ATC180613: Report of the Select Committee on Petitions And Executive Undertakings on the hearing of the Transkei Road Transport Corporation Petition held, on 18 April 2018, at Parliament, as adopted on 13 June 2018
REPORT OF THE SELECT COMMITTEE ON PETITIONS AND EXECUTIVE UNDERTAKINGS ON THE HEARING OF THE TRANSKEI ROAD TRANSPORT CORPORATION PETITION HELD, ON 18 APRIL 2018, AT PARLIAMENT, AS ADOPTED ON 13 JUNE 2018
The Select Committee on Petitions and Executive Undertakings having reconsidered the Transkei Road Transport Corporation Petition (TRTC) petition (petition), received by the Office of the Chairperson of the National Council of Provinces (NCOP) on 1 December 2014 and referred to the Select Committee on Petitions and Executive Undertakings (Committee) for its consideration and resolution, reports as follows:
The petition was submitted to the Chairperson of the NCOP by the late Mr M Mahlahla, Mr A Z Dumalisile and Mr NJ Nodayinge (petitioners) on behalf of former employees of TRTC’S Mthatha Depot.
The petition requests the intervention of the NCOP in assisting the petitioners to receive various benefits (namely, pension benefits, unpaid leave and UIF related benefits) which they are entitled to receive as former employees of TRTC. TRTC, a former parastatal bus company, was dissolved and liquidated in terms of a government proclamation on 18 January 1996 and the petitioners contend they were not paid out the benefits at the dissolution of TRTC. The petition further stipulates that at the time when TRTC was dissolved and liquidated an undertaking was given by the management of TRTC that the entity would resume with its operations in March 1997 but this did not happen and as a result, the petitioners, along with other former employees of TRTC, were left unemployed.
It is also important to make mention of the fact that the petition submitted to the NCOP by the petitioners was accompanied by correspondence written by the petitioners and appealing to, amongst others, the President of the Republic of South Africa and former Major General HB Holomisa for their intervention in ensuring they were paid their benefits in this regard.
- FIRST HEARING
After deliberating on the various submissions made during the first hearing on the petition, held on 10 September 2015, the Committee put forward the following recommendations:
- Treasury is to spearhead an urgent investigation into the issues raised in the petition;
- This investigation is to include all the affected stakeholders (i.e. the Department of Labour, Department of Transport and Eastern Cape Provincial Government) and the implicated financial institutions (i.e. First National Bank, Price Waterhouse Coopers and Alexander Forbes);
- The investigation is to further entail, inter alia, an audit into the number of employees TRTC had prior to its liquidation; the number of TRTC employees which received benefits post its liquidation; and the assets held by TRTC prior to its liquidation;
- The investigation is to be completed within 6 months of the adoption of this report by the House; and
- Following the completion of the investigation, the affected stakeholders are to appear before the Committee, and report on the outcomes of the investigation as well as propose a way forward.
- Parliament is to be the overall coordinator of the investigation and is to coordinate the investigation through the relevant Select Committees, namely the Select Committee on Labour and Public Enterprises and Select Committee on Finance.
- Parliament is to, further, initiate a process aimed at ensuring that previous pieces of legislation are aligned to suit the current state of affairs.
The Committee also, subsequently, tabled a report in the House and the report was adopted by the House on 22 May 2017.
- SECOND HEARING
After the Committee tabled a report in the House on the petition, it later came to its attention that despite tabling a report on the petition very little or nothing has been done in relation to the recommendations it put forward in the report.
The Committee consequently took a decision to reconsider the petition and hold a second hearing on the petition aimed at requesting the stakeholders, implicated in the petition, to advise the Committee on how they will be able to assist the Committee in resolving the petition.
- COMMITTEE MEMBERS AND OFFICIALS
The following Committee Members were in attendance at the second hearing on the petition:
3.1.1 Hon D L Ximbi, ANC, Western Cape (Chairperson of the Committee);
3.1.2 Hon J M Mthethwa, ANC, Kwa-Zulu Natal;
3.1.3 Hon S G Mthimunye, ANC, Mpumalanga;
3.1.4 Hon T Wana, ANC, Eastern Cape;
3.1.5 Hon M Chetty, DA, Kwa-Zulu Natal;
3.1.6 Hon B A Engelbrecht, DA, Gauteng;
3.1.7 Hon G Michalakis, DA, Free State; and
3.1.8 Hon T Gaehler, UDM, Eastern Cape.
The Members present, at the second hearing on petition, were supported by the following officials:
3.1.9 Mr N Mkhize (Committee Secretary);
3.1.10 Dr M Gondwe (Content Advisor); and
- Mr M Dodo (Committee Assistant).
