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Tuesday, 08 January 2019 13:59

The Star reports that Labour Minister Mildred Oliphant has issued regulations exempting employers who are unable to pay the national minimum wage that was passed by the National Assembly last year.

The regulations, which came into effect on January 1, are contained in a notice published in a government gazette in line with the new legislation.

In the notice, Oliphant said an employer may apply to a delegated authority who is a director-general for exemption from paying the minimum wage.

“An exemption may be granted if the delegated authority is satisfied that the employer cannot pay the minimum wage and if every employee representative trade union representing one or more of the affected workers has been consulted or, if there is no such trade union, the affected workers have been meaningfully consulted” Oliphant said.

She said the director-general may grant exemptions only from the date of application and specifying the period for which it was granted, which may not exceed 12 months. The employer would be required to pay no less than 90% of the national minimum wage.

Oliphant also said the exemption may be considered if the employer complied with statutory payments, which may not be limited to the Unemployment Insurance Fund, Compensation Fund and any applicable bargaining council agreement.

However, she said the director-general may withdraw the exemption if satisfied that the employer provided false or incorrect information when applying for the exemption, or if the employer’s financial position improved.

“Any affected person may apply to the delegated authority for the withdrawal of the exemption notice by lodging an application on the national minimum wage exemption system in the required form.”

The regulations state that such an online database should be established.

The director-general is expected to publish an annual report detailing the number of applications made, granted and refused; the number of employers and workers subject to the exemption; the withdrawal of exemptions and sectors affected.

Meanwhile, Oliphant has also issued guidelines on balloting for strikes in line with the recent amendment to the Labour Relations Act.

The guidelines say a member of a union organisation may not be disciplined or have their membership terminated for refusing to participate in strike action.

It also says there is no requirement for a union to obtain the consent of an employer to hold a ballot unless stipulated in a collective agreement.

“Reasonable notice must be given to members of the holding of a ballot.”

The guidelines also say there is no requirement for a union to permit employer observers at a ballot or employ independent scrutineers to conduct or observe the ballot.

The director-general is expected to issue a directive to those unions whose constitution does not provide for a secret ballot before embarking on strike action.

The original of this report by Mayibongwe Maqhina appeared on page 7 of The Star of 8 January 2019

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Tuesday, 08 January 2019 12:26

The Mercury reports that the Democratic Nursing Organisation of South Africa (Denosa) has threatened to take the KwaZulu-Natal health department to court, for not permanently employing about 190 nurses after four years of training, including community service.

Mandla Shabangu, Denosa provincial secretary, said this year the department has not hired a single fully qualified nurse. He said this was despite the dire shortage of nurses in health facilities around the province.

“Denosa in KZN will take the Provincial Department of Health to court over its failure to absorb nurses, who have completed their year of community service, into the full-time employment of the department as per the agreement,” he said.

Shabangu said, normally, trainee nurses enter into an agreement with the department that stipulates that they will be employed once the training is completed.

“The agreement states that after four years of training, which includes one year of community service, the nurses will be employed by the department for a time equal to the time they spent training,” he said.

However, Shabangu said the department informed the nurses at the last minute that they were not going to be employed. He added that the union has approached the department for answers.

“The department should make its intentions clear on whether or not it intends to employ the nurses, which should have been done on January 1,” he said.

An alternative to employing the nurses, said Shabangu, was for the department to release the nurses from their obligation to pay the department for funding their studies.

“If the department chooses not to employ them, this will forfeit the service of hundreds of nurses,” Shabangu said.

He said any amendment, to the original agreement concluded with the nurses, should be stated in writing. The organisation has given the department until January 11 to make its intention known. “We will be left with no option but to approach the court of law,” Shabangu said.

KZN Department of Health spokesperson Ncumisa Mafunda said the department has not employed the nurses because they are identifying vacant and funded posts.

She said another issue, regarding nursing posts, was that there were nurses, who had done the bridging course from staff nurse to professional nurse, who also needed posts.

“The department is looking to identify (posts) for both these groups,” Mafunda said.

The original of this report by Karen Singh appeared in The Mercury of 8 January 2019

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Monday, 07 January 2019 07:14

City Press reports that a large part of the South African economy will be exempted from the new national minimum wage (NMW), which came into effect this week. Final regulations on exemption from the NMW were released quietly on December 19, cutting the wage floor from the muchpublicised R20 an hour to R18 an hour for qualifying companies.

The threshold for qualifying is set too low, according to organised labour.

At the same time, organised business has criticised the limited nature of the exemption as being “completely random” and useless to employers who still cannot afford to pay workers R18 an hour.

