may 2015 a concerted effort may_news.pdfenforcement agencies must rigorously enforce the country’s...

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SEIFSA NEWS | May 2015

INTRODUCING THESEIFSA SMALLBUSINESS HUB

REMINDER TO RENEWSEIFSA PRICE AND INDEX PAGES (PIPS) SUBSCRIPTIONSUBSCRIPTION

A CONCERTED EFFORTTO ADDRESS SOUTH AFRICA’SSTRUCTURAL CONSTRAINTS

NEWSS E I F S A

MAY 2015

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PublisherSteel and Engineering Industries Federation of Southern Africa (SEIFSA)

AdvertisingKristen [email protected](011) 298-9455

Editorial EnquiriesPrisha MaraisTel: (011) 298-9436 | Fax: (011) 298-9536 E-mail: [email protected] PO Box 1338Johannesburg, 2000

ISSN - 1560 - 9049

Circulation:3 300 (Not certified)Opinions expressed in the articles do not neces-sarily reflect the views of SEIFSA. Similarly, advertis-ing in this publication does not imply endorsement or approval of any such products or services by SEIFSA. While every attempt is made to ensure the accuracy and correctness of the information contained in this publication, SEIFSA accepts no li-ability for any losses or damages sustained through the use thereof. Articles may only be reproduced with permission.

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CONTENTS

HEALT

H, S

AFE

TY, EN

VIRONMENT &

QU

ALITY

SEIFS

A TRAINING CENTRE

CHIEF EXECUTIVE OFFICER 4

COVER STORY

A concerted effort to address South Africa’s structural

constraints 6

INDUSTRY NEWS

SABS achievement for West Rand Engineering (Pty) Ltd 9

Leading steel manufacturer attains global recognition 11

Introducing the SEIFSA Small Business Hub 14

SEIFSA WELCOMES NEW MEMBERS 8

INTERNATIONAL WATCH 12

SKILLS DEVELOPMENT & HUMAN CAPITAL

Performance management, can your company afford not to

implement? 16

Sulzer have wil-power 18

SEIFSA TRAINING CENTRE

SEIFSA Training Centre - New intake dates 19

ECONOMIC & COMMERCIAL

Reminder to renew SEIFSA Price and Index Pages (PIPS) subscriptions 21

HEALTH, SAFETY, ENVIRONMENT & QUALITY

Providing a safe environment free from risks to health - Just how

far should you go? 22

Accidents while travelling to and from work - Are employees

covered? 23

ALLIANCE PARTNERS

Managing HIV/Aids in your workplace 24

ENVIRONMENT NEWS

Sustainable energy future depends on renewables and

energy efficiency 25

How the energy crisis impacts on food security in SA 26

INDUSTRIAL RELATIONSWorking in time arrangements and public holidays – what does the Main Agreement require? 28Private employment sector body approaches Court for declarator on deeming provision 29

LEGALThe blurry line between the master and the servant 30

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CHIEFEXECUTIVE OFFICER’SDESK

The violence that flared out in some parts of the country against poor, African foreigners has been most unfortunate and deeply despicable. What started out with opportunistic attacks on foreign informal shop owners in some of the country’s townships and wide-scale looting of their properties in 2014 culminated in the terrible, barbaric violence visited upon fellow Africans in April, following irresponsible public utterances by a traditional leader in KwaZulu-Natal.

Yet again, the violence and mayhem claimed a number of lives, rendered children as orphans and badly damaged South Africa’s image abroad. Not surprisingly, a number of South African companies doing business in or with a presence in other countries on the continent were affected: business meetings in some of these countries were cancelled and, in some cases, their South African personnel had to be airlifted from those countries for their own safety.

Other South Africans, like musicians, were also affected, with their invitations to perform in those countries withdrawn. At the time of writing, South Africa is a skunk on the continent, with a number of protest marches staged in some countries on South African Embassies in those countries. Understandably, there is such palpable anger in many countries on the continent towards South Africa.

It would appear that our country never learned from the first incidents of xenophobia in 2008, when such attacks on poor African foreigners took place in and around the Johannesburg areas.

Why do we have these despicable incidents taking place in our beautiful country? There is a number of reasons for that – and xenophobia, as it is known

around the world, has nothing or little to do with it. Lest the canard becomes firmly rooted in people’s minds, it is important to stress that black South Africans do not fear or hate black foreigners. That is simply not the case. They have lived peacefully with and among them for years, going way back to the pre-democracy era.

That explains why professional Africans from a diverse range of countries on the continent study, work and live peacefully in this country, side by side with black South Africans. Generally, there is little or no resentment towards them from fellow professional black South Africans.

However, the situation is very different among poor black South Africans, most of whom remain deeply mired in poverty more than two decades into our democracy. Worse still, a significant percentage of them are unemployed – and struggle to get jobs in our under-performing economy. They develop resentment towards black foreigners living in their midst when they see the latter getting employed – or preferred – by local

CHIEFEXECUTIVE

OFFICER

Not surprisingly, a number of South

African companies doing business in or

with a presence in other countries on the continent

were affected

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companies ahead of them, running successful informal businesses and, therefore, living better lives than themselves.

Even then, in most cases they continue to live peacefully with one another, to fall in love and to (inter)marry one another. Some of the most popular football players in the country, who are idolized in various townships, come from Zimbabwe, Mozambique, Ghana or Nigeria – and they are all viewed as heroes.

Some, like the SABC’s Zimbabwean-born Peter Ndoro, are admired role models on television. When he passed away in a car accident early this year, Zimbabwean-born Top Billing presenter Simba Mhere was mourned like a hero almost by the whole country.

The problem, then, is not the fear or hatred of African foreigners per se. It is not Afrophobia. Instead, it is dire poverty, lack of economic opportunities and perceptions of foreigners being preferred by some employers when compared to poor, black South Africans. And, indeed, there are some employers – including many restaurants, garages and shopping malls – that add fuel to the fire by blatantly preferring desperate black foreigners to their local counterparts.

What is the solution? For a start, the Government needs to ensure that our borders are not porous and that only foreigners with skills that are in short supply in South Africa are allowed into the country, regardless of their race or country of origin. Secondly, the Government needs to act against companies employing foreigners as cheap labour, at the expense of South Africans with the same skills. Most importantly, everything possible has to be done to grow our economy so that it can absorb more people into the labour market.

Concomitantly with that, the country’s law-enforcement agencies must rigorously enforce the country’s laws, with all those behind the wave of violence against black foreigners apprehended and prosecuted. For as long as they can indulge in such wanton violence and get away with, that long will the problem continue.

Kaizer M. Nyatsumba

Chief Executive Officer

Metals andEngineeringINDABA

S o u t h e r n A f r i c a n

LAUNCH OF SMALL BUSINESS HUB

8 May 2015

POWERED BY SEIFSA

OPEN DAY16 Lancaster Road, Indutrial Sites, Benoni

15 May 2015

SEIFSATRAINING CENTREi n s p i r i n g e x c e l l e n c e

28 - 29 May 2015

28 May 2015

nOT-TO-bE-MISSED EVEnTS

Details available on www.seifsa.co.za

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This is a useful theme in trying to understand and explain the South African economy’s deteriorating growth pattern.

When the Bureau for Economic Research’s “political constraint” indicator (surveyed every month amongst manufacturers since the third quarter of 1987) is correlated with the country’s quarterly, annualised economic growth rate as measured by the South African Reserve Bank, an almost one-on-one correlation is revealed. The correlation with gross fixed capital formation is as disturbing.

All three indicators reached their peak between 2005 (20% of respondents “uncertain”) and 2007 (economic growth at near 6%). “Uncertainty” has been rising since, and neither elections nor new economic blueprints led to any significant improvement. These are ominous signs and call for renewed efforts to rebuild confidence.

