ATC181017: Report of the Portfolio Committee on Labour on an Oversight visit to Gauteng and Free State Provinces, dated 17 October 2018
REPORT OF THE PORTFOLIO COMMITTEE ON LABOUR ON AN OVERSIGHT VISIT TO GAUTENG AND FREE STATE PROVINCES, DATED 17 OCTOBER 2018
The Portfolio Committee on Labour, having conducted an oversight visit to workplaces in Gauteng and Free State Provinces from 14 to 16 August 2018, reports as follows:
Parliament derives its powers from the Constitution of the Republic of South Africa, 1996. Section 42(3) bestows oversight of executive function to the National Assembly. Section 55(2)(b) empowers the National Assembly to provide for mechanism to maintain oversight of the exercise of national executive authority, including the implementation of legislation.
One of the functions of oversight listed in the Oversight and Accountability model is to ensure that policies announced by government and authorised by Parliament are actually delivered. This function includes monitoring the achievement of goals set by legislation and the government’s own programmes.
In compliance with the above, the Portfolio Committee on Labour undertook an oversight visit to Gauteng to interact with stakeholders in the horse-racing industry. Furthermore, the Committee conducted oversight in the Free State Province, focusing in Mining, Hospitality, Wholesale and Retail, as well as Construction sectors. The focal point of the visit was to monitor compliance with labour legislation. The purpose of this report is to highlight the issues raised by the workers and employers as well as the observations made by the Committee Members during the oversight visit and to make some recommendations.
- Objective of the visit
The objective of the visit was to monitor compliance to labour legislation with regard to working conditions of the workers, contracts of employment, status of work permits for foreign nationals who work in South Africa and other matters relevant to conditions of employment.
- Portfolio Committee on Labour
The delegation comprised the following Honourable Members:
Mr BL Mashile (Chairperson - ANC))
Ms LN Mjobo (ANC)
Ms LC Theko (ANC)
Ms TMA Tongwane (ANC)
Mr D America (DA).
The following support staff accompanied the delegation:
Mr ZC Sakasa, Committee Secretary
Mr S Ngcobo, Content Adviser
Ms P Ntabeni, Committee Assistant
Mr T Mokoena, Committee Researcher
Mr S Mokoena, Communications Officer.
3.2. The delegation held a briefing session on the evening of 13 August 2018, at the Southern Sun Hotel in Sandton where the delegation was briefed on the various industries to be visited in the week ahead. The delegation was joined by the Gauteng Provincial Department of Labour which laid the plan for the first visit in the horse-racing industry in Gauteng. At this meeting the Department of Labour was represented by the Chief Director: Provincial Office (CDPO), Mr T Mokomatsidi.
- Oversight visit to Randjesfontein Country Estate in Midrand (14 August 2018)
The delegation was welcomed to the estate by the Mr Ernest Mahlane (board member). The leader of the delegation informed Mr Mahlane of the purpose of the visit. It became apparent from the presentation of Mr Mahlane that the estate was not the intended focus of the oversight visit. However, Mr Mahlane informed the delegation as follows:
- The Randjesfontein Country Estate is a non-profit organisation (NPO), which employs 45 workers.
- Of the 45 workers, 42 are security personnel and are all males. Three of the workers are female and they are employed in Finance, Estate Supervision and Administration respectively.
- There are no workers who stay on-site.
- There are forums for communicating with security personnel.
- The estate used to be a farm and it comprise 365 properties.
- The estate adheres to labour legislation and it is compliant to Private Security Industry Regulatory Authority (PSIRA).
- Workers are paid annual bonuses on their birthdays; a 13th cheque; and also transport is provided for them.
The delegation proceeded to Randjesfontein North Rand Training Centre.
- Oversight visit to Randjesfontein North Rand Training Centre
The delegation was welcomed by the Race Track Manager and the Security Site Manager. The centre is managed by Phumelela Gaming and Leisure (Ltd). It employs 30 staff members. The Trainers have lease agreements with Phumelela and these Trainers employ horse groomers. Groomers stay in hostels that were built by Phumelela. The delegation was informed that the lease agreement between the Trainer and Phumelela has a condition that the Trainer must comply with labour legislation, such as, Basic Conditions of Employment Act (BCEA), Labour Relations Act (LRA), Compensation for Occupational Injuries and Diseases Act (COIDA), Unemployment Insurance Act (UIF Act), Occupational Health and Safety Act (OHSA), etc. The lease agreement is managed by Trainer Liaison Manager. There are three independent horse groomers associations, which are SANGATA, SHAKA and PMG. The centre referred undocumented foreign nationals, mainly from Zimbabwe and Mozambique, to the Department of Home Affairs for registration. The delegation was informed that horse groomers are paid in accordance with the minimum wage relevant to their sector and that there is a Health and Safety Manager on-site.
The delegation was addressed by one of the Trainers, who informed them that she employs eight horse groomers who are all males and has 19 horses. She pays groomers R1000 per week. All her groomers are from the Eastern Cape. There are approximately 20 Trainers in Randjesfontein. She was of the view that Trainers try to comply with the labour laws such as COIDA, UIF, etc. She told the delegation that she is compliant to UIF Act, COIDA and BCEA and that all her groomers are registered as employees. Her duty as a Trainer is to find clients, which are people who want to own horses. The duty of the groomer includes, among others, to clean the horses, take the horses on race track, train the horse to be ridden and clean the stable. The delegation had wished to engage with other Trainers since they were direct employers of the groomers, but they were not available at the time. An invitation would be extended to meet with representatives of their association, at a later stage.
The delegation was informed that Randjesfontein is contracted to Netcare for emergency medical services.
After interacting with management, the delegation visited the hostels where groomers stay.
- Committee observations after a walk-about and interaction with the groomers
The Committee made the following observations:
- While the hostel that the delegation was taken to was not in a good condition, it was in a better state than the second one that the delegation decided to visit unannounced. The delegation was informed by workers that the hostel was recently renovated.
- The ablution facilities were found to be in an unhygienic state. Showers did not have doors for privacy and some toilets could not flush properly.
- Randjesfontein is one big estate with different business interests resulting in lack of uniformity in conditions of employment.
- Some workers produced pay slips which reflected UIF deductions while others reported that they were paid in cash and had no clue of deductions effected in their payments. They reported that they did not belong to a provident fund.
- Workers reported that they were required to submit a medical certificate even when off-sick for one day and failure to do so resulted in a R50 reduction per day and R200 for weekends. They alleged that they were not paid bonuses and overtime.
- Some workers reported that they were provided with working clothes two years ago and did not receive replacements since then.
- Some workers reported that they were granted 2 - 3 weeks’ leave per annum.
- Groomers complained that they spent most of their working lives at the hostel, up to 30 years, but they have nothing to show when they leave the hostel at the end. Most of them have nowhere to go after retirement as they never have the opportunity to even own a house.
5.2 Committee Recommendations
The Committee made the following recommendations:
- A representative association of Trainers needs to be invited to appear before the Committee in Parliament and present, among other things their lease agreement with Phumelela regarding living conditions of the groomers in the hostels;
- Phumelela Gaming and Leisure (Ltd) should be held accountable and a notice served to them since legally they also form part of the employer;
- The inspectorate of the Department of Labour to conduct a thorough inspection on the Randjesfontein North Rand Training Centre as well as the horse-racing industry at large.
- Oversight visit to Sibanye Stillwater Mine in Beatrix, Free State (15 August 2018)
At Sibanye Stillwater Mine in Beatrix, the delegation was joined by the Free Sate Provincial Department of Labour, led by the Chief Director: Provincial Office (CDPO), Ms N Douw-Jack. The Provincial Department, with the Provincial Chief Inspector and her team on call, would accompany the delegation at all work-places in the Free State until the end of the week.
The delegation was welcomed by the Deputy President of the mine who, with his management team, took the delegation through various presentations. It came out of the presentations that Sibanye Gold, besides the Beatrix operation, has footprints in other parts of the country such as North West and Gauteng provinces. It also has operations beyond the borders of South Africa, including Zimbabwe and United States of America.
The Beatrix operation was in the media in January 2018 when there was a storm/tornado that resulted in pylons tumbling and trees outrooted. This led to power failure resulting in miners who were underground not being able to come to the surface. The miners who were underground were instructed to gather in one place to await rescue. Power was restored after 36 hours through collaboration between the mine and Eskom. All miners were brought to the surface safely and were provided with emergency care and counselling which was also provided to family members.
The delegation was informed that Shaft 4 at Beatrix operations is the deepest at 2 400 metres.
6.1. Human Resource presentation
The Human Resource Manager informed the delegation about the training programme where communities are trained in mining related skills. This is part of Corporate Social Investment of the company and the first cadets graduated recently.
The total establishment of the Beatrix operation comprise 8183 permanent staff members and 872 contractors. The majority of workers are from the Free State at 35.2% and this is followed by the Eastern Cape at 26.5%. The operation has 28.2% foreign nationals in its establishment.
Of the 688 women employed at the Beatrix operation, 670 are Africans, 16 White and 2 are Coloured. Women constitute 9% of the total establishment. The majority of women are in the E salary band at 20% and this is followed by women in the A band at 19%. Women are less represented in the B band at 5% and the explanation provided was that the nature of work at this band requires more physical strength. New technology is being introduced to ensure that more women can be able to do the work at this level. The absence of Indian population at all levels of employment was conspicuous. The reason provided was that historically, Indians are less represented in the demographics of the Free State province.
