Deployment of SA National Defence Force & Report on finalisation of Armscor employee grievance

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Defence and Military Veterans

11 February 2009
Chairperson: Mr S Ntuli (ANC)- first session & Dr E Schoeman (ANC)- second session
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Meeting Summary

The meeting comprised of two parts. During the first session, the Portfolio Committee on Defence, in the presence of the Deputy Minister for Defence and Members of the Armscor Board, discussed the report on the finalisation of the grievance that had been lodged by the General Manager of Corporate Affairs against the Chief Executive Officer. The Armscor board was asked to answer questions related to the report. Members were visibly disturbed by the way the hearing was handled. The Committee had only discovered certain matters through media reports, were not informed in terms of all the matters by the Board, and were concerned about the open-ended contract of the CEO that had no performance and evaluation clauses, the 23-month suspension period, and the fact that the results of no disciplinary findings against any party, were out of proportion to the time and resources allocated to the complaint. Members felt that the use of outside consultants for what transpired to be a labour issue was wasteful. There still seemed to be deep-seated problems between the two parties. The perceived weakness in the conflict resolution system of Armscor was one of the factors that prolonged the whole investigation. A Member voiced criticisms of the leadership skills of the CEO. The Committee asked that a full report be sent through by the investigators who had ordered the suspension.

During the second session the Joint Committee on Defence considered and adopted the letters from the President regarding the deployment of Defence Force personnel to the DRC in 2008, pursuant to obligations of the Southern African Development Community, and deployment of further personnel to the South African Police Service during the Fifa Confederations Cup Draw in November 2008. SAPS. Members expressed their concern about the late notification of the letters due to logistical problems, and noted that the Joint Committee had to seek approval the Chair of Chairs before this Committee could meet, and the fact that Members served on numerous other committees made it difficult to find a suitable date. This was a matter that would need to be addressed by the next Parliament. Both letters were approved.


Meeting report

Armscor Report on employee grievance
The Chairperson welcomed the Deputy Minister of Defence, Secretary of Defence and Armscor Board Members. He mentioned that the Committee had received a report about a grievance regarding an Armscor employee. He noted that the Committee had invited the Secretary of Defence because the budget allocation for SANDF included Armscor. The recommendation of the Committee would be informed by the deliberations of the meeting.

Dr Popo Molefe, Chairperson of Armscor, said that he did not understand why the Board was invited because it had written to the Committee and stated that the matter had been finalised.

The Chairperson then requested that the CEO, Mr Sipho Thomo and the General Manager for Corporate Affairs, Ms Ntahli Borotho, should recuse themselves briefly from the meeting so that the Board could discuss the matter.

The Chairperson then explained that the Board was supposed to be the caretaker of all Armscor business, as stipulated by the rules and regulations. When the Committee had questions regarding anything within Armscor then it could summon the Board to Parliament.

The Chairperson asked the Board to explain about the employment contract of the CEO, because he had joined Armscor in 1999 at an entry-level position. One of the reasons that senior employees had to sign contracts was to enable the employer to evaluate performance on a regular basis. The CEO was employed as a permanent employee, but he could not be brought to task and fired, even if he did not deliver.

Dr Molefe agreed that the Board had to exercise oversight and ensure corporate governance. He explained that Mr Thomo was appointed by the former CEO through a letter of appointment without a contract. That happened during the era of the former Minister of Defence, Mr Joe Modise. It was common knowledge that heads of departments had to sign performance agreements. He apologised for not forwarding the letter of appointment, because he was not aware that the Committee needed it.

Mr S Msibi, Chairperson of the Human Resources Committee, Armscor Board, replied that the employment contract was considered to be a confidential document between the employer and the employee.
The Chairperson reminded the Board Members that a letter was sent requesting the copy of the contract. He then asked the Committee Secretary to read it out. 
Mr Msibi said that in terms of the Labour Relations Act, it would not be possible to change an employee's conditions of employment without consulting that employee. If that employee refused, then the original agreement would remain in force.

Mr M Sayedali-Shah (DA) said that the Board represented the interest of the citizens. He then asked what kind of disciplinary measures were meted out to the CEO, and why it was that Ms Boroto, the General Manager: Corporate Affairs, had been suspended if the allegations against her were not true. He could not understand the reason for the disciplinary hearing if the results were so inconclusive.