The hearing on the petition was attended by the following stakeholders:
3.2.1 Representatives of the Special Investigating Unit: Adv J L Mothiba (Head of the Special Investigating Unit); Mr G W Visagie (Head of Civil Litigation); and Mr H Hector (Project Manager);
3.2.2 Representatives of the National Department of Labour: Mr V Macleod (Director: Commissioner of the Unemployment Insurance Fund); Mr T Maruping (Commissioner of the Unemployment Insurance Fund); Ms D J Makgato (Acting Director: Unemployment Insurance Fund); Adv. T S Mokeona (Director General); Mr K W Mhloweni (Office of the Director General); and Mr E Nyekemba (Parliamentary Liaison Officer); and
3.2.3 Representative of the National Department of Transport: Mr L Manamela (Chief Director).
Invitations to appear before the Committee and make submissions on the petition were extended to the Alexander Forbes and the National Department of Treasury (National Treasury). However, National Treasury cited a lack of the requisite jurisdiction for its inability to appear before the Committee since the matter is not related to the Government Employees Pension Fund (GEPF) and Government Pensions Administration Agency (GPAA). See the letter from National Treasury attached hereto as Annexure A.
Alexander Forbes on the other hand, cited prior commitments for its inability to appear before the Committee, and assured the Committee that it will establish the latest status to any unclaimed benefits. See the attached letter from Alexander Forbes attached hereto as Annexure B.
- SUBMISSIONS BY THE SPECIAL INVESTIGATING UNIT
Submissions by the Special Investigating Unit (SIU) were led by the Head of the SIU, Adv J L Mothiba (Adv Mothiba). In his brief opening remarks, Adv Mothiba submitted that the SIU derives its mandate from a proclamation signed by the President of the Republic of South Africa. He further submitted that because the SIU is a creature of statute, it can only operate within the confines of its empowering legislation. He added that the SIU reports to the President, and can only do what the President tells it to do. With respect to the petition, Adv Mothiba informed the Committee that the mandate of the SIU investigation was limited only to the assets of TRTC. Adv Mothiba also indicated that his colleagues, whom were present at the time of the investigation by the SIU, are better placed to provide information to the Committee on the role of the SIU in the investigation of Transkei Road Transport Corporation (TRTC). He then duly requested Mr G W Visagie (Mr Visagie), the Head of Civil Litigation, to fully appraise the Committee on the events leading up to investigation as well as the outcome of the investigation by the SIU.
In a comprehensive presentation to the Committee, Mr Visagie made the Committee aware that the investigation by the SIU was mandated by a proclamation made on the 31 January 2003 and limited to the following scope:
- The acquisition of assets belonging to the liquidated TRTC by Umanyano Transport and the Department’s involved in this matter;
- The transfer of assets belonging to the liquidated TRTC to Umanyano Transport; and
- The registration of motor vehicles belonging to the liquidated TRTC in the name of Umanyano Transport.
The Committee was further made aware that the proclamation did not mandate any investigation or enquiry into termination of the benefits payable to the former employees of the TRTC.
Mr Visagie first took the Committee through the facts shown by the investigation at that time. In this respect, the Committee was made aware that during the period following the appointment of liquidators and auctioneers to assist with the winding up of the affairs of TRTC, a period of chaos, intimidation, harassment and lawlessness followed. The situation became so volatile that liquidators were forced to abandon their attempt to wind up TRTC. The assets of TRTC were vandalized and some of the assets of TRTC were even misappropriated. The Committee was informed that an entity was formed by the former employees of TRTC, known as Umanyano Transport which was very prominent in the process of the misappropriation of the property belonging to TRTC. The SIU found that the assets and vehicles belonging to and registered in the name of the TRTC were either stolen and sold, or were irregularly registered in the name of Umanyano Transport. The assets affected, in this regard, included bus deports used by TRTC and busses used by TRTC.
Mr Visagie then took the Committee through the outcome of the investigation. In this respect, he informed the Committee that the SIU restored control over some fixed property including some of the depots used by the former TRTC which were sold by an auctioneer for R 2 669 214 (two million six hundred and sixty-nine and two hundred and fourteen rand) a recovery for the fiscal. The SIU also recovered rental payable to the state in the amount of R450 000 (four hundred and fifty rand) and 9 houses belonging to TRTC were also recovered and sold for R600 000 (six hundred thousand rand). The SIU also obtained several evictions orders, to evict non-paying tenants on properties that belong to TRTC.