The South African Reserve Bank has argued on several occasions that monetary policy cannot rectify the structural constraints in the economy and that domestic constraints are self-inflicted.

Since the 2014 Budget speech, the Ministers of Finance have signalled strongly that the task of fiscal consolidation cannot be postponed. This means that fiscal stimulation has run its course since the financial crisis, and that without growth recovering, the Treasury has no option but to cut back on spending. Not doing so would put the country at risk, thus destabilising financial markets, leading to downward adjustment of the country’s credit ratings and the danger of a debt trap. By default, Finance Minister Nhlanhla Nene said that fiscal policy can also not rectify the structural constraints in the economy.

It follows logically that a concerted effort should be made to adjust other policies to address these structural constraints and cast the budget and state-of-the-nation speeches in an entirely different light. Both touched on the medium-term development strategy (to be less energy and more labour intensive), industrial policy, lifting the infrastructure constraints, more stability in the labour market, education and giving agriculture a boost.

The solutions to each of these constraints can only be achieved over the medium to longer term.

A CONCERTED EFFORT TO ADDRESS SOUTH AFRICA’S STRUCTURAL CONSTRAINTS

COVERSTORY

Human nature is such that, at certain levels of uncertainty, it stands back and becomes passive – John Maynard Keynes (1883 – 1946)

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However, all the constraints contribute substantially to short-term uncertainty. Choosing both fiscal and monetary stability is the right way to go. However, can the short-term contradictory dilemmas (slow growth, large budget and balance of payments deficits, inflation, unstable industrial relations and serious infrastructure bottlenecks) and conflicting policy options be navigated at all?

These factors’ dynamic impact leads to low capacity utilisation and, therefore, high unit costs of production. This, in turn, means low profit margins and very little investment. It is estimated that a third of the already low investment spending is channelled to risk aversion against energy constraints, water disruptions and crime prevention. Businesses have no choice but to keep larger reserves to cater for unforeseen shocks. Weak growth performances are, therefore, unavoidable.

Taken on its own, South Africa’s fiscal credibility as an objective seems to be correct, but the logic to achieve it is fraught with risk. It is premised on domestic economic growth resuming, and it in turn depends on export growth recovering. The latter seems to rely more

on the rand exchange rate weakening than on volume growth, and therein lies the first contradiction.

The SARB is hawkishly guarding the value of the currency, with the focus firmly on inflation. However, the level of the exchange rate is linked to funds flowing in and out of the country, which in turn depends greatly on international capital movements, and specifically US monetary policy. It is highly likely that South African interest rates will rise the moment US monetary authorities start with their tightening cycle, keeping the rand on an even keel, thus countering the hope of a weakening exchange.

Secondly, world economic and trade growth are both weak, which means that demand for SA products will stay subdued and SA export markets highly contested. Thirdly, domestic exporting sectors are highly electricity intensive and production of traded goods is severely constrained by the shortages.

The measures taken to achieve fiscal credibility leave doubt that there is a plan to break the low-growth, government-deficit and tax-increasing cycle. The productive sectors of the economy will be hardest hit by the current policy stance, which has wiped out the low oil/fuel price windfall, and administered prices (electricity) are fuelling inflation anew. Most of the tax announcements will be passed through to consumers, thus harming consumption growth even further. All indications are that the tax burden will increase in future.

The impetus for economic growth can only come from either higher internal demand or higher demand for our exports. Domestic demand growth must come from government consumption expenditure expansion, consumer-led growth or investment spending. Private sector investment spending has been stagnant.

Continues on page 8...

All the constraints contribute substantially

to short-term uncertainty. Choosing both fiscal and

monetary stability is the right way to go

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SEIFSA WELCOMES nEW MEMbERS

The following companies became members of associations federated to SEIFSA during March 2015.

Edo Management Systems SEIFSA Associate Membership

Govender Aluminium & GlassLight Engineering Industries Association

Grand Tellumat Manufacturing (Pty) Ltd (GTM) Cape Engineers and Founders Association

Hi-Tech Technical Services ccLift Engineering Association of South Africa

Legacy Labour Consultancy (Pty) Ltd SEIFSA Associate Membership

Magnitech (Pty) LtdLight Engineering Industries Association

MJB Road Freight (Pty) Ltd SEIFSA Associate Membership

ML Labour Consultants (Pty) Ltd SEIFSA Associate Membership

SWC LiftsSouth African Engineers & Founders Association

Public sector investment improved in the areas of water, electricity and gas provision, but the production performance of sectors that should have benefitted from

these projects is very mixed. The spending might have taken place, but the benefits have not been flowing through to the domestic economy as envisaged.

Electricity is a long-term, structural problem which will not go away, even when Medupi and Kusile are completed; SA will still have less capacity then than it does now due to the ageing of infrastructure.

It seems as if the long-term future of the mining and manufacturing sectors is tied together by the notion of “beneficiating our minerals”. Energy is the binding constraint – such sectors will not be supported, although they are the foreign exchange earners. Industrial action spreading contagiously among sectors has the potential of wiping out half the GDP growth performance.

Policy instruments are limited: a free-floating exchange rate, a highly-traded

currency and not enough reserves to protect it, yet monetary policy has to be in sync with international cycles, otherwise running the risk of triggering capital flight. World Trade Organisation agreements prescribe low tariff protection and forbid open incentives for exports. Enterprise development seems an option, barring fiscal constraints.

Despite the highest allocations of GDP for education in the world, SA is not delivering sufficient, high-level human capital needed for growth. Skills intensification is needed to increase competitiveness and enable the use of more sophisticated machinery and equipment. This is yet another binding constraint.

SA’s future will be determined by our competitiveness and openness because of our dependence on world markets and capital for prosperity. Only optimum policies will bring us closer to reducing unemployment. We need to take decisions that will lead to such an outcome in the short and long run.

Henk Langenhoven, SEIFSA Chief Economist

COVERSTORY

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West Rand Engineering (WRE) has been a member of the South African Engineers & Founders Association that is federated to SEIFSA for well over forty years and are pioneers in the manufacture of mining products.

The company was established in 1928 and has grown together with South African industrial development. WRE was also co-opted by the Allied forces during the Second World War for the manufacture of armaments.

In 1993 the company joined the South African Bureau of Standards (SABS) and committed themselves to producing quality products of the highest standards in line with ISO specifications.

As a reward for their continuous efforts in, amongst other things, training and skills development, they have been awarded with a 20 year certificate of loyalty, commitment and compliance to the SABS Quality Management Certification Scheme.

SABS ACHIEVEMENT FOR WEST RAND ENGINEERING (PTY) LTD

Managing Director Mr Shaun Basel

INDUSTRY NEWS

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For 90 years, SCAW, a South African industry leader, has been a preferred supplier to the construction industry. Whether it’s hoisting, reinforcing or excavating, Scaw produces an extensive range of products that drive safety and productivity in construction projects.

From wire & strand products, Haggie® Steel Wire Rope, chain products or construction specifi c steel, Scaw continues to design and deliver the highest quality products to customer specifi cations.

Highly qualifi ed teams with extensive experience in all aspects of the application of our products are on call to advise and support the selection, handling, installation and maintenance of products vital to driving safety, productivity and profi t in the construction industry.

www.scaw.co.za

Experience Matters.

A trusted industry leader

S13

924

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INDUSTRYNEWS

The Scaw Metals Group, a leading steel and steel product manufacturer, has recently received DNV accreditation at its Cape Town branch to certify its wire rope slings and attachments in accordance with DNV specification 2.7-1. under direct authority from DNV-GL.

DNV-GL is acknowledged as one of the world’s leading certification bodies offering the latest in management systems certification services.

This ground-breaking achievement, together with the existing DNV type approval of Scaw’s Chain Division (Mckinnon®), re-enforces Scaw’s position as a leading quality supplier of products to the maritime and lifting industries worldwide.