Ms P Daniels (ANC) asked the reason why two Board Members did not attend the meeting, and asked to know what they had said in their letters of apology. She then asked whether the Board was satisfied with what had been done in terms of the performance appraisal of the CEO. She could not understand why the CEO did not have a contract. She asked for clarity on the use of external consultants at the taxpayer's expense, when the matter was purely labour-related.

Mr Msibi replied that the current Board Members were only appointed in July 2008, with the exception of the Chairperson. The former Board had authorised the hearing and some of them were labour experts.

Dr Molefe appealed to the meeting to focus on the substantive issues around the events leading to Ms Boroto's suspension. He added that none of the Board Members worked for Armscor full time and most correspondence was relayed over the phone.
The Chairperson warned the Board that it should have informed the Committee in writing of the matter.
Mr V Ndlovu (IFP) asked the reason that the Board had waited to be summoned to this meeting, when the Board Members knew that they had to report to the Committee.

Dr E Schoeman (ANC) mentioned that the Committee were the custodians of the taxpayers and had every right to ask questions. He was concerned that a person had laid charges against a fellow employee and the charges were found to be unsubstantiated. He felt that the complainant must state her motives. He added he foresaw a dangerous precedence that any employee could accuse another, resulting in a suspension on full pay for 23 months while the matter was investigated.

Hon Fezile Bhengu, Deputy Minister of Defence, mentioned that there was no consultation between Armscor and the Department of Defence in relation to the CEO's contract.

Mr Ndlovu said that Dr Molefe had apologised, yet another member had proferred another explanation and the Committee did not know whom to believe.
Ms Daniels explained that the reason for the questions being asked was to attempt to get to the root of the problem.

Mr Sayedali- Shah asked how long it had taken for the Board to discover that the CEO had no contract attached to the letter of appointment.

The Chairperson wanted to know the reason that other Board Members were not speaking.

Dr Molefe replied that all Board Members were professionals in their chosen field and were not afraid to speak where appropriate. He however added that the protocol dictated that the Chairperson would speak on behalf of them, although they could add any comments if necessary. He said that when he was appointed to the Board in 2004 there were major problems costing billions of rands. It was therefore impossible to ignore these problems and focus on the issue of contracts. However, he said that Ms Borotho had subsequently been suspended. 

Mr Sayedali-Shah asked the reason why, at the end of the day, no disciplinary charges against either party were confirmed.

Dr Molefe replied that it was not the first time that allegations made were then found to be false.

Dr Schoeman mentioned that the CEO's contract stipulated that he was appointed for seven months only, yet he had been in position and had been paid for the past 8 years. He then asked the Board to furnish the Committee with any other letter of appointment that extended his employment.

Dr G Koornhof (ANC) mentioned that Ms Borotho was suspended for 23 months on full pay. He wanted to know who was the person who handled the inquiry on behalf of Armscor, and the name of the Chairperson of the Board's HR Committee. He added that those individuals would have to answer to this Committee.

Dr Molefe replied that the Chair of the previous HR Committee was Dr Cyril Gamede. An Independent Industrial Relations specialist handled the inquiry, and the minutes could confirm that.

Rev P Moatshe (ANC) asked the reason that the CEO was given a thirteenth cheque, even though he did not perform.

Mr Msibi replied that the Board appointed the CEO and informed the Department of Defence, then drafted the contracts and forwarded the contract to the Department. If the person appointed did perform properly, then that person would get a performance bonus. Any appointee employed by any company had to be developed in accordance with career pathing. The Labour Relations Act (LRA) stipulated that if a person was appointed for period of seven months, then in the absence of another contract the old one should continue to be in force.

Dr Koornhof said that any new Board members had to familiarise themselves with the decisions of the previous Board for the sake of continuity. It seemed that it was not the case with the current Board.

Ms R Msiza, Non Executive Member, Armscor Board, replied that Mr Msibi had chaired the hearing and she herself was the prosecutor. She said that both parties were given a fair chance to be heard.

