Solidarity today sent four requests to Pravin Gordhan, minister of finance. Among other things he was asked for relief for the South African taxpayer and for clear signs of fiscal responsibility in his budget speech on Wednesday.

According to Dr Dirk Hermann, deputy general secretary of Solidarity, hardworking South African employees and the owners of small businesses are fed up with being drained of their hard-earned money. “Too often the money ends up in the pockets of politically connected persons and is frequently misappropriated.”

“Since 2006 the state budget has doubled nominally, partly as a result of increases in education spending. If one considers South Africa’s government spending on training, expressed as a percentage of its total GDP, the South African government is spending even more on training than the governments of Brics countries such as Brazil, Russia and India. In 2009 the South African government spent 5,4% of the South African GDP on training, while, in the same year, its Brazilian, Russian and Indian counterparts spent 5,1%, 3,9% and 3,1% respectively,” Hermann said.

Despite the state’s growing spending on education, quality teachers and training are still not the result and the demand for private education is growing year after year. Private institutions are gradually replacing underperforming institutions of state education. “The number of private schools and private school attendance in South Africa rose sharply between 2003 and 2008. While private sector pupil growth recorded across the country, the Eastern Cape recorded the largest percentage increase (168%) and black private sector pupils there increased by 185,5%. These sharp increases, in the very provinces where the state’s school system has largely failed, is indicative of pupils’ and parents’ trust in the private-education sector. Gordhan’s budget speech should therefore provide for encouragement and support for training by private institutions.

Solidarity also expressed concern since it would appear that President Zuma’s major infrastructure expansionary projects are to be driven almost exclusively by the public sector, with huge implications for public debt. The trade union felt that Gordhan should restrict public debt and proposed a general tax reduction. “For true, sustainable growth in the economy a general tax reduction is required, and government should display more fiscal responsibility on the expenditure side.”

 Solidariteit se begrotingswenke (ENG)

Piet le Roux

Senior economic researcher: Solidarity Research Institute

Solidarity maintains that the restructuring is nothing but a process of retrenchment, as numerous Solidarity members have already been asked to leave Absa’s premises after the company held discussions with them without notifying the trade union in advance. The trade union has still not received any additional information about the planned restructuring, although Absa has already entered into consultations with the majority trade union, Sasbo. According to Marius Croucamp, Solidarity spokesperson, section 189 of the Labour Relations Act stipulates that a company must consult with all trade unions representing members who may be affected by possible retrenchments, regardless of the number of members the unions represent in that company.

“If Absa continues to exclude Solidarity from the consultations, it will not only be violating section 189, but also depriving its employees from their right to freedom of association,” says Croucamp. “Meanwhile, Absa employees are under immense pressure, as their future at the company is uncertain,” he adds.

Moreover, Croucamp says the process may have started off one-sidedly, that is, without Solidarity having been consulted, but it could still end favourably and without the trade union taking further action.

Marius Croukamp

Spokesperson: Solidarity

“The key to any economic position is to consider both what is seen and unseen. We are pleased that this report highlights those often unseen advantages of private mining along with the seen benefits,” explains Piet le Roux, senior economic researcher at the Solidarity Research Institute (SRI).

Trade union Solidarity therefore also today welcomed Mineral Resources Minister Susan Shabangu’s reiteration of her stance that South African mines will not be nationalised. However, Solidarity maintains that the recommendations in the ANC’s report on the mining industry, which recommends a tax of up to 50% on super-profits and far-reaching intervention in the mining industry, will, like the debate on nationalisation, handicap the industry.

According to Le Roux, the report highlights, among other things, two critical aspects. “Firstly, it is important to recognise that the mining industry, to a large extent, belongs to ‘the people’ due to their indirect shareholding in it through instruments like pension and provident funds. It is estimated that up to 6,5 million people are already co-owners of the mining industry through this mechanism.”

“Secondly, the report indicates that consumers derive ample benefits from the mining industry, even if they don’t have a stake in the means of production. In an economic sense, consumers derive the most benefit from the private mining industry, as they have daily access to resources that are more affordable than ever before in the history of mankind. This aspect is often ignored,” says Le Roux.

The report lastly points out that Solidarity believes that a complementary relationship is possible between employers and employees. “For this reason, both Solidarity’s members and other employees, through the value they add, as well as the employers and owners, through the leadership and capital they provide, jointly deserve recognition for the benefits of the mining industry. Solidarity hopes to maintain this complementary relationship in the turbulent times that appear to lie ahead,” according to Le Roux.

Download the report at www.solidarityresearch.co.za or click here.

