INDUSTRIAL ACTION

Limusa and Toyota

The Liberated Metalworkers Union of SA’s (Limusa’s) strike at Toyota Tsusho Africa in Durban, entered its fourth day last Monday.  The Cosatu affiliate, which was established in November 2014 following the expulsion of Numsa from the federation, said that the protected industrial action was as a result of the company’s refusal to grant the union organisational rights as required by the Labour Relations Act. Numsa is currently recognised at the facility.

WAGE AND OTHER LABOUR NEGOTIATIONS

Treasury pleads for reasonableness in public sector wage talks

The Medium-Term Budget Policy Statement (MTBPS) released on Wednesday provides for an overall increase of 7.3% a year to accommodate improvements in conditions of service.  “Many departments are already at risk of exceeding this limit, even assuming that personnel numbers do not increase,” according to the document.

Cosatu reacted that the government needed to stop blaming teachers, nurses, police officers, prison warders, doctors and municipal street cleaners for the wage bill.  “It must reduce the out-of-control salaries of state-owned enterprises’ chief executives, executives and political office-bearers including the directors-general,” the labour federation stated.

EMPLOYMENT AND LABOUR ECONOMIC MATTERS

Western Cape: 50,000 jobs on the line due to drought

During a presentation to Parliament on Wednesday‚ head of the Western Cape local government ministry, Graham Paulse, painted a grim picture of the agricultural sector.  In his report‚ he stated that about 50,000 jobs are at risk and that the layoffs could lead to social and humanitarian problems and, in addition, many might move to the Cape Town metro or other towns to find work.  “[The Impact on agriculture] is significant …in Ceres‚ 50% less onions have been planted and 50% less potatoes have been planted.  That is a direct result of the water shortages in that area with an estimated loss of about R40-million in wages to agri workers‚” Paulse indicated.  The factory in Lutzville that makes puree out of tomatoes has closed for the season.  Deciduous fruit farmers expect a 20% smaller crop and the smaller fruit will yield lower profits.  The wine industry‚ seen as one of the key economic drivers in the province‚ has also not been spared.

Samwu opposed to sale of government’s Telkom shares to bail out SAA

The SA Municipal Workers’ Union (Samwu) on Wednesday said that it was opposed to the plan by government to sell its Telkom shares, and was standing firm against the privatisation of state assets.  Finance Minister Malusi Gigaba confirmed in Parliament during his Medium-Term Budget Policy Statement (MTBPS) that government would dispose of a portion of the state’s Telkom shares to bankroll the embattled SA Airways (SAA).

Lonmin job reductions

Lonmin confirmed it had issued Section 189 notices commencing consultation regarding possible retrenchments. About 1,000 jobs, which includes contractors, are at risk. In terms of permanent employees 1,8% of the workforce or 446 employees are at risk. This will bring to over 8,000 the number of jobs reduced at Lonmin’s shafts in Rustenburg over the last two years.

Lily Mine to return to production

Deputy Mineral Resources Minister Godfrey Oliphant said on Monday that Lily Mine in Barberton was expected to return to production.  He also told the Bench Marks Foundation conference that the container where the bodies of three mine workers have been trapped since February last year was likely to be retrieved by as early as January.  Oliphant indicated that the Industrial Development Corporation (IDC) had agreed to inject the cash needed in order to return the mine to production.  This was after attempts by the mine’s business rescue practitioner to attract investors fell through.  The failure of the investment talks was a major setback for Lily workers and the surrounding community, which depend on the mine for an income.  The owner, Vantage Gold Field, went bankrupt after a collapse of the main supporting pillar at Lily.  It was forced to close operations in both Lily Mine and the nearby Barbrook Mine.  Several jobs could be preserved at Lily Mine and Barbrook, with the R310m from IDC

REMUNERATION AND EMPLOYEE BENEFITS

Real income shrank in September due to higher inflation

Real disposable income shrank for the first time in seven months on a year-on-year basis due to higher inflation in September 2017.  The monthly BankservAfrica Disposable Index indicated on Thursday that the average, real, seasonally adjusted banked salary declined by 1.3% to R13,964 in September.  In nominal terms, the take-home salary averaged at R14,255.  While these changes did not represent a complete reversal in the trend towards declining take-home pay levels, it has become evident that the lower growth rate in nominal and real terms was becoming the norm, the report said.  “The difficult economic conditions in the country at present impact firms and their ability to pay higher salaries.  The effective tax rate on gross salaries is also taking a toll,” BankservAfrica said.  According to the report, there was far less growth in the wage employment numbers of big employers than people with pensions.

