competition between unions does not bode well for the restructuring process.

UNION DEVELOPMENTS

New Union Federation?

  • The Numsa leadership announced this week that it is ready to begin the process of forming a new labour federation, though a possible formation is not imminent.
  • The union said it will facilitate a so-called national workers summit that will take place in October to discuss the future of the labour movement.
  • They say that all unions and federations are welcome to attend, including rival Cosatu-affiliated unions, other federations, and independent unions, to discuss labour organisation challenges, such as the low rate of unionised workers in the private sector, and whether a new labour federation should be formed.
  • Numsa insists that October imbizo comes only after an exhaustive process through which it and other Cosatu-affiliated unions attempted to ‘save’ and reclaim Cosatu as a genuinely worker-oriented federation.
  • The main aim of the October summit is to discuss the formation of a new and independent, democratic, worker-controlled, militant, anti-imperialist trade union federation.

Ceppwawu

  • Chemical Energy Paper Printing Wood and Allied Workers Union’s (Ceppwawu’s) R3.8bn Investment Company is at the centre of a court battle between warring union leaders for control of the entity.
  • Union investment companies — which ironically tend to be multibillion-rand entities — have become a major factor dividing unions affiliated to labour federation Cosatu.
  • Ceppwawu is no exception, with its lucrative investment portfolio reportedly including shares in Aspen, Sasol, Nampak and Transpaco.
  • It emerged this week that Ceppwawu Investments CEO Derek Thomas, acting on behalf of the company, submitted an affidavit supporting a court bid by deputy general secretary Chief Seatlholo to remove the union’s general secretary, Simon Mofokeng, as a director of Ceppwawu Investments and as a trustee of the Ceppwawu Development Trust.
  • The application by Seatlholo seeks to remove other officials, including its second deputy president, Eunice Dlodlo, and its president, Thamsanqa Mhlongo.
  • Mofokeng and Seatlholo belong to separate factions in the union and are also aligned to different factions in the broader Cosatu infighting.
  • Ceppwawu is in a perilous state after it consistently failed to hold leadership meetings and even a national elective congress.  The term of the current leadership expired in September last year.
  • There is also an attempt by the registrar of labour to place the union under administration, since it has failed since 2010 to submit audited financial statements.

Department of Labour

  • Meanwhile the Labour Department has stripped its registrar, Johan Crouse, of his title with immediate effect on the grounds of gross insubordination.
  • He is to be assigned new responsibilities in the department.
  • This comes after Crouse lodged an application in the Labour Court to place the Chemical Energy Paper Printing Wood and Allied Workers’ Union (Ceppwawu) under administration.

CWU

  • Communication Workers Union (CWU) has pulled out of the group of Cosatu affiliates calling itself the “nine plus unions”, or rebel unions, on the basis that it does not want to be “entrenching division” in the 30-year-old federation.
  • The decision was taken at the CWU’s special national executive committee meeting, which was held a day before Cosatu’s recent special national congress (on July 13 and 14).
  • CWU general secretary Aubrey Tshabalala said:  “It was the fact that our unity with the nine unions was on the basis that we were all calling for a special national congress but also for the reinstatement of Numsa and the GS comrade [Zwelinzima] Vavi.”
  • He said the union also wanted unity and cohesion within Cosatu, which has been marred by infighting for almost three years.
  • The CWU has always been a strong supporter of Vavi, and has come to his defence on many occasions.  Vavi, in turn, has thrown his support behind the communication workers, especially during the recent MTN strike.
  • However, CWU members are said to be split on their support.  Tshabalala on Wednesday said the union was still in support of Vavi and expelled metalworkers’ union Numsa being reinstated into trade union federation Cosatu.
  • It is undoubtedly a case of the temperatures outside of Cosatu getting too cold for most to bear? We therefore could expect that some of the other unions may also contemplate a full return.
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