Piet le Roux

Senior economic researcher: Solidarity Research Institute

According to Theunis van Staden, Solidarity’s negotiator at the bargaining council, all the agricultural companies in the council attributed their excellent financial results to their employees’ “commitment”, “motivation” and “expertise” in their annual reports. “The employers now have the ideal opportunity to suit actions to words by financially demonstrating their gratitude for employees’ contributions to their success,” Van Staden added.

In particular, Solidarity has deplored the wage offer of South West and MGK of only 5%. “The offer is a slap in the face for employees, hardly matching the current inflation figure. Meanwhile the executive directors of South West and MGK have received remunerations of respectively R11,4 million and R8,1 million in 2011. If the current dispute round at the bargaining council is to end in a deadlock, the possibility of a strike cannot be excluded.”

Solidarity has referred the wage dispute to the Grain Bargaining Council, but a date for a dispute meeting has not yet been determined. Solidarity represents members at the following agricultural companies in the Grain Bargaining Council: GWK, OVK, MGK, Senwes, NTK, South West, NWK and VKB.

Moira-Marie Kloppers

Spokesperson: Solidarity

According to Piet le Roux, senior economics researcher at the Solidarity Research Institute (SRI), Zuma’s dismissal of nationalisation in favour of a so-called “mixed economy” is cause for concern about the future of the mining industry.

“Certainty about property rights is a cornerstone of a peaceful and prosperous society. What the President has in mind with a mixed economy undermines property rights and, therefore, poses a real threat to the prosperity of almost all South Africans.

“The present notion of a mixed economy is probably inspired by the growth achieved in recent times by former communist countries such as China, a growth that was seemingly state led. We are, however, concerned that the ANC and the President believe that such growth must be attributed to state intervention, while the improvement in those countries is actually the result of a decline in state intervention following their introduction of significant free market reforms from the late 1970s onwards.”

According to Le Roux, it is not surprising that, in its draft report, the ANC commission tasked with investigating state intervention in the minerals sector (SIMS) rejects outright nationalisation.

“This policy position offers no grounds for complacency, however. The underlying interventionist thinking, which led to the call for nationalisation – and the current call for a so-called mixed economy ‒ is still as entrenched as ever in the ANC. Indeed, the SIMS commission finds, as we predicted, that nationalisation is but one instrument by which the ANC can achieve its goals.

Moreover, as even the SIMS report acknowledges, mineral resources have already been nationalised by virtue of the Mineral and Petroleum Resources Development Act of 2002. This offers the necessary leverage in terms of which wide-ranging state intervention in the mining industry can and does occur. The proposed merging of BBBEE, state and trade union ownership into a single so-called “special purpose vehicle”, with a minimum joint holding of 30% of voting shares in mining companies by BBBEE and state shareholders, is indicative of such stepped-up state intervention, and is cause for concern.”

During the past six months, the SRI has undertaken two studies on the issue of nationalisation. The first, entitled Building on no foundation – the logical incoherence of nationalisation and its interventionism, has already been submitted to the relevant ANC commission last year. (Click here to read the report.)

In that study, it was predicted that the ANC commission was likely to reject nationalisation, but would, instead, recommend something not essentially different.

“While the SIMS commission appears likely to end up not recommending nationalisation, it cannot – given its terms of reference which call for interventionist proposals – present objections to nationalisation other than those based on technicalities. While such objections may subsequently be heeded by the ANC, it seems likely that nationalisation will only be rejected in favour of something not essentially different. In this respect, the commission’s research programme is indeed aptly named the State Intervention in the Minerals Sector Project”, the report states.

The SRI also cautioned against the ANC commission’s superficial, technical approach to the investigation, which passed over fundamental questions about the essence of their project.:

“To jump straight to technical questions would be to risk endless discussions about various kinds of nationalisation – whether or not [a specific kind of nationalisation] has positive results – instead of asking whether interventionism (of which nationalisation is but one example) can hold its ground as a durable answer to whatever problems are experienced in society. Such a debate (on the various kinds of nationalisation) would not address the ANCYL or Solidarity’s concerns and would not give the ANC greater clarity on some of the most fundamental questions about the nature of society and whether and how its observed characteristics can be influenced.”

According to Gideon du Plessis, Solidarity’s Deputy General Secretary, this study should be an important point of reference in the debate on nationalisation and state intervention in the South African economy.

In a second study, to be released by the SRI on Thursday, 16 February, the institute focuses on the private mining industry’s benefits to employees, shareholders and consumers.