The accreditation holds significance as the increasing offshore and marine industry along the West, South and East coasts of Africa, requiring lifting slings to be certified by an accredited body prior to delivery. Further to this, it benefits Scaw by allowing their clients to now purchase lifting equipment in the full knowledge that it complies with the stringent requirements of the DNV specification, as well as receive a DNV certificate issued by Scaw. The Type Approval of Scaw Chain division and their primary supplier, Crosby Europe, for

LEAdINg STEEL MANuFACTuRER ATTAINS GLOBAL RECOGNITIONScaw Metals group is a member of the Iron and Steel Producers Association of South Africa and the South African Engineers & Founders Association that are federated to SEIFSA.

components used in the manufacturing process further compliments this achievement.

“The accomplishment is the perfect platform for us to show our high-quality products to our industry counterparts and gives the organisation a competitive standing alongside global players,” Scaw Metals Chief Executive Officer Markus Hannemann said.

Management applauds the Cape Town branch for their commitment of taking a major step in driving the organisation to become more efficient. The Scaw Cape Town branch set itself a target to achieve this recognition in view of the benefits it could derive in the oil industry.

The branch management team under the guidance and dedication of its Rigging Superintendent embarked on the journey to achieve this target. It required every component of the lifting set to be analysed and tested in accordance with the DNV requirements.

George Katergarakis, Executive Head of Sales and Marketing said, “We are truly impressed with what the branch has achieved, as it sets the tone for the customer’s peace of mind through quality assurance and faster delivery turnaround time.”

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CHINA CHINA PLANS TO SUBSIDISE IRON ORE MINERS AFTER PRICE SLUMP

China is drawing up plans to subsidise its struggling iron ore sector with many high-cost mines forced to shut as a result of a collapse in global prices.

China, the world’s biggest steel producer, has long been worried by its growing dependence on foreign miners and has tried to maintain a level of self-sufficiency in the key raw material, but its mines have been unable to compete with massive low-cost producers in Australia and Brazil.

Iron ore prices have fallen around 60 per cent since last year after a concerted effort by major producers to expand output and boost market share. The glut has been compounded by an economic slowdown in China, by far the world’s biggest consumer.

According to data from the Metallurgical Mines Association of China (MMAC), around three quarters of China’s iron ore mines incurred losses in 2014 as a result of the price slump and many smaller producers have already halted operations.

Apparent consumption of domestic iron ore fell more than a third to 205.86 million tonnes last year, according to industry consultancy, Custeel. China’s import dependency last year rose 9.7 percentage points to 78.5 per cent, according to the China Iron and Steel Association.

Global miners such as Brazil’s Vale and Australia’s Rio Tinto and BHP Billiton have mapped out a seven year plan to add 430 million tonnes of new supply onto the sea-borne market by 2020.

The miners were banking on sustained steel demand growth in China, especially in the less developed central and western regions, but Chinese steel production could already have peaked, a senior industry official said last month.

Reuters

INDIA NMDC KEEPS APRIL ORE PRICES UNCHANGED

State-run National Mineral Development Corporation (NMDC), which had cut the price of iron ore in the previous two months, has decided not to reduce prices of the mineral in April, hoping for a spike in demand from domestic steelmakers.

The iron ore miner, which reviews prices every month depending upon the demand-supply scenario and prevailing prices in markets, had in the last two months slashed the cost of lumps and fines by 950 rupees a tonne and 600 rupees a tonne, respectively on weak demands and softening global rates.

NMDC was selling lump ores, which has higher iron content, at 3,250 rupees a tonne and fines, which contains less iron, at 2,460 rupees per tonne in March.

“There has been no change in the price for April,” a senior NMDC official stated.

Domestic steelmakers, however, were hoping for a third consecutive rate cut in as many months as the price of the key steel-making raw material nosedived to its decade-low in early April to $47 a tonne globally, mainly due to a supply glut and subdued demand from China, the largest consumer of the raw material in the world.

“NMDC should have affected the third cut at least for fines. Globally, prices have fallen once again. It should have been reflected in the prices of NMDC,” a west-coast based steelmaker said on condition of anonymity.

The stiff cut in the prices for the two months in a row of the January-March quarter of 2014-15 might cause a huge impact on NMDC’s realisation leading to a squeezed bottom-line. Sources said NMDC’s production and sales remained nearly flat in 2014-15 compared to a year earlier to stand at around 31 MT and 30.5 MT respectively. NMDC is yet to make the numbers public.

Caught in a double whammy of galloping imports and subdued domestic consumption, the Indian steelmakers are passing through a rough weather. Steel imports to India grew by a whopping 71% while consumption grew by 3.1% last fiscal over the previous fiscal.

Financial Express

INTER-NATIONAL

WATCH

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AUSTRALIA IRON ORE PRICE ROUT SET TO PERSIST AS EXPERTS TURN ULTRA-BEARISH

Citigroup (Citi), the multinational banking and financial services corporation, has slashed its iron ore price forecasts for the next three years hours after Australian officials warned on the outlook for the country’s biggest export.

In a note entitled ‘End of the Iron Age’, Citi said it expects average iron ore prices to be US$45 a tonne this year – lower than its previous US$58 estimate.

Citing over supply and weak demand, the broker’s commodity analysts added that they expect 2016/17 prices to stay around the US$40 a tonne mark. The bearish numbers came after comments by Australian Treasurer Joe Hockey, who expects plunging prices of iron ore to reduce the country’s revenue forecasts by A$25bn (£13bn; US$19bn) over the next four years.

“There seems to be no floor, we are contemplating as low as US$35 a tonne,” Hockey told Australian reporters before European markets opened for business.

He added that every fall of US$10 in the price of the ore cost the Australian economy A$2.5bn in revenue and that new taxes would be introduced to compensate for the losses.

Mining of iron ore is dominated by the likes of BHP Billiton , Anglo American and Rio Tinto – all of which have been downgraded by Citi.

“The reduction in our target prices and the change to our recommendations are largely driven by the iron ore price downgrade, although other commodity prices have also been lowered, including coking coal,” said Heath R Jansen, global head of Citi’s metals and mining research team.

“The key change is a cut to our short and medium term outlook for the iron ore price which we now expect to average $45/t in 2015 and $40/t in 2016.

“Under this backdrop we believe the upside in the sector is now capped, however the downside is being protected by dividend yield.” UBS, meanwhile, said today it expects iron ore to suffer a “super down cycle” and cut its forecast to US$50 a tonne from US$59 for this year and lowered targets through to 2019.

Proactive Investors

SINGAPORE EASTERN CHINA MILLS CUT FERROUS SCRAP BUYING PRICES AGAIN

Steel mills in eastern China have further cut their ferrous scrap buying prices as rebar and iron ore prices continued to go down.

Maanshan Iron & Steel (Magang), the largest steel producer in eastern China’s Anhui province, cut its buying price by Yuan 30/metric ton ($5/mt) on falling rebar and iron ore prices, a company source said.

After the adjustment, Magang will pay Yuan 1,610/mt including VAT, delivered to Maanshan, for plate cut-offs with a thickness of 6 mm and above.

This was the mill’s seventh reduction since the Lunar New Year holidays, representing a drop of Yuan 180/mt in total.

“It shows a bleak outlook for the coming quarter as rebar and iron ore futures have been sliding. Scrap prices have also been dragged down by falling rebar and iron ore prices in the spot market,” said the source from Magang.

Magang cut the price after China’s largest scrap consumer, Jiangsu Shagang Group, in April lowered its buying price by Yuan 30/mt, taking the price of heavy melting scrap 6 mm and above to Yuan 1,550/mt including VAT, delivered to Zhangjiagang, Jiangsu province, according to one of its suppliers. The company has cut its buying price seven times for a total reduction of Yuan 170/mt since March.

Yonggang Group, also in Jiangsu province, cut its buying price by the same amount with the price of high quality heavy melting scrap at least 8 mm thick at Yuan 1,610/mt, including VAT, delivered to Zhangjiagang.

The mill has made three cuts for a total amount of Yuan 80/mt since it returned to the market in mid-March.

“Scrap prices might further go down if rebar and iron ore prices continue on the downward trend,” said a source from a Jiangsu-based mill.

Platts

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SMALLBUSINESS

HUB

If the contribution of SMEs is to be sustained, new SMEs will have to be created as these form a basis from which an economy can expand and stimulate accelerated and socio-economic growth, development and job creation (Fatoki, 2012).

The SBH agrees that SMEs are a backbone of South Africa’s long-term economic growth. According to the Department of Trade and Industry, an estimated 2.8 million small businesses that made up the sector in 2012 contributed between 52% and 57% to South Africa’s Gross Domestic Product. During that period small businesses also provided about 61% of the country’s employment. However, these figures are still far less than the average in developed countries where SMEs play a far bigger role in the economy. This can be attributed to structural challenges, including labour laws, access to finance and red tape that continue to hamper the growth of small businesses in South Africa. It is against this backdrop as well as the fact that more than 50% of the SEIFSA membership base is made of SMEs, that SEIFSA saw a need to establish the SBH.

In addition to being an enabling engine designed to assist SMEs reach their full growth potential through tailor-made products, services and solutions, the objectives of the SBH are to:• Provide cost effective products and services

addressing overall needs of SMEs;• Create alliances with outside partners to strengthen

the SEIFSA small business proposition;• Offer cost effective support services that are sector

focused and related to SME categories (micro and small);

• Identify sector and company specific challenges, monitor trends and develop specific interventions to improve SME performance;

• Identify and enhance the functioning of SME support and offer industrial relations, economics and commercial, safety, health, environment and quality, and human capital and skills development services tailor-made for SME needs;

• Identify, simplify and facilitate opportunities and linkages to business development and financial services in order for SMEs to maximise productivity,

INTROduCINg THE SEIFSA SMALL BUSINESS HUB

POWERED BY SEIFSA

The SEIFSA Small Business Hub (SBH) is a division of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), created to specifically address the needs of small and micro enterprises (SMEs) in the metals and engineering industries and beyond in order to contribute to the growth of the sector and the South African

economy as a whole, resulting in creation of jobs through SME development.

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profits, support job creation and achieve economic growth;

• Ensure a reduced rate of failure of SMEs through proper coordination of support services that are deemed accessible and cost-effective;

• Lobbying for and representation of SMEs’ interests at various committees and forums.

The SBH will have a website with useful information for SMEs and will be launching on 8 May 2015. To reserve your seat at the launch, visit the SEIFSA website on www.seifsa.co.za or contact Ms. Charlene Lynch on telephone: 011 298 944, Email: [email protected]

PRODUCT AND SERVICES

With ‘hand holding’ being paramount to the provision of services by the SBH, the SBH aims to be a “one stop shop” to SMEs, by providing the following solutions to start-up and existing SMEs:

1. Accounting and Advisory services• Monthly management accounts (including detailed

report on performance)• Annual financial statements• Budget preparation (including Capex funding

opportunities)• Structuring of reporting systems for optimum

decision making• Implementation and advice on appropriate

accounting packages• Structuring of accounting/administration units• Tailor made financial courses to suit business

requirements

2. Statutory compliance• Monthly filing with SARS (PAYE,SDL,UIF & VAT)• Provisional and annual tax submission• Tax clearance certificates • General tax advice• Annual CIPC returns• Department of Labour Returns (ROE)• Company registrations (CIPC)

3. Information Technology (IT) solutions for SMEs• Website development• Website hosting• Essential IT products for start-ups• Business connectivity• Innovative IT solutions for SMEs i. IT convergence ii. IT auditing iii. IT budgeting

4. Procurement of Funding • Drafting of comprehensive business plans (including

financial model, location analysis, marketing strategy)

• Submission of application for finance to relevant financiers

• Liaison with relevant financiers

5. B-BBEE services• Broad-based Black Economic Empowerment

(B-BBEE) exemption certificates (for entities below the R10 million annual turnover threshold)

• B-BBEE consulting services (for entities above the R10 million annual turnover threshold)

i. Strategies on how to improve B-BBEE rating ii. Assistance with preparation for verification

(document review and collection)

6. Services from the existing SEIFSA departments: Industrial Relations; Economics and Commercial; Safety, Health, Environment and Quality (SHEQ); Legal and Human Capital and Skills Development

THE SEIFSA SMALL BUSINESS HUB TEAM

Strategic Partners

In addition to the internal expertise, the SEIFSA SBH will be entering into strategic partnerships with a number of development finance agencies, government’s small business development organisations as well as private sector institutions for the benefit of SMEs.

The SBH team can be contacted on the following details:Mashirane Comfort Matheba, Commercial Manager Tel: 011 298 9446 Fax: 011 298 9546Email: [email protected]

Faith Mabaso, Marketing Manager Tel: 011 298 9456 Fax: 011 298 9556Email: [email protected]

Thakhani Khalushi, Transformation SpecialistTel: 011 298 9454 Fax: 011 298 9554Email: [email protected]

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With the ever increasing emphasis on productivity and efficiency, organisations are asking themselves what they should be doing to ensure bottom line returns and sustainability of their companies. One method of maximizing returns and ensuring business efficiency is performance management. In today’s workplace, performance management is becoming an increasingly popular topic. Business pressures are ever-increasing and organisations are now required to become even more effective and efficient, execute better on business strategy, and do more with less in order to remain competitive.

Aileen MacMillan of SuccessFactors.com informs us that whilst human resources professionals clearly understand the importance of optimal performance management, they often face significant internal obstacles. When someone mentions performance management or reviews at your organisation, the typical response is that employees and managers alike cringe. They avoid performance management related tasks and often the tracking down of incomplete appraisal forms becomes the order of the day. This can be changed and needs to be changed if organisations want to become even more effective and efficient, execute better on business strategy and do more with less in order to remain competitive.

PERFORMANCE MANAgEMENT, CAN YOUR COMPANY AFFORD NOT TO IMPLEMENT?

Forward thinking companies are taking steps to successfully address this negative view of performance management. They are implementing innovative solutions that ensure processes deliver real results and improve performance.

So why should your organisation focus on employee performance management now? Because embedding performance management within your business and using it as a strategic business tool will drive productivity, engagement and compliance. Consider what value it would bring if all of your people were completely focused on delivering against key organisational goals.

The Balanced Scorecard Institute, which is a strategic management group, informs us of the following as the reason for us to have performance management in our organisations:

• It improves the bottom line by reducing process cost and improving productivity and mission effectiveness.

• A performance measurement system such as the Balanced Scorecard allows an agency to align its strategic activities to the strategic plan. It permits - often for the first time - real deployment and implementation of the strategy on a continuous

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basis. With it, an agency can get feedback needed to guide the planning efforts. Without it, an agency is ‘flying blind’.

• Measurement of process efficiency provides a rational basis for selecting what business process improvements to make first.

• It allows managers to identify best practices in an organisation and expand their usage elsewhere.

• The visibility provided by a measurement system supports better and faster budget decisions and control of processes in the organisation. This means it can reduce risk.

• Visibility provides accountability and incentives based on real data, not anecdotes and subjective judgments. This serves for reinforcement and the motivation that comes from competition.

• It permits benchmarking of process performance against outside organisations.

• Collection of process cost data for many past projects allows us to learn how to estimate costs more accurately for future projects.