6.2. Other issues
Other issues that were discussed fall outside the purview of the legislation administered by the Department of Labour. These include:
6.2.1 Occupational Health and Safety and Wellness issues such as incidents of Silicosis and Tuberculosis, which are administered by the Mine Health and Safety Inspectorate of the Department of Mineral Resources;
6.2.2 Provision of accommodation, which include single accommodation complexes and family units as well as provision of living allowances and its attendant problems; and
6.2.3 Illicit/ illegal mining, which was reported to be more prevalent at the neighbouring Harmony mine than at the Beatrix operation.
6.3. Issues raised by organised labour
Both NUM and AMCU representatives attended the meeting. They raised the issue of lack of consultation when the mine was transferred from Goldfields to Sibanye. Apparently the mine was transferred as a going concern in accordance with the Labour Relations Act. Historically the mine was owned by Anglo American and later taken over by Harmony and then transferred to Goldfields. According to AMCU, there were consultations all along but not when the mine was transferred from Goldfields to Sibanye. However, it is worth noting that the two unions are cooperating in addressing labour issues at the Beatrix operation.
6.4. Committee Recommendations
The Committee made the following recommendations:
- The Department of Mineral Resources provide a report on cases of illicit mining within 14 days;
- The two unions recognised at Beatrix, NUM and AMCU also provide a joint report on their labour experiences on the mine;
- An effort be made by the mine recruitment to ensure adherence to employment equity targets;
- That management at the living quarters look into the possibility of ensuring that all dining halls are open during meal-times as workers complained of long queues sometimes in the rain. These queues also resulted in some workers either being late for their shifts or abandoning their meals.
From Beatrix, the delegation proceeded to Bloemfontein where they planned to conduct an oversight in the Hospitality Industry at Protea Hotel.
- Oversight visit to the Protea Hotel, Bloemfontein (15 August 2018)
On arrival at the Protea Hotel, the delegation was informed that most of the senior management had already knocked off. The delegation recommended that the provincial office of the Department conduct an inspection at the hotel and report back on the following day.
On 16 August, the Chief Director: Provincial Office (CDPO) reported as follows:
- The employer reported that it has outsourced some of its human resource functions to the labour consultant. Hence, it was reported, some of its documents are with the consultant. However, the Act requires that documentation be kept on the premises of the employer. It was therefore unacceptable for the employer to be unable to produce employment equity documentation. The absence of the employment equity plan is a contravention that would be directly referred for prosecution through statutory services. A compliance order was served for failure to appoint an Employment Equity Manager.
- Sectoral determination 14 provides for 36 consecutive hours of weekly rest period. A compliance order was served to the employer for providing 24 hours instead of 36. The sectoral determination also requires an employee to produce a medical certificate when absent for more than two consecutive days. A compliance order was served for requiring employees to produce medical certificates for absence of just one day.
- The employer was found to be compliant with the Occupational Health and Safety Act.
- The employer was found to be registered and in good standing with the Compensation Fund.
- The Unemployment Insurance Act and Unemployment Insurance Contributions Act require employers to declare employees by the 7th of each month. A compliance order was served to the employer for failure to comply with this provision. The employer complied with the Unemployment Insurance Contributions Act.
Employers are required by law to comply with the order within 14 calendar days and to prove compliance to the inspector within this period. Failure to do so would result in the inspector recommending prosecution.
- Oversight visit to Makro Store, Bloemfontein (16 August 2018)
The delegation was received by the General Manager of the store and his team of various other managers. The General Manager, who started in November 2017, informed the delegation that Bloemfontein Makro store is the smallest in the business (Group). Furthermore, the delegation was informed that Makro is 51% owned by Massmart, while Massmart is 51% owned by Walmart. Walmart is a United States based company. The Bloemfontein store has a retail and wholesale section.
The total establishment of the company comprise 180 permanent workers and 265 outsourced workers. The company is planning to absorb the outsourced workers into the establishment. According to the HR Manager, the majority of workers are African (African Males: 42.8% and African Females: 35.1%). There were no foreign nationals reported to be employed by Bloemfontein Makro. The company did not meet the employment equity targets and the reason provided was that it did not receive applications from Indian community. However, the Human Resource Manager reported that there are two vacancies which would be filled in accordance with employment equity requirements.
The company policy provides for sick leave and temporary disability leave. Medical aid is provided for permanent staff and there is Unemployment Insurance Fund and Provident Fund for workers. One of the managers reported Makro would not be affected by the introduction of the National Minimum Wage since their salaries are regulated by the Sectoral Determination for Wholesale and Retail sector. On walk-about, the labour legislation was found to be prominently displayed as per requirement.