“In times when talk of nationalisation is commonplace, and when the owners of capital are often casually denounced, it is not uncommon to come across highly negative treatments of the mining industry. Exposure to these sentiments might create the impression that the mining industry benefits only a few, already rich owners, and that for the rest it is responsible for too few jobs, inequality, ecological ruin, an undermining of community vitality and any number of other ills.

“But such a one-sided and often inaccurate treatment obscures the modernising and wealth-creating effects of an industry on which much of our modern standard of living rests. Because Solidarity believes that relations between employers in the mining sector and mine workers can be mutually beneficial, the Solidarity Research Institute undertook a brief study to serve as a reminder of the benefits of the mining industry.”

The first study is available on the website www.navorsing.co.za and the second will also be available from 16 February.

Piet le Roux

Senior economics researcher: Solidarity Research Institute

Dr Dirk Hermann, deputy executive head of Solidarity, has welcomed the president’s honest admission of numerous crisis situations the country is burdened with presently, like crime, unemployment and electricity shortages. “It was good to hear the president admitting that municipal service delivery is still not on a desirable level.” However, the trade union has expressed its dissapointment with the way in which the president identified some problems without presenting appropriate solutions. “With regard to crime, skills shortages and the pressure that is put on the rights of minoroties in South Africa, President Zuma did not bring forward any significant new solutions.”

Solidarity has also expressed its dissapointment with Zuma’s unsound stance on nationalisation and other radical state interference, especially in the mining industry. “The issues of nationalisation and state interference had already caused a stir in the last couple of years and caused grave concern among interested parties, especially in the mining industry. The State of the Nation Address was a golden opportunity for the president to confirm the announcement of Susan Shabangu, minister of mineral resources, that South African mines will not be nationalised. It is regrettable that the president did not use this opportunity to prove to existing and prospective investors in South Africa that the country is still a business-friendly investment destination that hold the right of ownership in high esteem.”

Meanwhile, Solidarity is of the opinion that the president anchors his economic approach in the idea that the state should be the central role player in the economy, with the ultimate goal of ensuring equal outcomes, rather than equal starting points. In spite of the president’s fine intentions, the trade union is of the opinion that this economic approach leads to increasing poverty, rather than increasing prosperity.

“We welcome the president’s plans to invest in big infrastructure projects, but are worried about the emphasis on empowerment instead of the development of South Africans through education to increase appointments based on merit.” Solidarity has advised the president not to persist in making civil service appointments only on the basis of affirmative action objectives and has warned that the trade union will continue its lawsuits by reason of the unfair implementation of affirmative action in the civil service. “Appointments on merit is the only way to improve service delivery in South Africa.”

According to Hermann, it is good that Zuma congratulated the matriculants who excelled in the examination of 2011. “None the less, South Africa’s education problems have unfortunately been underplayed. Especially the low pass rate in physical science and mathematics is worrying. These subjects are essential for further studies in scarce professions and if one looks at the low pass rates, it is not surprising that South Africa’s skills problems only increase year after year.”

The marks that have been awarded to the president are the following:

Dirk Hermann

Deputy executive head: Solidarity

Solidarity today called for the inclusion of white people with disabilities in all forms of empowerment aimed at curtailing unfair discrimination during a presentation to the Minister of Trade and Industry, Rob Davies. Solidarity wants to put a stop to the increasing exclusion of white people with disabilities from empowerment and therefore lobbied for the inclusion of this group in all definitions in legislation regulating empowerment.  

The deadline for commenting on the proposed amendments to the BBBEE Act was today.

White people with disabilities are currently included in the definition of the designated group in the Employment Equity Act which regulates affirmative action, but have already been removed from the BBBEE Act’s definition of the designated group. According to the new amendments, the definition in the BBBEE Act carries more weight and will apply if tension arises between the two Acts’ definitions of the designated group.

What this means in effect is that if a company employs a white person with a disability, it will not earn points for its BEE scorecard. If the company appoints a well-off black person without a disability, it will earn points for the appointment in terms of the BBBEE Act. If a white person with a disability sues the company in terms of the Employment Equity Act, the BBBEE Act’s definition of the designated group, which excludes white people with disabilities, will apply.

This proposed amendment to the BBBEE Act comes after a regulation of the Preferential Procurement Policy Framework Act, which excludes  white people with disabilities from the designated group, was adopted in December 2011. In terms of the regulation in question, the designated group will be determined by the definition of this group in the BBBEE Act, which excludes white persons with disabilities. Therefore, the state has effectively kicked white people with disabilities out of empowerment legislation in December last year.

