Big artisans’ action a double blow for Sasol
BUSINESS LIVE / 04 SEPTEMBER 2018 - 05:06 / LISA STEYN
Trade union Solidarity’s members have timed their industrial action at Sasol to coincide with a planned maintenance shutdown at its Secunda and Sasolburg plants, and any delays in restarting operations could cause significant financial losses for the company, the union said.
Solidarity members largely comprise artisans and other skilled workers who are integral to such a planned shutdown. The employees are highly trained and of major strategic importance to the petrochemicals firm, the union said.
Countdown: A man walks past South African petrochemical company Sasol’s synthetic fuel plant in Secunda, north of Johannesburg. The company’s employees who are members of trade union Solidarity plan to down tools. Picture: SIPHIWE SIBEKO/REUTERS
Solidarity’s white members are protesting their exclusion from the company’s new employee share ownership scheme, Sasol Khanyisa.
Deon Reyneke, Solidarity’s deputy general secretary, said for safety reasons it would have been difficult to stop production when Sasol operations were at full production but the planned shutdown has provided the 6,300 union members an opportunity to slow down the process and potentially delay the restarting of operations at great cost to the company.
As part of a staggered industrial action, Solidarity members will, for now, 'work to rule'
The shutdown is a detailed maintenance operation which takes years to map out but is carried out in just three weeks.
As part of a staggered industrial action, Solidarity members will, for now, "work to rule", said Reyneke. This is a form of industrial action where working rules and hours are followed to the letter in order to reduce output and efficiency.
"The cumulative effect will be seen by the 21st [of September] when Sasol needs to be back to full production," he said. Reyneke said the cost of delays could be substantial, but the aim was not to cripple the company.
Losses could be averted if Sasol came to the table with a suitable deal for those employees excluded from the employee share ownership scheme.
Solidarity originally declared a dispute against Sasol in January 2018 over the exclusion of white employees from phase 2 of Sasol Khanyisa. The scheme follows on the previous one, the Sasol Inzalo Employee Scheme, which included all employees but has been criticised for severely underperforming.
Sasol permanent employees — regardless of race — who participated in Inzalo and were permanently employed on June 1 2018 will participate in phase 1 and are eligible for R100,000 worth of Sasol ordinary shares, or Sasol BEE ordinary shares. All black employees who were permanently employed on June 1 2018 participated in Phase 2 and are eligible for 1,240 Sasol Khanyisa rights to shares, which will vest in June 2028. Solidarity says it represents a value of R400,000 per employee.
The union has claimed the exclusion of its members from the scheme is in contravention of general practice at mines as well the draft Mining Charter which stipulates that white employees may not be excluded from staff share schemes. It has also said it would file a complaint to US regulators over the "discriminative" share scheme.
The company has made an 88% investment in its Lake Charles Chemicals Project in Louisiana, US.
Black public shareholders
Sasol has said the intention of Khanyisa is to create meaningful financial benefits for about 230,000 black public shareholders and qualifying employees, and to achieve 25% direct and indirect black ownership of Sasol.
In May, after a second round of discussions between the parties and an inability to reach common ground, the Commission for Conciliation, Mediation and Arbitration (CCMA) issued a certificate of non-resolution. And last week, Solidarity issued a strike notice to Sasol.
In a statement on Monday the ANC said that while the right to strike was sacrosanct, the party was deeply concerned about the "racist overtones" of the strike.
Solidarity members participated in early morning picketing on Monday, but a "complete strike" will take place on Thursday, with a mass meeting of the community at the Secunda plant and the Sasol coal mines.
"The focus will then shift to Sasolburg and later both industrial plants and the Sasol coal mines will stage joint actions," the union said.
Wade Napier, diversified resources analyst at Avior Capital, said the 6,300 Solidarity members constitute a sizeable component of Sasol’s workforce, but he said it was debatable whether the impact would be felt during the planned shutdown when operations would already be affected.
For example, Sasol had already adjusted its guidance for the company’s annual production from its synfuels plant down from 7.8-million tons to 7.6-million tons because of the planned shutdown.
Sasol has meanwhile said it has activated contingency measures to minimise potential disruption of a strike to its operations and that planned maintenance shutdowns had continued as scheduled.
Operations that are not part of the annual maintenance shutdown are also continuing as planned, it said.
"We continue to monitor the situation. Our priority is ensuring that all personnel are engaged to ensure safe and ongoing operations," the company said. "Sasol remains committed to open and honest engagement with all our trade union partners and our employees."
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER