Heineken labour issue ferments
Martha Xakaza is a single mother born and raised in Soweto. She takes three taxis from her house in Vosloorus to get to work for her 12-hour shift, which starts either at dawn or at 6pm.
She is a line packer at Heineken’s Sedibeng brewery in the Vaal. She takes home R300 for a day shift. But she works for LSC Masakhe, one of the seven or more labour-broking companies that operate at Heineken.
On LSC’s website, the “staffing solutions” company promises businesses like Heineken that, “with less [sic] staff costs, you’ll have less [sic] overall expenses”.
Despite years of campaigning by trade union federation Cosatu and recent amendments to the Labour Relations Act, labour broking shows few signs of disappearing, as companies appear to exploit loopholes in the Labour Relations Act (LRA).
Ighsaan Schroeder, of the Casual Workers’ Advice Office (CWAO), said: “Labour broking replaces permanent workers with lower-earning, unorganised workers to increase client company profits. It is simply continuing the cheap black labour system of apartheid by different means.”
LSC is contracted to the Imperial Group, which is a “third-party service provider” to Heineken. LSC is not the lowest-paying of the companies used by Heineken. The payslips of labourbroker workers who worked for CJK Labour Services — another company that until recently was contracted to Imperial at Heineken — show that the most a worker took home after a 12-hour work day was R185.
On some occasions workers made as little as R24 for a 12-hour shift. This is because CJK paid “piece job” rates, which depend on the number of items of work completed. The money a worker makes depends on, for example, the number of crates there are to pack that day.
The payslips also reflect the unpredictable nature of this type of work. A worker who made R96 for a day shift on May 29 took home only R36 the next day, barely enough to cover the cost of transport home.
Third-party service providers
“The money doesn’t cover my needs,” Xakaza said. With the R800 she has to dedicate to transport each month, added to bond, electricity and water costs, little is left over, and the two older children of the three in her care have to help to pay for groceries.
Now Xakaza and 293 of her colleagues have brought a case to the Commission for Conciliation, Mediation and Arbitration (CCMA), alleging that brokers at Heineken are contravening labour laws.
Zodwa Velleman, Heineken South Africa’s legal and corporate relations director, initially denied that any Heineken employees could have been be paid what the workers were claiming. “Of our almost 900 employees, all of them are paid salaries that we pay in line with industry norms.”
But she was referring to Heineken’s permanent employees and not necessarily the labour-broker workers, who are employed by other companies although they perform duties integral to the brewery’s production.
Velleman insisted that Heineken did not employ l abour-broking companies but “third-party service providers”, who use labour brokers. According to her, if labour codes are breached, it is the responsibility of the third-party service providers, such as Imperial.
Andries Tloome, another LSC Masakhe worker, said labour-broker workers like him have no recourse to Heineken. “We do have some problems among our workers but, when we go to our line manager to complain about the working situation, they say ‘no’, and we can’t go and face the client.”
Line managers are often also labour-broker workers, meaning that, if a worker wants to raise an issue with the client, representatives of the company are difficult to reach.
The 2015 amendment to the LRA granted new rights to labour-broker workers. Section 198A limits labourbroking contracts to three months, after which the law considers the worker a permanent employee. These workers are also supposed to be treated “not less favourably” than the client company’s permanent workers — meaning they should earn the same wages and benefits.
Despite working at Heineken for more than five years, Xakaza was never told about her right to be made permanent under the LRA and her working conditions haven’t changed.
Katishi Masemola, the general secretary of the Food and Allied Workers’ Union, the main union operating in the industry, said that labour-broker workers were an integral part of the process, worked side by side with permanent employees, but enjoyed vastly different benefits.
Xakaza said permanent workers received free alcohol at month’s end, but labour-broker workers did not. Permanent workers could eat in the canteen for a small monthly fee, but she and her colleagues could not.
They were excluded from functions at the brewery and told to stay at home without pay. “We are hurt by this,” she said.
Tloome said Heineken’s permanent workers get incentives for hitting targets for the month, but labour-broker workers do not receive any bonuses for additional work.
29 workers‘dismissed’
According to Heineken, the company was dealing with apparent breaches of their supplier code and labour laws, and confirmed that CJK was not compliant. “For this reason, their contract was terminated by Imperial, effective September 16. Imperial proposed a plan to us on how they will deal with the CJK employees, which entails offering them permanent employment with Imperial effective September 18. This we welcomed as the correct thing to do,” Velleman said.
The CWAO confirmed that the CJK workers have been offered other one-month contracts — but with LSC Masakhe, and not as permanent workers for Imperial.
According to the CWAO, 29 former CJK workers have been dismissed in the month since this compromise was brokered, though LSC has denied this.
“For clarity’s sake, the staff that we have taken over from CJK are engaged in project work. By the nature of such projects, their work is not continuous, nor has it ever been,” said Michelle Nielson, LSC’s marketing director.
Themba Samuel Radebe, one of the allegedly dismissed CJK workers, said they were simply told that the containers they had been packing were not coming back.
Other workers said they were handed a document that gave them the choice of terminating their service or of returning to the site once work had been found for them.
He said that he and others refused to sign the contract, though others felt obliged to.
Masemola said there was “something very interesting” about this arrangement between Heineken and Imperial. “I think it’s one step forward. It’s not the whole journey but it’s a move in the right direction. Ultimately, the union wants workers to be employed by Heineken.
“CJK is a typical labour broker. Imperial is still a labour broker, but it has benefits that it gives to workers at least. I’m not saying that it’s a better labour broker, I’m only saying that it’s better than CJK.”
A trilateral structure
Heineken’s use of so-called thirdparty service providers complicates the terms of section 198A of the Act.
Labour lawyer and former trade unionist Jan Theron said this trilateral employment structure — between client company, third-party service provider and labour broker — was ubiquitous.
He said the 2015 amendment to the LRA contained a poorly defined outline of what constitutes temporary employment services, under which labour broking falls.
He said the Act’s failure to distinguish between labourbroking companies and what companies are calling thirdparty service providers was a big shortcoming.
Xakaza said she would continue to seek permanent employment at Heineken. “I can’t go searching all around South Africa knowing that I already have a job,” she said.
“I have thought about leaving, but when I think I’ll have to start all over again — at a place that could be even worse — I have to tell myself that I have to fight for this.”