The union representative reported that the union has a good relationship with management since they are consulted on important issues. The union is provided with facilities such as office space and telephone. Union representatives also sit in recruitment interviews as observers. There is a recognition agreement concluded between management and organised labour. The management of the company has monthly meetings with staff where the union has an open invitation. The union holds its meetings with its members weekly. The union representative, however did mention during the walk-about that there is some form of victimisation taking place subtly. The Chairperson of their union was recently dismissed at what they felt was unfounded allegations of theft, since no evidence of the stolen item was produced by the security personnel.
The company has the trained Health and Safety Officer, First Aiders and Fire Fighters. In case of an injury occurring on duty, the decision to refer the worker to hospital is based on the initial assessment by these personnel. It was reported that the company recently obtained a score of 98.2% from external auditors on Health and Safety. However, the union representative told the delegation about an incident where a fellow female worker fell on the floor and the ambulance was not called until the colleague had to be taken to hospital by her daughter. The Risk Manager told the delegation that the ambulance was called but took too long to arrive. As a result of learning from that incident, said the risk manager, the company is now using services of private ambulances and private hospitals.
With regard to Corporate Social Investment (CSI), the company reported that it has set aside R55 million for projects nationally. The Bloemfontein store sponsors 36 local crèches. The company offers bursaries to staff members and to children of staff members. The company currently funds three staff members who are pursuing B Com degrees through UNISA. The company also reported that it offers a Retail Management Programme to selected staff members through its virtual university, Makro Corporate University. This is a SAQA accredited programme on NQF level 6 and there are currently three employees on this programme. The manager assured the delegation that all six employees are guaranteed management positions on completion of these programmes.
8.1. Committee Recommendations
The Committee made the following recommendation:
- That the Department of Labour follows up on the alleged case of unfair dismissal; and
- The case of an alleged injury on duty should be reported and followed up by the Provincial Department of Labour, which accompanied the delegation.
After concluding the Makro visit, the delegation proceeded to the Lohan Civils Construction project in Bergman Township.
- Visit to Lohan Civil Construction project in Bergman Township, Bloemfontein
The delegation was received by the Site Manager who informed them that the purpose of the project is to build 128 toilets in the Bergman Township. The 70 excavations were done two weeks prior to the visit by the delegation. The workers were filling the excavated sites with gravel when the delegation visited the project. The Manager informed the delegation that the project was at its initial stages. In attendance was the Community Liaison Officer (CLO) and the branch chairperson of South African National Civic Organisation (SANCO).
The project employed approximately 25 workers, most of whom from the local community. Workers were provided with personnel protective equipment (PPE). However, one worker was found operating the compactor without the ear plugs. The delegation was informed that workers are paid R150 per day and they work Monday to Friday from 8am to 4pm. Lohan Civil works with Iliso Construction, which is responsible for drawings while Lohan execute the project. The project that the delegation visited employed 12 employees, six of whom are from the locals and the other six came with the contractor.
The site manager informed the delegation that the project has a full time safety officer on-site and the safety audit conducted a day before the visit by the committee scored the project 95%. The project managers work close to the community through the ward councillor since this is a government sponsored project. The project source labour through the community liaison officer, who recruit from the local community. On recruitment, workers sign contracts and are subjected to a fitness test. The potential workers are also expected to undergo a medical examination. The contractor has sub-contracted the actual building of toilets and plumbing. The Councillor already provided company profiles of potential sub-contractors to the project manager. The Manager would evaluate the profiles and select four companies to build the actual toilets and do plumbing.
9.1. Committee Recommendation
The Committee made the following recommendation:
- That the Community Liaison Officer (CLO), in consultation with the ward councillor and other community organisations, should work closely with the Construction company in order to ensure that the employment opportunities do benefit the community from this government sponsored project;
- OVERALL RECOMMENDATIONS
The Portfolio Committee on Labour recommends that the Minister of Labour consider the following:
- That the Inspectorate of the Department of Labour considers serving notices and conducting inspections at all workplaces in the provinces and not wait until the Portfolio Committee decides to conduct oversight.
- That employment of women be taken seriously at all workplaces, to reflect the employment equity regulations.
- That the Department of Labour conduct workshops and advocacy campaigns to educate workers on their rights and resources available to them.
- That the Department of Labour engage the Department of Health regarding availability of Emergency Medical Services for injury on duty cases.
The Department of Labour should report back to the Portfolio Committee on Labour on progress made with regard to the above-mentioned recommendations within one month after the report has been adopted in the National Assembly.
Report to be considered.
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