Independent Field Technicians Petition

Meeting report

The Deputy Minister of small Business Development, Mr Sidumo Dlamini, tendered his apologies for his absence.

Agenda
Mr H Kruger (DA) said there should be a discussion on the implications of SONA because it made mention of small business.

The Chairperson said the protocol was that the Department would present on SONA at which time the issue would be discussed.

Draft 1st Term Committee Programme
Mr Sibusiso Gumede, Committee Content Advisor, said it was the view of the Parliamentary leadership that oversight could be done physically. The Committee could either go to the Northern Cape and North West provinces or do follow up monitoring and evaluation of the KZN and Gauteng provinces. He said a challenge was that the POPI Act did not allow the Department to give the Committee the names of companies that benefitted from disbursements from SEDA and SEFA to allow the Committee to do oversight.

Mr J De Villiers (DA) supported the proposal to follow up on KZN and Gauteng. He said the Committee had to receive the list of businesses which had received Covid relief funds which the Department had approved so that the Committee could o its oversight work.

Mr F Jacobs (ANC) said there was a looming deadline for the merger of the Small Enterprise Development Agency (SEDA), the Small Enterprise Finance Agency (SEFA) and the Cooperative Banks Development Agency (CBDA) and the Committee needed to get the merger framework from the Department as well as disclosure of the legislative framework for small business. He wanted this issue to be accommodated in the term programme. There was a need to investigate the role of private and public sector support and to not forget the smaller rural provinces.

The Chairperson said the topics should be noted for inclusion by the Department in its presentation on SONA.

Ms B Mathulelwa (EFF) said the Minister should be part of the Committee meeting.

The amended Committee programme was adopted

Briefings on Independent Field Technicians Petition

Mr Kruger, the sponsor of the petition, made some introductory remarks. He said the case of the Independent Field Technicians (IFT)’s experiences with Telkom was a classic case of big business bullying small businesses. The Department had failed small business in not bringing the Small Business Act legislation into place and hence there was no Ombudsman to deal with cases such as those of the IFTs.

Ms Evelyn Smith, Director of Sudane Projects and Services, led the IFT presentation. She said Telkom had started a BEE initiative to build up small businesses through entering into contractual relationships with Independent Field Technicians (IFT) who were drawn from the unemployed and came from the previously disadvantaged sectors. In the start-up phase Telkom made unilateral decisions on the negotiated vehicles for the IFTs where the IFTs were disadvantaged because they could have leased vehicles for half the price that Telkom was charging them and Telkom was only sponsoring tools for half the technicians of a company. In her particular case, through no error on her part, Telkom had had a problem issuing a vendor number to her, she only received work three weeks after the start date yet was still liable for leasing costs for the full month. The work she received was OK for a few months but then started becoming rocky, yet she was still liable for leasing and other costs, such that she depleted her savings and her children’s education fund. She had been trying to resolve the problem for years, but to no avail. She said Telkom had caused the banks to repossess her house and cars. She said the Telkom Administrator of the program, Mr Ben van Zyl, was a white manager running the BEE program but had no success and had also engaged with the Black Business Forum and line managers but none could assist. She had been threatened and bullied.

She was followed by another member of the IFT delegation Mr Darian Sithi, of ACSS Telecommunications, who gave his experiences. He said that he had lost his house, had to downgrade his vehicle because Telkom had operated in bad faith. He said Telkom’s permanent staff were flooded with work but the IFTs were unilaterally dropped.

The third and final presenter of the IFT delegation Johnny Makgatla of Mzansi Broadband commented that he had looked at the BEE project as the emancipation of black business as they were made to believe that they would be getting a guaranteed amount of work, but after Telkom’s backlog was cleared the IFTs received less jobs and the prices they received for the work done was at the same time slashed. The decrease in workload and prices were unilateral decisions made by Telkom without consulting the IFTs and led them to receive approximately half of what they used to receive.

Ms Smith said that in 2017 there was a rate reduction and changes to the Service Level Agreement. The IFTs were not happy and complained to Telkom. The effects of the changes were that part of Telkom’s costs and risks were shifted onto the IFTs and the prices they were receiving for work was reduced. In addition Telkom had never visited any of the IFT companies to see how they were faring as small businesses.

The Chairperson said the presentation had affected her and key issues were the dispossession of the homes of the IFTs; the impact IFT’s debt had had on the education of their children; labour relations; and the relationship between Telkom and the IFTs.

Discussion
Mr Kruger reiterated that it was a classic case of big business misusing small businesses. He said the Committee’s mandate was to look after small business and to make an example of Telkom. If there had been an Ombudsman, it would do the case but in its absence the Committee must act as if it was an Ombudsman.

Mr De Villiers asked if the IFT companies were set up just to serve Telkom. Telkom had used BEE to set up the small businesses but had then turned around and bankrupted those businesses. Did the IFT go the legal route to seek financial redress? He agreed that there was a need to speed up the establishment of the Ombudsman and the passing of the new legislation. He said Telkom was 40% owned by government and therefore the taxpayers and hoped Telkom would review its position and responsibilities.

Ms Mathulelwa said that the Committee had to commit to meeting with Telkom within seven days or to hold Telkom to account and must not allow big business to bully small business especially now that the state was envisaging increased privatisation.

Mr D Mthenjane (EFF) said Telkom was just the tip of the iceberg concerning BEE issues as there was a lot of this happening at Eskom. Privatisation was shifting job creation to the private sector. He said the Minister would fail them. “Would she be able to solve this problem, as she was a failure herself?” and there was a need to take this issue seriously.

Mr Jacobs said Telkom and its agencies needed to be given the right to reply. He said the relevant stakeholders needed to resolve the issue. If it was not possible to be resolved by Telkom and Open Serve the it had to be done by the relevant ministry. He said he was unsure whether it was an unfair labour practise or unfair business practise. If it was a labour matter, then the Committee needed to get legal advice. He knew that SEOs were used for self -serving purposes, but that there should be a set-aside for black business for a localisation program and that small business had to be championed because they carry the biggest risks.

Mr Kruger said the petition’s initial date was three years ago. This was an indicator of how long government’s wheels were turning regarding the struggles of small businesses. He agreed that Telkom should present its case before the Committee as it was a small business issue.

The Chairperson requested the Committee Secretariat get legal advice about which department was responsible. She agreed on the need for an Ombudsman. The relevant departments all had to be involved and a check should be made on how far the matter was taken legally.

Mr Kruger said that if it was deemed a labour issue, the Committee and other relevant Portfolio Committees could do a joint sitting, but the Portfolio Committee on Small Business Development should champion the case.

Ms Mathulelwa said there should not be a long period before the issue was sorted. The Committee should have a legal advisor on standby in future for cases where a legal advisor might be needed. She said she was surprised that Telkom was not present at this meeting to present its side of the story. She said the matter had to be resolved speedily.

Mr Gumede said the petition had initially gone to the Department of Communications before being diverted to the Committee and this was why the time period was so long.

The Chairperson said the matter needed to be dealt with urgently, within seven days.

On the question of whether the IFTs had gone the legal route, Ms Smith replied that the IFTs did not go that route because it had no money.

Mr Gumede said the meeting with Telkom would have to be scheduled outside of the normal meeting days of the Committee as the Committee’s meeting days were already fully booked.

The Chairperson said that would not be a problem.

Committee Minutes
Turning to the adoption of Minutes, the Minutes of 8 December were adopted.

The meeting was adjourned.