Retrenchments at PetroSA threaten Southern Cape economy; brought on by mismanagement
25 January 2022
Solidarity denounces the total mismanagement and lack of political will at PetroSA, which Solidarity contends, are the main reasons for a second retrenchment process instituted within 12 months of a previous process at PetroSA.
According to Solidarity, the state-owned enterprise informed its employees and unions in December 2021 that the enterprise wanted to reduce its workforce from 1 168 to about 318 members of staff by retrenching 850 employees. The consultation process kicked off last week under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA).
“From an operational perspective, top management’s utter mismanagement of the company has clearly been replicated in their total blundering and negligence in handling the retrenchment process,” explains Gideon du Plessis, Solidarity’s general secretary. “The section 189 retrenchment notice and business plan which staff members and unions received are fraught with technical errors and procedural flaws. As a result, the first CCMA consultation session focused only on the procedural flaws and did not deal with substantive matters at all”. Further litigation arising from these flaws is a possibility.
Solidarity argues that even in the run-up to the retrenchment process, the company dealt with the applications for voluntary severance packages in a very incompetent way, pointing out that while 115 applications for voluntary packages had been approved, many applications were rejected from staff whose posts have now been declared redundant.
Solidarity further denounces the fact that the company ignored many of its own staff and unions’ proposals for a turnaround plan, remaining obstinate and adversarial towards employees and unions rather than seeking consensus.
“It is of concern that PetroSA has spent millions on legal fees to contest so many unnecessary and preventable disputes. Such funds could have been used to fund the short-term incentive plan (STIP). Instead, the company wants to reduce salaries by 20%, and does not want to grant increases for two years,” Du Plessis stated. “Although the staff had been involved in a “turnaround plan” exercise with the Department of Mineral Resources and Energy, not one of the proposals agreed upon was implemented”.
Solidarity contends that PetroSA’s sustainability can be increased easily, and all jobs can be retained if the government first re-allocate to PetroSA that portion of the fuel levy that used to serve as funding for, among other things, gas exploration projects. This is in line with Pres Cyril Ramaphosa’s announcement at the ANC, SACP and Cosatu Tripartite Alliance lekgotla held over the weekend, that it was agreed that gas exploration would be a key priority with a view to economic growth and job creation.
Second, the government must once again enable PetroSA to be the fuel supplier for more state-owned enterprises as currently, the company is only Eskom’s supplier. For example, if PetroSA becomes the service provider for the Department of Defence, the company would be totally sustainable, while more state-owned enterprises could be added to the list.
Moreover, Solidarity points out that the growing non-compliance with safety regulations due to poor maintenance, in particular, poses a major risk to employees, and this is of particular concern.
“After years of mismanagement which is especially notable with regard to poor future planning, a retrenchment process is now the easy way out, but if the company goes through with the retrenchments, it will have catastrophic socio-economic consequences for the Southern Cape in particular. Solidarity will fight the retrenchments, but through constructive proposals seek to prevent PetroSA from following the same path Denel and many other state institutions went,” Du Plessis concluded.
The follow-up session at the CCMA is scheduled for 1 February 2022.
Issued by Gideon du Plessis, General Secretary, Solidarity, 25 January 2022