Mr Sayedali-Shah said that the grievance system of Armscor needed to be revisited so as not to waste money and time. He added that in his opinion the CEO was not fit to be a leader and he should be removed.

Mr L Diale (ANC) said that whoever investigated the case needed to compile a report for the Committee.

Ms Daniels asked for clarity on Sinakho. She added that if lawyers represented Ms Borotho then it showed that the matter was important.
Mr Msibi replied that Ms Borotho represented herself and Sinakho provided secretarial services.
Mr B Fihla (ANC)  asked whether there were any foreign shareholders in Armscor.

Dr Molefe replied that Armscor was wholly Government-owned.

Ms Sayedali-Shah asked about the current position held by Ms Borotho.

Dr Molefe replied that the CEO wanted to deploy Ms Borotho elsewhere, and he then informed the HR Committee and the Board. Ms Borotho refused the offer because she was not happy with the redeployment and she filed a complaint.

An ANC Member wanted to know the reason that the Committee was not informed about Sinakho.

Dr Molefe replied that the Board was concerned with the bigger picture, and matters such as Sinakho were operational matters.

The Chairperson reminded the Board to forward the letters of apology for the two Board Members who did not attend this meeting.
Dr Koornhof warned the Board that they should not have spent so much time and resources on a single case.

Dr Schoeman recommended that the Board should monitor the relations between the CEO and Ms Borotho because it would not be unusual to find matters rather strained after such an incident.

The Committee then debated whether or not they should ask any questions of Ms Borotho, but decided that they should ask her to state her case, but not cross-examine her.

Ms Borotho was called into the meeting and was duly invited to speak. She explained that on 24 November 2006 she was offered a position, and was due to start in this position on 1 December 2006. She told the CEO she needed clarity regarding the position and what was expected of her. The CEO did not reply to her questions, but she was then told that the offer was withdrawn. She then lodged a complaint about victimisation and intimidation by the CEO. At the hearing she was told that she was suspended, and that suspension dragged on for 23 months. In July 2008 she was told that she could return to work, but still did not have a job description.  Since July 2008 she had attended work regularly but was being ignored, and she felt frustrated because she was paid for doing nothing.
The Chairperson asked the person who authorised the suspension of Ms Borotho to review the whole case and forward recommendations to the Committee.

Dr Molefe said that he was enlightened by the observations, concerns and the recommendations of the Committee.
Rev Moatshe said that the Committee was surprised when it had seen media reports regarding the problems at Armscor. He thanked the Board and the Defence Secretary on behalf of the Committee.

Consideration and the adoption of Letters from the President on the Deployment of the South African National Defence Force (SANDF)
Dr E Schoeman (ANC) chaired this part of the meeting.
The Committee convened as the Joint Defence Committee to consider and adopt letters from the President on the deployment of the South African National Defence Force (SANDF).

The Chairperson referred to the contents of the Letters of Deployment before the Members. One of these letters dealt with the deployment of the SANDF personnel to the South African Police Service during the FIFA Confederations Cup draw that was held in Sandton on 19 November 2008. The second letter dealt with the deployment of the SANDF personnel in the Democratic Republic of Congo (DRC) in furtherance of Southern African Development Community (SADC) obligations. This deployment was authorised in accordance with provisions of Section 201(2)(a) of the Constitution, read with Section 19 and 93 of the Defence Act, 2002 (Act No.42 of 2002).

Mr M Pheko (PAC) asked the reason that that the issue was only taken up by the Committee in February 2009 although the letters were written in December and November 2008.
The Chairperson replied that the Committee had only received the letters on 22 January 2009, as a result of logistical problems. The Procedure staff received them on 11 November 2008. The main problem was that the Committee had to get permission from the Chair of Chairpersons to hold a Joint Committee Meeting. He added that the new Parliament would have to resolve such issues

Mr Ndlovu reiterated the Chairperson's position and said that it was becoming increasingly difficult for the Committee to meet.

Mr M Mzizi (IFP) replied that most Members of the Committee also served on the Justice Committees, which had, during January, been busy with public hearings, which meant that the Joint Committee on Defence could not meet.

The Chairperson said that the Committee had served its purpose and it was a duplication and should be dissolved.

Members agreed unanimously to adopt the letters.

The meeting was adjourned.


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