The Committee was also informed that TRTC had leased a majority of its depots (other than the Mthatha depot) from various local municipalities and these depots were returned to the municipalities with some of improvements that were added by the TRTC. As such a significant number of the depots that TRTC was operating from were leased from municipalities and did not actually belong to TRTC. Depots in Idutywa, Mount Frere, Qumbu, Ntabankulu and Mbizana, for example, were not owned by TRTC but were leased from the municipalities and were later handed back to those municipalities. The one depot that was sold off through auction was the Mthatha depot and is referred to in the recoveries. And the TRTC head office was handed to the Mbizana community with the consent of the municipality, as a large portion of it fell within the tribal lands.
Lastly, Mr Visagie informed the Committee that the whole issue of the compensation due to former employees of TRTC and in particular the question of the contractual obligation to assist them with future employment was comprehensively dealt by the Eastern Cape High Court in the matter of Lungile Elliot Siyepu and 508 other versus Premier of the Eastern Cape, Case Number: 203/2000. He further informed the Committee that it was common cause in that matter that the Premier of the Eastern Cape (Premier) had fully complied with the undertakings at the liquidation of TRTC to assist with payment of salaries over a future period, leave pay, accrued bonuses, pension payments and also the payment of severance packages. Further according to Mr Visagie, the only real question was whether the Premier was contractually bound to honour an undertaking to “assist former TRTC employees to secure employment in a new transport arrangement”. The former employees of TRTC claimed breach of contract and thus claimed damages. Mr Visagie stated the Court was faced with the question of whether the undertaking by the Premier to assist with securing employment was a legally enforceable obligation and whether this obligation was actually complied with. And the Court ultimately found that there was no common intention that this clause will have a contractual effect. It also found that the plaintiffs were compensated for the impact of the liquidation and could not succeed on a contractual basis to claim damages. Lastly, the Court further found that the new entities in the transport industry created by the Premier were indicative of creating a climate to enable them to find jobs and there was no contractual obligation to create a new parastatal similar to TRTC. The claim by the former employees of TRTC was accordingly dismissed.
Mr Visagie also advised the Committee to take note of the fact that the court case was instituted in 2002 prior to the SIU proclamation of 2003 to investigate and that the judgment was delivered on the 11 September 2011. Mr Visagie further advised the Committee to note that the judgment was not linked directly to the SIU investigation and that the SIU was not part of the litigation.
Further in concluding his submissions, Mr Visagie informed the Committee that there were several criminal cases opened but whenever people had to be arrested there was unrest in the area, and none of the cases went further and also no disciplinary action has been taken against any officials. He also explained that the SIU was not involved in the liquidation of the TRTC but was requested to conduct an investigation following the liquidation process.
In concluding his submissions, Mr Visagie suggested the Committee request Ernst and Young to appear before it and give evidence on what actually happened during liquidation of TRTC given that they were the liquidators of TRTC. Mr Visagie further suggested the Committee request the Eastern Cape Provincial Department of Transport to appear before it and provide evidence on the events leading up to the liquidation of TRTC. Mr Visagie further committed to providing the Committee with a report on what happened to the proceeds of the properties that the SIU was able to recover and dispose of following the liquidation of the SIU
- SUBMISSIONS BY THE NATIONAL DEPARTMENT OF LABOUR
In his brief submissions to the Committee, the Commissioner of the Unemployment Insurance Fund (UIF) for the Department of Labour, Mr T Maruping (Mr Maruping), gave a brief background on when UIF becomes payable. In this regard, he informed the Committee that for UIF to become payable, you need a registered company that must declare its employees to the National Department of Labour (Department). He further stated that both the company and its employees must make contributions twoards UIF.
Mr Maruping also informed the Committee that the Department conducted a background check on the 62 (sixty-two) former TRTC employees listed in the petition (i.e. petitioners) in order to determine if they and TRTC had been registered for UIF and were contributing towards UIF. He notified the Committee that the Department had established, in this regard, that the petitioners and TRTC were not registered for UIF nor were they contributing towards UIF and as such the Department is unable to process any UIF claims on their behalf.
In concluding his submissions, Mr Maruping indicated to the Committee that disputes relating to benefits such as pensions, provident fund payments and severance pay fall outside the jurisdiction of the Department. He also made the Committee aware that severance pay disputes are administered through the CCMA and such referrals are to be done within at least 30 (thirty) days of a dispute arising. Further in closing his submissions, Mr Maruping informed the Committee that the Department has no jurisdiction on matters relating to the enforcement of either pension or provident funds unless this is prescribed by a sectorial determination.