Some other justifications for the use of an effective performance management approach are that performance management:

• improves performance on the present job;

• provides for the development of the employee;

• rewards high performance;

• strengthens the manager-employee relationship;

• provides management with current data for use in its organisation planning efforts and

• performance management provides employees with performance feedback.

Many organisations will probably provide feedback that they are aware of all the arguments for an effective performance management system. They will also in the same breath inform you that, despite their efforts, it never really worked as well as perceived. Let us explore

some of the reasons why performance management would fail.

Some of the reasons why performance management fails are:

• There is no ongoing performance communication in that there is no sharing of work progress, potential barriers and problems, possible solutions and how the manager can help.

• Managers busy themselves with enforcing compliance to performance standards and thereby sacrifice the working relationship.

• Hard conversations are not held and frank discussions are not carried out because relationships are seen as more important than performance.

• Performance management is seen as an HR system and is often not owned and driven by Line Management.

• Failure to diagnose performance problems resulting in blaming taking place without necessarily diagnosing the root cause and the problem is seen as training or lack of employee motivation.

• Performance management is not integrated into other HR systems. Performance Management must link to selection, training and development, reward and recognition and succession planning.

Having unpacked the above arguments for the implementation of an effective performance management system and understanding the reasons why performance management would fail, organisations should no longer be asking themselves whether there is a case for performance management but rather be asking themselves, how soon they can implement an effective performance management system.

Mustak Ahmed Ally

Skill Development and Human Capital Executive

Forward thinking companies are taking steps to successfully address this negative view of performance

management

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WIL-power is being optimally practised at Sulzer South Africa Pty Ltd who are members of the South African Pump Manufacturers Association that is federated to SEIFSA since 1988 and a part of a global network of manufacturing sites. They are leading the gaits by creating a learning space within their work place by enabling the concept known as Work Integrated Learning (WIL).

In Work-Integrated Learning – A Good Practice Guide published by the Council on Higher Education (CHE), which is the Quality Council for Higher Education, that advises the Minister of Higher Education and Training on all higher education issues and is responsible for quality assurance, the term WIL is specifically described as an approach to career-focused education that includes classroom-based and workplace-based forms of learning that are appropriate for the professional qualification. What distinguishes WIL from narrow conceptions of learning-for-work is the emphasis on the integrative aspects of the learning. WIL can be described as an educational approach that aligns academic and workplace practices for the mutual benefit of students and workplaces; in this regard, WIL should demonstrably be appropriate for the qualification concerned.

Sulzer is a global partner offering reliable and sustainable solutions for performance critical applications. Their innovative solutions add value and strengthen the competitive position of their customers. Sulzer’s leading positioned manufacturing site in South Africa specialises in engineered and pre-engineered pumps and is the selected sole supplier of large vertical pumps within Sulzer, as well as being the largest pump testing facility in Africa.

Sulzer took in seven candidates at the beginning of 2014. Each candidate had completed their Practical One in the first six months and then started

SULzER HAVE WIL-POWER working on projects for their Practical Two. The first half of the 2014 year mainly involved workshop skills. The Sulzer workshop has lots to offer in terms of hands on experience, giving the candidates the opportunity to work alongside various artisans in the workshop as well as gain insight and knowledge on how day to day workshop processes work. The second half of the year was office based, where they worked under the supervision of the Engineering Department. This is where most of the designing and engineering related matters are handled. The candidates got to understand holistically how the entire design process works as well as get involved in some of the projects Sulzer was participating and managing at the time.

This was the first time Sulzer had taken on a WIL group and it is their determination and overarching goal to assist young people with the Workplace Integrated Learning experience that will enable and support them on their journey to becoming quality technicians. The candidates came from the following universities: Vaal University of Technology, Tshwane University of Technology and Nelson Mandela University of Technology. Each of the candidates were specifically recruited and selected from areas outside of Gauteng. The entire experience aided to create the necessary bridges needed by industry into tertiary institutions. Even the lecturers from the universities came to the workplace to visit the students, which in itself, was a learning experience for them.

The WIL-power approach continues to provide the candidates with a complete experience and included soft-skills training on corporate etiquette and business writing skills.

Sulzer has now absorbed and taken on three of the seven candidates on a full-time basis. Three decided to study further on a full time basis and one was given full time employment.

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The SEIFSA Training Centre has a proud 30-year history of providing outstanding apprentice training results. Boasting merSETA, CHIETA and EWSeta and also functioning as a National Trade Test Centre, the recently re-launched SEIFSA Training Centre offers the following training programmes:

• Apprenticeships

• Learnerships

• Skills programmes

• Short courses

• Recognition of Prior Learning (RPL)

• Trade proficiency assessment services

• Trade testing

• Assessments as well as

• continuous upskilling of artisans

Established by the Steel and Engineering Industries Federation of Southern Africa and managed by Gijima, the SEIFSA Training Centre also offers a high calibre of trainers who are not only qualified artisans and assessors but also possess industry experience and expertise. Training at the centre is offered in the following trades:

• Welding

• Boilermaking

• Fitting

SEIFS

A TRAINING CENTRE

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SEIFSA TRAINING CENTRE - NEW INTAKE dATES

• Turning

• Fitting and turning

• Instrumentation

• Electrical

• Toolmaking

• Millwright

• Pipefitting

Companies can also request assistance and support with:

• Recruitment and selection of unemployed learners

• Training and placement of unemployed learners and apprentices

For more information, you can log onto our website on http://www.seifsa.co.za/seifsa-training-centre.html or contact us on 011 422 2500 or [email protected]

2015 INTAkE DATES:

22 June

14 September

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The Steel and Engineering IndustriesFederation of Southern Africa (SEIFSA)is launching the SEIFSA Awards forExcellence to encourage the steel and engineering sector to foster a culture of innovation and celebrate excellence.

28 MAY | 2015 Emperors Palace,

Kempton ParkThe Awards encompass the following categories:

HEALTH AND SAFETY AWARD OF THE YEAR

MOST INNOVATIVE COMPANY OF THE YEAR

BEST CORPORATE SOCIAL RESPONSIBILITY PROGRAMME OF THE YEAR

CUSTOMER SERVICE AWARD OF THE YEAR

MOST TRANSFORMED COMPANY OF THE YEAR

ARTISAN AWARD OF THE YEAR

ENVIRONMENT STEWARDSHIP AWARD OF THE YEAR

CEO AWARDS

Enter your company in the SEIFSA Awards for Excellence and show case your achievements

The 2015 SEIFSA Awards for Excellence are open to all businesses in themetals and engineering sector within Southern Africa and will be based onwork completed between 1 January 2014 and 31 December2014

For sponsorship, criteria and participation enquiries, please visit: www.seifsaawards.co.za or email: [email protected]: +27 (0) 82 467 1213

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As SEIFSA’s financial year draws near, this note serves to remind our Price and Index Pages subscribers that their subscriptions will be coming up for renewal soon. In the past year there have also been significant changes to the subscription that is, new subscription options added. This note will also list these various changes and the options available to subscribers going forward.

Firstly, because we understand that not all companies need the subscription throughout the entire year, we have introduced a six month subscription. Subscribers who opt for this option enjoy the same benefits as those companies who are on the full year subscription, however, they enjoy the benefit for half the time. These subscribers would, therefore, receive a username and password in order to access the SEIFSA – PIPS portal for six months. They will also receive six printed booklets of the publication for the six months that they have subscribed for.

The most significant change is the flexibility introduced in terms of how subscribers can take the subscription. Previously, the standard subscription structure ran between July and June of any two successive years; this constituted a full year’s subscription. Under this structure, those subscribers who took the subscription months into the July to June year would pay a pro-rata rate determined as the balance between the respective month and June of the following year.

As of January 2015, we have now introduced rolling subscriptions, where a subscriber can take on a subscription at any point in a calendar year. Depending on the option chosen (six or 12 months), the subscription would be active for any six or 12 consecutive months, and not constrained to the July to June structure.