Woolworths restructures executive bonuses

Woolworths Holdings’ decision to reduce the weighting of total shareholder return (TSR) in calculating long-term incentives for its executives has sparked fears that the executives are not expecting a recovery in the share price.  The retail group’s annual report reveals the TSR weighting used to measure performance conditions for the performance share plan (PSP) has been cut from 50% to 20% and return on capital employed increased to 30%.  This change will make the awarding of long-term bonuses less reliant on share price performance.  The share price has been on a steeply downward trajectory since late 2015.  The weighting of headline earnings per share remains at 50%.  The remuneration committee explained that the change to the weighting was meant to bring it “more in line with market practice among companies similar in size and industry”.  One analyst said it was disconcerting to make this sort of change when Woolworths was going through such challenging times.

Plans to establish National Health Insurance fund delayed

Treasury has delayed plans to set up a National Health Insurance (NHI) fund‚ saying it wants advice from the Davis tax committee on the feasibility of proposals to adjust the medical tax credits to finance it.  Former finance minister Pravin Gordhan said in the February budget policy statement that an NHI fund would be established to support priority health programmes‚ and that more details would be provided in the medium-term budget policy statement (MTBPS)‚ which was delivered by Finance Minister Malusi Gigaba on Wednesday.  At the time‚ Gordhan said it might be partially funded by a reduction in the tax credits provided to medical scheme members.  The Treasury now said more work needed to be done.  Although the Treasury did not directly say so‚ the data indicate that scrapping or sharply reducing the medical tax credits will hit people with lower incomes particularly hard‚ and potentially make their medical scheme cover unaffordable.

No salary increases for SAA middle managers

South African Airways (SAA) has confirmed that its middle-managers will not receive salary increases this year due to the financial constraints currently facing the embattled airliner.  Lower-level employees received a negotiated 6% increase. Executives agreed to reduce their salaries by 5% from October 2017.

LEGAL AND COMPLIANCE

Solidarity requests Labour Court to review Lonmin’s withdrawal of union’s recognition rights

Trade union Solidarity submitted an urgent application to the Labour Court requesting a ruling regarding the validity of platinum producer Lonmin’s withdrawal of Solidarity’s recognition rights.  The court was also requested to restore Solidarity’s rights pending the legal process.  Solidarity and the United Association of SA (Uasa) claim they are being “kicked out” by Lonmin’s executive management and that their rights to represent employees who work for the miner have been terminated.

President Zuma authorises SIU to investigate Public Service Sector Training Authority (PSETA

President Zuma has signed a proclamation allowing the Special Investigating Unit (SIU) to look into allegations of unlawful and irregular transactions at the Public Service Sector Education and Training Authority (PSETA).  In a statement on Tuesday, the Presidency said Zuma had signed the proclamation in terms of Section 2 of the SIU Act as well as the Special Tribunals Act. Zuma also signed a proclamation allowing the SIU to probe the Alfred Nzo municipality in the Eastern Cape for maladministration and intentional or negligent loss of public money.

COMMUNITY

Pan African Resources’ frustrated over disruption at Elikhulu

Tough comments from the CEO of Pan African Resources (PAR), Cobus Loots, about its difficulties with a small group disrupting the construction of its R1.7bn Elikhulu tailings project is an indication of the frustration the company is experiencing.  Loots says that about 30 people are blocking access to the project, assaulting and threatening workers at the site to back their demand to be given an office at the operation and for all procurement work to go through them.  This is not the first such standoff in the mining industry.  Recently, mining companies operating chrome and platinum mines in the Steelpoort valley spoke of fractured communities and small groups trying to grab opportunities to provide mines with goods, services and labour.  PAR was granted a court interdict stopping the group from blockading the site, forbidding threats and vandalism and inciting others to unlawful activities.  But, the interdict has yet to be acted on by the police.  Loots is clear that PAR will not back off or change its view of the great opportunities SA presents for the company, particularly at its Evander mining operation.

Protesters barricade Orpen gate road into Kruger National Park

Residents of Welverdien, outside Acornhoek in Mpumalanga, barricaded the Orpen Gate entrance road to the Kruger Park with stones and huge tree branches demanding employment from local businesses in the tourism sector.  Some of the residents claimed that they had written several letters to the local lodges and game reserves expressing concern about the lack of development in the village.

Lonmin community wants operations suspended on social failings

Platinum producer Lonmin should have its operations suspended in SA after years of failing to comply with its social and labour commitments, according to the community living around its mines.  The Bapo Ba Mogale community and the Mining Forum of SA, a civil society group, have written wrote to President Jacob Zuma and the Department of Mineral Resources (DMR) to request the suspension.  CEO Ben Magara met with the DMR and was given an “ultimatum” by Director General Thabo Mokoena to return to compliance, the two groups said in a statement on Wednesday.

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