- SUBMISSIONS BY THE NATIONAL DEPARTMENT OF TRANSPORT
Due to time constraints the Department of Transport was unable to make oral submissions to the Committee and as such was requested by the Committee to make its submissions in writing, within a week of the hearing.
To date, the Committee has not received any written submissions from the Department of Transport on the petition.
- OBSERVATIONS AND KEY FINDINGS
The Committee makes the following observations and key findings on the basis of the various submissions made during the hearing on the petition:
7.1 The SIU investigation into TRTC was mandated by a proclamation made on 31 January 2003 and was limited in scope to the assets belonging TRTC post its liquidation.
7.2 The SIU proclamation, in question, did not mandate any investigation or enquiry into termination of the benefits payable to the former employees of the TRTC.
7.3 During the period following the appointment of liquidators and auctioneers to assist with the winding up of the affairs, a period of chaos, intimidation, harassment and lawlessness followed. The situation became so volatile that liquidators were forced to abandon their attempt to wind up TRTC. The assets of TRTC were vandalized and some of the assets were even misappropriated.
7.4 After the liquidation of TRTC, an entity was formed by the former employees of TRTC, known as Umanyano Transport and this entity played a prominent role in misappropriating the property belonging to the former TRTC.
7.5 Following its investigation, the SIU was able to restore control over some fixed property including some of the depots used by the former TRTC which were sold by an auctioneer for R 2 669 214 (two million six hundred and sixty-nine and two hundred and fourteen rand) a recovery for the fiscal. The SIU also recovered rental payable to the state in the amount of R450 000 (four hundred and fifty rand) and 9 houses belonging to TRTC were also recovered and sold for R600 000 (six hundred thousand rand).
7.6 A significant number of TRTC’s depots were leased from municipalities so they did not actually belong to TRTC. Depots in Idutywa, Mount Frere, Qumbu, Ntabankulu and Bizana, for instance, were not owned by TRTC but were leased from the municipalities and were later handed back to those municipalities.
7.7 The issues of the compensation due to former employees of TRTC and in particular the question of the contractual obligation to assist them with future employment were dealt with by the Eastern Cape High Court in the matter of Lungile Elliot Siyepu and 508 other versus Premier of the Eastern Cape, Case Number: 203/2000.
7.8 The Eastern Cape High Court matter of Lungile Elliot Siyepu and 508 other versus Premier of the Eastern Cape was not linked directly to the SIU investigation and the SIU was not party to the litigation.
7.9 The National Department of Labour conducted a background check on the 62 (sixty-two) former TRTC employees listed in the petition (i.e. petitioners) in order to determine if they qualify for UIF payments and established that the petitioners and TRTC were not registered for UIF nor were they contributing towards UIF.
7.10 Disputes relating to benefits such as pensions, provident fund payments and severance pay fall outside the jurisdiction of the National Department of Labour.
7.11 Ernst & Young, were the actual liquidators of TRTC and as such will have to appear before the Committee and give evidence on the liquidation of TRTC.
It is against the observations and key findings made by the Committee that it recommends as follows:
- The Office of the Premier of the Eastern Cape (OTP) is to commission a forensic investigation aimed at conclusively determining, amongst others, the number of employees TRTC had prior to its liquidation; the number of (former) employees of TRTC that received their benefits (i.e. pension, unpaid leave and UIF related benefits) post its liquidation; and the value of the assets held by TRTC prior to its liquidation; the role played by Umanyano Transport post the dissolution of TRTC; and the reasons for the non-payment of various benefits to the petitioners.
- The forensic investigation to be commissioned by the OTP is to ensure that:
- Alexander Forbes provides evidence on the unclaimed benefits fund that it made reference to during the first hearing on the petition;
- Ernst and Young provides evidence on the liquidation process that TRTC underwent; and
8.2.3 Eastern Cape Provincial Department provides evidence on the events leading up to the liquidation of TRTC.
8.3 Alexander Forbes is to assist the petitioners in claiming from the unclaimed benefit fund that it made reference to during the first hearing on the petition.
8.4 The SIU is to provide a written report to the House and OTP on what happened to the proceeds of the properties that it was able to recover and dispose of following the liquidation of the SIU.
8.5 The Office of the Pension Funds Adjudicator is to investigate the non-payment of pension and provident related benefits to the petitioners.
Report to be tabled for consideration.
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