The SEIFSA office will be in contact with those subscribers whose subscriptions are about to come up due, more especially the bulk of the subscribers who had renewed their subscriptions last July. These subscribers will be presented with these options, to which they are more than welcome to choose the option which suits them best.

Also equally important is the fact that, in the past year there have been more than 50 new indices added to the publication, something the team working on this project is continually striving to achieve. The new indices include import and export unit value indices, international production price indices for the United States, Germany, China to name a few. Given the nature of trade in the current age, and in particular the international nature of most trades and products, this has been very well received by the current subscribers; evident in the positive feedback we have received from those subscribers using these indices.

We look forward to continue partnering with our current and new subscribers into the future, and help them create and grow sustainable and resilient businesses. The service remains your best insurance against inflation eroding the sustainability of your business. In this very volatile business environment we operate in, the SEIFSA – PIPS is the most trusted tool to accurately cover yourself from inflation (supply side of the contract), manage costs and avoid unnecessary cost over runs from the buying side of any contract.

We encourage you to keep an eye out on our new website (www.seifsapips.co.za) for the updates and for general information on the SEIFSA – Price and Index Pages publication.

Tafadzwa Chibanguza

Economist

REMINdER TO RENEW SEIFSA PRICE AND INDEX PAGES (PIPS) SuBSCRIPTIONS

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An employer’s obligation to employees is to provide a safe working environment, without any risks to the health of employees. This is in accordance with Section 8(1) of the Occupational Health and Safety Act 85 f 93. Section 8 (2) lists ways in which the employer shall provide such an environment, but the word “include” in that text implies that the employer’s obligation shall not be limited to those activities. Just how far does this obligation go?

In a civil case heard at a Gauteng High Court in 2009, a plaintiff named Jane, instituted a claim for damages against a former employer, for not providing a safe working environment for her. This resulted in continued sexual harassment of Jane, by another employee, Mark. In consequence, Jane suffered mental anguish and psychological trauma.

After the initial occurrence of the sexual harassment, Jane had reported the incident to her manager. Her manager advised her that he could do nothing as Mark was well connected and the complaint would lead to her dismissal than that of Mark’s. However, he did promise to look after her within his department and ensure that Mark did not touch her.

The sexual harassment continued both verbally and physically intermittently over a period of two years. She reached her last straw when Mark touched her buttock after having offered her a lift home. She reported the incident to Human Resources, and Mark was issued with a final written warning. The sexual harassment stopped, but Jane stated that Mark thereafter started intimidating her. Jane eventually resigned from employment citing personal reasons. Due to psychological problems which resulted from the sexual harassment, she sought psychological help from a counselling psychologist. She was found to have been severely traumatised and in need of psychotherapy and psychiatric services.

Was it within the employer’s obligation to create an environment which prevented or stopped sexual harassment? Had the employer failed to provide a safe working environment without risks to health for Jane?

PROVIdINg A SAFE ENVIRONMENT FREE FROM RISKS TO HEALTH

HEALT

H, S

AFE

TY, EN

VIRONMENT &

QU

ALITY

The fact that the sexual harassment occurred and even continued in the workplace, resulting in the psychological damage of the employee, makes it an occupational health matter. According to the judge, the employer should have put in place management and disciplinary structures that would immediately and effectively have dealt with Jane’s complaint. For instance, Jane’s manager should have been obliged immediately to have referred the complaint to Human Resources. The judge also found it unreasonable that

the employer failed to act in protecting Jane in the circumstances. The judgement was granted in favour of Jane in the sum of R60 000. The employer was also ordered to pay Jane’s costs.

CONCLUSION

In providing an environment that is safe and free from risks to health, employers should not limit their efforts to mitigating only physical, chemical and biological hazards in the workplace. Psychological hazards, as the case study clearly portrays, must be mitigated. Employers are obliged to provide an atmosphere which is conducive to the psychological wellbeing of all employees.

(The names in the above case study have been changed to protect the identity of persons involved).

Nonhlalo Mphofu

Health, Safety, Environment & Quality Executive

JUST HOW FAR SHOULD YOU GO?

The fact that the sexual harassment occurred

and even continued in the workplace, resulting in the psychological damage of the employee, makes it an occupational health matter

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The Compensation Fund is established according to the Compensation for Occupational Injuries and Diseases Act (COIDA). Employers are obliged to register with the Compensation Fund, a mutual association or be individually liable to ensure that their employees are compensated in the case of an occupational injury, illness or death.

The Compensation Fund covers medical expenses and pecuniary loss incurred by an affected employee. It also covers transport costs incurred by both the employer and the employee in respect of the accident, subject to the provisions of COIDA.

WHICH ACCIDENTS DOES THE COMPENSATION FUND COVER?

The key to the answer is understanding the definition of an accident in terms of COIDA. An accident is an unforeseen occurrence arising out of and during the course of work, resulting in an injury, illness or death. There are therefore three conditions that qualify as accidents:

1. The cause of the accident must be directly connected to the activities at work

2. The event must occur “during the course of work” or within the period that the employee is deemed to be at work

3. The event must result in an injury, illness or death

In the case of employees travelling to or from work, Section 22(5) of COIDA states that the accident is compensatable if the employee was travelling in a vehicle:a. provided by an employer for such purposeb. driven by the employer or one of the employees of an employer

c. provided for the transport of such employee free of charge

HOW DO CONDITIONS SET IN SECTION 22(5) JUSTIFY AN EVENT AS AN ACCIDENT?

When an employer provides a vehicle for use, he/she is in control of its condition. If the vehicle is driven by the employer or one of his/her employees, the employer has control over how the vehicle is driven. The use of the vehicle to ferry employees to and from work is part of the businesses activity. If an accident occurred, it would have arose out the activities of work.

The provision of transport free of charge is a benefit and part of employment conditions. When employees are transported to or from work, they are deemed to be at work. If an accident occurred during transportation of employees to or from work, it would qualify as an unforeseen event arising out of and during work.

Section 22(5) excludes among others, employees travelling to and from work on foot or by use of: i. Public transportii. Own vehicle iii. Carpool

It is important to note that where an employee insists that an injury or illness arose out of and during work, the employer is obliged to report the accident to the Compensation Commissioner on behalf of the employee. It is the decision of the Director General to refuse or grant such benefits.

Nonhlalo Mphofu

Health, Safety, Environment & Quality Executive

ACCIdENTS WHILE TRAVELLINg TO ANd FROM WORKARE EMPLOYEES COVERED?

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Workplace research is critical to ensuring the continued success of your company’s HIV/AIDS prevention strategy. Why is that? If your company has a better understanding of the economic impact of HIV/AIDS on the workplace, as well as insight into the current knowledge, attitudes and practices of employees in relation to HIV/AIDS, then measures can be put in place as part of the HIV/AIDS strategy to mitigate this impact.

RESEARCH IS RECOGNISED AS AN IMPORTANT PART OF AN HIV/AIDS STRATEGY

The Department of Labour’s Code of Good Practice, on HIV and AIDS and the World of Work confirms the importance of research: section 9.2 of the Code states that “In developing and implementing long and short term measures to deal with and reduce the impact of HIV/AIDS… policies and programmes must be informed by the outcomes of research and evidence.” According to the Code, this could be done through “impact assessments that include risk profiling, resource implications, environmental assessment, and research to determine vulnerability and susceptibility to HIV infection.”

AN IMPACT ASSESSMENT CAN HELP YOUR COMPANY UNDERSTAND THE EFFECTS OF HIV/AIDS

The purpose of an economic impact assessment is to study the workforce in relation to factors that are

MANAGING HIV/AIDS IN YOUR WORKPLACE

known, through research, to affect the way in which a company will experience the effects of the HIV/AIDS pandemic. These factors include aspects such as: gender, age, job category, region/location, salary band, length of service and the percentage of workers who receive medical aid or a pension contribution.