There is no further exemption from the NMW other than the 10% drop from R20 to R18.

A NMW of R18 leads to a monthly wage of R3 096 instead of R3 440, based on a 40-hour week.

The regulations create a series of tests companies can use to qualify for exemption from the NMW, based on profitability and solvency.

City Press calculations indicate large parts of the formal economy qualify for the exemption, based on the only available national survey of company financials – Stats SA’s annual financial statistics. Based on these numbers, large parts of the manufacturing and construction industries qualify for exemption.

Separate tests for households and nonprofit organisations will allow them to pay a lower NMW to domestic workers and nonprofit workers.

The system allows for farm workers to be paid R16.20 an hour instead of the normal R18 in that sector.

Likewise, the normal NMW for domestic workers of R15 can be lowered to R13.50 if a household is exempted.

When is R20 too much?

The exemption rules allow a lower NMW on six bases. As a starting point, any employer operating at a loss is automatically exempt from the R20 NMW.

More importantly, even companies making a profit can be exempted if their return on assets – according to a prescribed formula – falls under 6% and they also pass a series of tests of their financial strength.

This 6% level was a major bone of contention when the exemption rules were negotiated at the National Economic Development and Labour Council (Nedlac) last year.

The labour department initially wanted to make it 8% in line with business’ demands and labour argued for at most 5%. The final regulations settled on 6%.

Incidentally, this is the average return on assets in the economy as a whole, according to the annual financial statistics for 2017 – the latest available. This shows that much of the economy would be eligible for exemption.

The difference between 8% and 6% is, however, enormous. If the threshold had been 8%, the infamously low-wage retail sector would have qualified for exemption, according to City Press’ analysis of the annual financial statistics.

With 6% and the further tests prescribed by the regulations, 59 of the 258 sectors covered by the annual financial statistics qualify for exemption based only on the lowest three hurdles for exemption.

That means they get exempted without having to show the actual effect that the wage increase would have on them. This includes much of the manufacturing sector and the construction industry.

Companies with returns on assets higher than 6% can still get exempted if they can prove that the new higher wage would cause them to suffer losses.

The extent of this situation cannot be determined without access to company payroll data.

These are high-level aggregated statistics and, within each sector, there would necessarily be companies that are doing better and companies that are doing worse.

The overall figures, however, show how low the bar has been set for exemption from the NMW.

‘Arbitrary’

Despite evidently covering a large part of the economy, the NMW exemption rules are nowhere near what organised business wanted.

Kaizer Moyane, the business convener at Nedlac and social policy chair at Business Unity SA, said the exemption is “arbitrary” and fails to take into account real affordability.

If you accept that an employer cannot pay R20, but then say it must pay R18 without assessing if that is more feasible, the whole exemption system becomes meaningless, he told City Press.

“Even if you do exempt a large part of the economy, you still have the affordability problem.”

Business last met with the department on December 7 to express concerns about the then draft of the regulations, he said.

Their objections were evidently ignored as the final regulation still contains the main prescriptions about which business has objected.

The exemption system requires applicant employers to have two years of financial statements. This means startup companies are automatically refused exemption, said Moyane.

Also, an exemption process based on past financial performance would be unable to take into account future events, such as the end of a contract, he said.

“We said we want a simplified process that works for small businesses.”

Another gripe is that the NMW regulations do not allow mass applications by employer groups on behalf of all their members.

Instead, the regulations permit employer groups to make applications for their members – but only one at a time.

“That simply makes the employer group an administrator,” said Moyane.

‘Gigantic loophole’

At the negotiations on the exemption system last year, union federation Cosatu called the proposed test for exemption at 8% of returns on assets a “gigantic loophole for the entire NMW system”.

It claimed that “most companies” would be exempted if that test stayed in place.

In a submission at the time, the labour federation argued that this number should be lower than 5%.

The SA Clothing and Textile Workers’ Union’s industrial policy officer Ettiene Vlok told City Press this week that 6% was still too high and that many “undeserving companies” would get exempted.

It was not clear why the department chose 6%, he said. “Our concern is that giving exemptions is already unique and contrary to what the International Labour Organisation recommends.

“If you are going to have exemptions, they do not have to be generous,” Vlok said.

As things stood, an “enormous” number of companies would likely qualify for exemption, he said.

Another problem for labour is that the regulations allow third parties, such as employer federations, to apply for exemptions on behalf of their members.

This would most likely lead to the creation of groups that “fill in exemption forms from morning to night”.