“People with disabilities are part of the disadvantaged group on the basis of their disability and not as a result of their race,” explains Dr Dirk Hermann, Deputy General Secretary of Solidarity. “The paradox here is that white people with disabilities were removed from the definition of the designated group on the basis of their race and not their disability. Black people with disabilities are still included in the definition of the designated group, however, and special provision is made for them on the grounds of their disability.”

In terms of the Employment Equity Act’s code of good practice on the employment of people with disabilities, people with disabilities are not unfairly discriminated against on the basis of their race, but because of ignorance and stereotypes about disability.

The code furthermore determines that the following comes down to unfair discrimination against people with disabilities:

• “Unfounded assumptions about the abilities and performance of job applicants and employees with disabilities;
• Advertising and interviewing arrangements which either exclude people
  with disabilities or limit their opportunities to prove themselves;
  • Using selection tests which discriminate unfairly;
  • Inaccessible workplaces; and
  • Inappropriate training for people with disabilities.”

“These forms of unfair discrimination apply equally to white and black people with disabilities. The exclusion of white people from empowerment is turning South Africa’s empowerment process into a purely racial process instead of a bona fide anti-discrimination process,” says Hermann.

 Comments on the BBBEE Amendment Bill – Solidarity

Dirk Hermann

Deputy General Secretary: Solidarity

“SITA not only refused to release the criteria that were used to declare certain positions “redundant”, but also changed its employees’ conditions of service unilaterally. A unilateral amendment of conditions of service, without prior consultation with employees, is unfair in terms of common law and comes down to breach of contract,” says Marius Croucamp, Solidarity spokesperson. “A restructuring process is a common precursor to retrenchments and is often used by employers as a means to limit forced retrenchments. However, SITA is refusing to admit that retrenchments are on the cards. SITA’s refusal to release the criteria regarding the new job placements shows that it is not following a transparent process. Solidarity is keen to get involved in the consultations in order to act as a watchdog, ensuring that discriminatory criteria are not used,” he continues.

Meanwhile, SITA has denied that it is considering carrying out retrenchments and informed Solidarity by letter it is not consulting with the trade union, because it does not have collective representation in the organisation. “SITA’s written notifications to employees, stating that their positions are redundant, have already caused concern that retrenchments could ensue if the employees in question cannot be placed in other positions,” says Croucamp.

Croucamp stresses that section 189 of the Labour Relations Act is very clear. In terms of this section, a company who contemplates dismissing employees must consult any registered trade union whose members are likely to be affected by the proposed dismissals, regardless of the number of members it represents at that company. “Section 189 makes it clear that a collective agreement cannot be used to exclude members from other trade unions when employees’ jobs and income are at stake,” according to Croucamp. “Doing so would amount to a complete disregard for employees’ right to freedom of association,” he adds. “Solidarity has the right and a duty to support its members, regardless of their number, during the process and will do everything in its power to exercise that right,” says Croucamp. “If a transparent process is followed, the interests of all SITA employees and clients will be protected. If not, service delivery is sure to be affected negatively.”

* SITA employees who are affected by the restructuring and who want to join Solidarity in order to get the trade union’s support during the process, can send an e-mail to sita@solidariteit.co.za.

Moira-Marie Kloppers

Spokesperson: Solidarity

Solidarity spokesperson Ilze Nieuwoudt said the trade union requested consolidation of the four layoff processes in order to speed up the process and to shorten the time of stress and uncertainty for the employees. “Solidarity will investigate alternatives to the layoffs during the consultations and will seek to reduce the number of affected people,” according to Nieuwoudt. Sappi has meanwhile indicated its acceptance of the proposal, confirming that the consolidated consultation process would commence early in January.

The latest spate of layoffs was preceded by a restructuring process in the company’s human resources, buying and communication divisions during October and November this year. That process would have affected some 200 Sappi employees. Solidarity succeeded in limiting to only one the number of Solidarity members affected by the layoffs. Meanwhile the company had to lay off 156 employees earlier this year owing to the closing down of its Adamas mill.

“South Africa’s forestry and paper and pulp industries are under enormous pressure because the same products can be imported much cheaper, especially from China,” Nieuwoudt explained. Earlier this year the trade union already warned that the Sappi layoffs were probably only the beginning of a spate of layoffs at the company as well as in the industry. “However, the extensive layoffs which have now begun at Sappi came earlier than expected and the timing thereof, right at the start of the Festive Season and with the new school year coming up, is lamentable.”

Moira-Marie Kloppers

Spokesperson: Solidarity