By using company-specific demographic and organisational information, it is possible, through a process of actuarial modelling, to predict the following:• The likely numbers of employees who will contract

HIV/AIDS and how many employees are at each stage of the disease each year;

• How many employees would need to be replaced because of deaths, early retirements and loss of productivity;

• The likely cost to the company in terms of the impact of HIV-positive employees; loss of experienced employees; the recruitment, training and support of replacement employees; the costs of medical aid and pensions as well as a total cost figure relating to the impact of HIV/AIDS.

It is clearly very important for companies to obtain the best possible predictions about the likely impact of HIV/AIDS on their business so that strategies may be implemented to maintain long-term viability and economic sustainability.

Contact (011) 794 5173 [email protected]

ALLIANCEPARTNER

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The answer to a sustainable energy future for businesses in South Africa is a synergy of renewables, including solar energy and energy efficiency, both of which must be advanced aggressively in the country in order to meet the energy demand.

This is according to Arthur Chien, Vice President of Talesun Energy, who says the current low business confidence levels experienced in South Africa can be attributed to the challenges that the country faces with electricity supply.

He points to the recently released statistics by SACCI which reveals that business confidence levels for this time of the year are the lowest in nearly two decades, highlighting the need for sustainable solutions. “With enough buy-in from government and the private sector, South Africa has the ability and the potential to move towards an energy efficient country, which will in turn increase business confidence.”

POOR RANKING

South Africa ranked 99th out of 140 countries by Global Competitiveness Index with regards to the provision of energy and according to Chien, the poor ranking can be attributed to continuous interruptions caused by rolling blackouts, which have caused local businesses to suffer.

“By becoming energy independent and efficient in terms of relying on renewables instead of the country’s power grid, businesses will avoid losses brought on by loadshedding, relieve pressure off the strained grid and become self-sufficient suppliers of electricity.”

SUSTAINABLE ENERGY FUTURE dEPENdS ON

RENEWABLES ANd ENERgy EFFICIENCy

Chien says that top users of electricity in the country include shopping malls and office buildings, which use energy for lighting systems, equipment, air conditioning and heating. “The implementation of renewables can help buildings save on energy dramatically. For example, the Epsom Downs Shopping Centre in Johannesburg, which is running a photovoltaic solar project, is projected to produce 30% of the electricity required by the shopping centre and expected to save 515,172 kilowatt-hour of energy per year. The most energy-efficient buildings in America use 35% less energy, according to Energy Star, a US Environmental Protection Agency.”

HIGH OCCUPANCY

He says that energy efficient buildings are also known to have higher occupancy rates and increased asset values. Due to the energy shortages being experienced in South Africa, it is imperative that government together with business become energy efficient and pursue renewable energy measures and regard these measures as imperative facets fighting the energy crisis in the country.

Chien points to research conducted by Energy Star, which indicates that Leadership in Energy and Environmental Design (LEED) certified buildings have 16-18% higher occupancies than non-rated buildings and are valued 10-31% higher. “This is often because tenants opt for real estate with lower utility bills.”

He adds that renewable and efficient energy will not only prevent businesses from suffering financial losses during power outages, but will save large amounts of money and protect the climate in the long run.

Bizcommunity.com

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ENVIRONMENTNEWS

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In 2008, scores of South Africans responded in angry disbelief to calls to switch off their lights for an hour in World Wildlife Fund (WWF’s) annual Earth Hour campaign.

In the midst of what was, at that point, the country’s worst ever energy crisis, the call to voluntarily dim the lights seemed ludicrous. Seven years down the line, and with Earth Hour on 28 March, the country faced a similar energy situation, with talk of loadshedding continuing for the next few years at best.

The difference is, this time round we know more. Increasing resource price inflation and volatility has highlighted the interconnected and interdependent nature of energy, water and food resources and the increased risk of resource-related shocks.

A crisis in the energy system can quickly have knock-on effects to the food system. For example, consider the impacts of loadshedding on both irrigation schedules and the cold chain in food transport.

MALNUTRITION AND HUNGER

In a country fraught with malnutrition and hunger and in the wake of the unprecedented Cape fires experienced on the hottest day in a century in the city, it is clear that a warming climate only adds further

HOW THE ENERgy CRISIS IMPACTS ON FOOD SECURITY IN SA

complexity and risk. In early 2013, the WWF launched a project specifically focused on the nexus of food, energy and water to better understand the challenges and opportunities for food security in South Africa and the region.

The first phase of the research focused on information gathering and awareness-raising in both the private sector and government. What became clear was that there was not enough conversation between various stakeholders in the system. This thinking was the driving force behind a Transformative Scenario Planning process to consider the urgent challenge of securing and improving our food system. The Southern Africa Food Lab at Stellenbosch University, convened the process in partnership with WWF South Africa and Reos Partners.

Transformative Scenario Planning helps bring together teams of stakeholders - often with divergent views - to create stories about what could happen and what options are available to deal with such scenarios.

The scenarios concerning the South African food system from 2015-2030 were developed through structured research and workshops with participants from across the food system. The level of concern on the matter was clearly reflected in the level of participation in the scenarios from company CEOs to senior government officials.

ENVIRONMENTNEWS

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FOUR SCENARIOS

Four scenarios were developed focusing on plausible threats to natural resources, food production, the impacts of the political economy and nutrition issues respectively.

Looking only at the first scenario - the one that deals with the natural resources on which we rely on in order to produce food - we are presented with some dire realities if increased warming and droughts develop as predicted.

Picture this scenario for a moment: increasing temperatures and droughts result in a crisis in water quality and quantity. This, of course, coincides with a crisis in energy supply, setting in motion a ripple-effect through interconnected ecological and social systems. Soils have been depleted, there is limited viable arable land, irrigation demand is growing and municipal infrastructure is ageing.

Poverty, inequality, high unemployment rates and household food insecurity form the social backdrop to this scenario. As a result of many of these factors, South Africa’s river systems take strain, which in turn impacts on agriculture.

Some potential results: the quality of export crops would be compromised by poor water quality; significant job losses would occur in the agricultural sector; honeybee species would become endangered, threatening crop pollination; state expenditure on food may be diverted to nuclear infrastructure to address the energy crisis; crop yields would decrease and drought conditions would push up the price of staple foods.

HIGHER FOOD PRICES

None of the above is far-fetched. In fact, some of this is already playing out with

2015 predicted to be an eight-year low i n maize production due to drought. The knock- o n effects of this include higher food prices in t h e short-term as the grain is a basic input for t h e production of red meat, poultry, eggs and milk.

The purpose of developing the food future scenarios was to prompt a more coherent conversation about an effective food system for South Africa. The scenarios help to identify the choices organisations and individuals can make now to adapt to anticipated challenges or to shape together the future of food in South Africa.

Clearly there are some difficult conversations to be had and big decisions to be made. This is one of the reasons why this year’s Earth Hour campaign, which culminated with a symbolic switch off of lights on 28 March from 8:30pm to 9:30pm, aimed to raise awareness around climate change and its impacts on food, energy and water.

Bizcommunity.com

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WORKING IN TIME ARRANGEMENTS AND PUBLIC HOLIDAYS – WHAT dOES THE MAIN AgREEMENT REquIRE?

In the last issue of SEIFSA News, we published an article on dealing effectively with paid public holidays. In this edition, we look at how companies can work time in, in exchange for extending long weekends created by the public holidays. Section 38 of the Main Agreement provides for this, and essentially allows for two things:

1. An arrangement to work-in time on a shift or shifts not ordinarily worked by such employ ees in order to achieve the paid extension of: a. Any public holiday; or b. A period not ordinarily worked by the employees; or c. The annual shutdown period2. An arrangement to close an establishment during any period of work specified as normal working hours for that establishment.