“This is not theoretical – this is what has actually happened in the past,” said Vlok, referring to exemption processes for other centrally determined wages such as South Africa’s sectoral determinations.

Although organised business has complained about limiting the exemption to paying R18 instead of R20, Vlok said that there had to be a limit.

“It is meant to be a national minimum wage and the R20 has already been eroded by inflation since it was first proposed,” he said.

Cosatu would monitor the scale of exemptions this year and take the issue up again when the new NMW commission deliberates on the first year of the wage floor, he said.

The original of this report by Dewald van Rensburg appeared on page 15 of City Press of 6 January 2019

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Monday, 07 January 2019 04:30

BL PREMIUM reports that workers affiliated to the Association of Mineworkers and Construction Union (Amcu) remain on strike at Sibanye-Stillwater's South African gold mines as a process to verify the membership of four unions at the company is still underway.

On Thursday Amcu and Sibanye embarked on a process at the Commission for Conciliation, Mediation and Arbitration (CCMA) but the dispute remains unresolved.

Joseph Mathunjwa, president of Amcu, said this week that talks at the CCMA were adjourned due to a disagreement between the two parties. "The company came with their senior counsel and tried to interpret the judgment to their advantage, to which we disagreed. The commissioner has to write to the judge to clarify certain sections of the judgment," Mathunjwa said.

This is in reference to a ruling in late December. Sibanye had sought to have the strike by Amcu declared unprotected and illegal after it said 51% of unionised workers - represented by the National Union of Mineworkers, Solidarity and UASA - had accepted the wage offer, enabling it to extend the offer to all workers. But a December 21 Labour Court judgment ruled in favour of Amcu and ordered the CCMA to facilitate a union membership verification process and report back to the court by tomorrow.

"With the first day back at work being January 3 2019, employees at the gold operations have started to report for work," James Wellsted, head of investor relations at Sibanye, said this week.

The strike by almost 15,000 Amcu workers has "affected the gold operations to varying extents", said Wellsted. He said an update would be released "in due course".

Amcu demands a basic monthly salary of R12,500 and an increase of R1,000 a month every year for the next three years. The other unions agreed to a R700 monthly increase for the first two years of the wage agreement and an R825 a month increase in the third year.

The original of this report by Ntando Thukwana appeared on page 13 of The Sunday Times of 6 January 2019

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Wednesday, 19 December 2018 11:43

The Star reports that trade unions have called on the Public Investment Corporation (PIC) to rescue South Africa’s largest trading group, Edcon, from its financial woes to avoid a jobs bloodbath.

This comes after a report emerged at the weekend detailing how the retail giant was on the brink of collapse.

Cosatu parliamentary co-ordinator Matthew Parks yesterday warned that the massive job losses would not only affect Edcon.

“We want no job losses. We are saying there is space to make a plan. This is not just job losses at Edcon but also to factories that supply them. We support the engagements between the management and stakeholders to find a way out of this crisis.

“We think the PIC can and it should. This must obviously be done in a sustainable way.

“The PIC cannot be handing out money, because its mandate is to grow and protect public servants’ pension money.

“It is, however, up to the PIC to decide on this,” said Parks.

A report by the Sunday Times newspaper stated that Edcon had sent out a letter to its 31 biggest landlords asking for a two-year 41% “rent holiday” in exchange for a 5% stake in the business in a bid to stave off liquidation and the loss of up to 140000 jobs.

The paper reported that Edcon was seeking R2billion in emergency funding from its owners and the stateowned PIC.

The retail giant operates 1 350 stores, which include CNA, Edgars and Jet.

South African Federation of Trade Unions general secretary Zwelinzima Vavi said: “Liquidation must be the last resort at all times. It should be the last thing to consider. I think we don’t have an option but to find a way of rescuing the company. “The government must work with the management and unions to avoid job losses. I don’t know what this discussion may involve, but all I know is that government cannot just sit and do nothing about this,” said Vavi.

The retail giant is not the only company to cut jobs in the country.

Ndalo Media, the SABC and Afro WorldView are among companies that announced major job losses in 2018.

On Monday, Edcon chief executive Grant Pattison said the group was not collapsing as suggested by the report, but was engaged in talks to prevent job losses.

“Edcon’s balance sheet recovery programme has been under way for some time as we continue to focus on completing a recapitalisation of Edcon.

“Part of the process is the continuing discussions with various stakeholders, which include lenders, landlords, potential new investors and others, as we explore and discuss various options,” said Pattison.

The original of this report by Mary-Jane Mphahlele appeared on page 10 of The Star of 19 December 2018

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