In order to implement either of the abovementioned plans, the employer needs the support of at least 75% of the employees, which may be obtained by means of holding a company ballot.

The periods highlighted above count towards the employee’s qualification for the purposes of both Leave Pay and Leave Enhancement Pay.

Where an employee’s services terminate before the implementation of the agreed working-in time arrangement, payment for all time worked outside of normal working hours of work in respect of this arrangement will be made in accordance with the appropriate overtime rates, i.e. 1,5X the normal hourly rate for hours worked before or after normal hours during the week or on Saturdays, and 2X the normal hourly rate for time worked on Sunday.

38. WORKING-IN TIME ARRANGEMENTS1. For purposes of this clause ‘employees covered by

this Agreement’ shall, in addition to all scheduled employees, include employees referred to in subclauses (4) and (5) of clause 1 of Part I of this Agreement.

2. An employer, with the support of not less than 75% of his employees covered by this Agreement, obtained via a ballot, may enter into an arrangement to work in time in order to achieve the extension with pay of—

(a) any paid holiday provided for in clause 11 of this Agreement; or

(b) periods not ordinarily worked by employees; or

(c) the annual shutdown period provided for in clause 16 of this Agreement.

3. An employer, subject to the ballot arrangement referred to in subclause (2), may enter into an arrangement to close his establishment—(a) on any ordinary working day; or(b) for any period of work forming part of any

ordinary working day.4. Where arrangements to work in time, as referred

to in subclause (2) or (3), are entered into such arrangements shall not include working in time on Sundays.

5. Where employment terminates before the date for which time had been worked in, in terms of subclause (2) or (3), all hours so worked shall be deemed to be overtime hours subject to payment at the appropriate overtime rate applicable.

6. Time worked in by employees in terms of subclause (2) or (3) shall count towards leave pay and/or leave enhancement pay entitlements as provided for in clauses 12 to 14.

7. Where such working-in time arrangements are entered into the employer shall notify the Regional Council concerned thereof within 14 days of such decision, specifying—

(a) the outcome of the ballot; (b) the day/days for which time will be worked

in; (c) the day/days on which such time will be

worked in.

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Please note that an employer must advise the Regional Council and the parties concerned, i.e. the employee representatives and, if applicable, their representative trade unions, of the outcome of the company ballot where any of the above arrangements are to be implemented.

For assistance with the payment of public holidays or any other query, please contact the Industrial Relations Division on 011 298 9400.

PRIVATE EMPLOyMENT SECTOR BOdy APPROACHES COURT FOR DECLARATOR ON DEEMING PROVISION

The Confederation of Associations in the Private Employment Sector (Capes) plans to approach the Court to get a declarator on the interpretation of the deeming clause found in the Labour Relations Amendment Act, which is applicable from 1 January 2015. The so-called deeming clause deals with the relationship between a temporary employment service (TES), a client company and an employee. The clause appears in the form of the new section 198A(3)(b)(i) of the LRA and provides:

‘For the purposes of this Act, an employee … not performing such temporary services [defined to be limited to three months] for the client is deemed to be the employee of that client and the client is deemed to be the employer.’

The deeming clause has been the subject of protracted debate amongst various stakeholders, with different parties holding various different views, leading to the risk of extensive litigation in the area. The CCMA and Government, through the Department of Labour,

have recently concluded a series of roadshows where they shared their understanding of the clause to mean that employees placed at a client company transfer permanently from the temporary employment service (TES) to the client after the three month period. Various business organisations, including Capes, do not share that view, but interpret the clause to mean that the client and the TES constitute duel employers.

In a bid to obtain certainty on the matter, many different organisations have sourced numerous legal opinions, many of them supporting the view held by Capes and others. Capes has stated that it is now felt by themselves that the Court be approached to weigh in on the new amendment. SEIFSA will keep members abreast of developments in this regard.

For assistance with further information or any other query, please contact the Industrial Relations Division on 011 298 9400.

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When the amendments made on the Labour Relations Act 66 of 1995 (The Act), came into effect on 1 January 2015, one can argue that the relationship between the Master (employer) and the Servant (employee) has to

a n extent being blurred.

According to the amendment made to Section 187(1)(c) of the Act, the employer has been placed at a compromising position that the employee arguably dictates the employers business with regards to matters of mutual interest.

According to the amendment on section 187 in so far as it is relevant to this matter, it reads:

“A dismissal is automatically unfair--------if the reason for the dismissal is-…..

(a)…….(b)…….(c) To compel the employee to accept a demand

in respect of any matter of mutual interest between the employer and the employee….”.

The new amendment to the Act specifically abolishes the principles established by the judgments of Fry’s Metals (Pty) Ltd v National Union of Metalworkers of SA & Others (2003) 24 ILJ 133 (LAC) and Mazista Tiles (Pty) Ltd v National Union Of Mineworkers & Others (2004) 25 ILJ 2156 (LAC). Pursuant to these judgments and because of the interpretation attached to Section 187(1)(c), an employer is entitled to utilise the provisions of termination of employment based on operational requirements in order to effect changes to conditions of employment of employees.

In the matter of Fry’s Metals (Pty) Ltd v National Union of Metalworkers of SA & Others the court held that: “The purpose of a dismissal for operational requirements in such a case, which is the same as in the present matter, is to get rid of employees who do not meet the business requirements of the employer so that new employees who will meet the business requirements of the employer can be employed.” And further in Mazista Tiles (Pty) Ltd v National Union of Mineworkers & Others: “In a case where a dismissal for operational requirements is directly linked to the employees’ rejection of the proposals to changing terms and conditions of service, the continuing existence of the employees’ jobs is irrelevant to the determination of whether or not there was a fair reason for the dismissal because such dismissal would have been necessary by virtue of changing business requirements and not that

THE BLURRY LINE BETWEEN THE MASTER ANd THE SERVANT

the jobs themselves were redundant. As it was stated in Algorax, an employer who requires to effect changes to terms and conditions of service due to operational needs of the business may dismiss the employees who reject such terms and replace them with new employees who are prepared to work in accordance with the needs of the business provided the requirements of s 189 are met.”.

The amendment completely negates this. In the explanatory memorandum accompanying the amendment Bill, it is recorded that the purpose of this amendment was to leave all changes to conditions of employment up to collective bargaining only. Firstly, collective bargaining can only be effectively used in a workplace in which a trade union has organised and operates. With most workplaces, this is simply not the case, and collective bargaining simply cannot work.

Further, this provision unduly prejudices flexibility in employment conditions, which is actually an imperative to creating and retaining employment. The employer is then left with a recourse of a lock out of employees without the option of employing skeleton staff in the interim.

Accordingly the amendment to the Act therefore places the employer in a compromising position to which the employer would then have to either ensure that there is a Trade Union in place at the workplace to help mitigate such a provision or exercise their rights through a lock-out which then compromises the business of the employer. The relationship between the employer and the employee is therefore one which is compromised more so for the employer thus defeating the purpose of running a profitable business in certain instances.

Simply put, the employer then finds himself in the difficult position of having to succumb to the employee’s demands despite business demands in a position where the employee irrationally refuses to adhere to a matter of mutual interest which would be beneficiary to both parties. From the change in legislation one can conclude that the application of this provision of the Act would be a challenging one for the employer to effectively apply whilst trying to maximise on their business. It then waits to be seen, how the application of such a provision would take place more so in a country where things like strikes can last for extended period of months on a nationally compromising economy.

Menzi Vilakazi

SEIFSA Legal Officer

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SEIFSA NEWS | May 2015Web: www.seifsa.co.za | Tel: (011) 298 9400 | Email: [email protected] | 0861 SEIFSA

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