Trade union Solidarity claims that mismanagement and a lack of political will at South African national oil company PetroSA are the main reasons for a second retrenchment process instituted within 12 months of a previous process at the company.

According to Solidarity, the State-owned enterprise informed its employees and unions in December 2021 that it wanted to reduce its workforce from 1 168, to about 318 members of staff by retrenching 850 employees.

The consultation process started in mid-January under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA).
 
Solidarity general secretary Gideon du Plessis says that, from an operational perspective, mismanagement by PetroSA’s executives “has clearly been replicated in their total blundering and negligence” in handling the retrenchment process.

“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,” he says.

As a result, Du Plessis says further litigation, arising from these flaws, is a possibility.

Also, Solidarity argues that, even in the run-up to the retrenchment process, PetroSA dealt with the applications for voluntary severance packages in an incompetent manner; 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 alleges that PetroSA 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,” he says. Such funds could have been used to fund the short-term incentive plan, states Du Plessis.

However, he says PetroSA wants to instead reduce salaries by 20% and not grant increases for two years.

“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”, says Du Plessis.

ALTERNATIVE?

Solidarity contends that PetroSA’s sustainability can easily improved, and all jobs can be retained, if the government firstly re-allocates to PetroSA a portion of the fuel levy that used to serve as funding for, among other things, gas exploration projects.

Solidarity says this is in line with President Cyril Ramaphosa’s announcement at the African National Congress, South African Communist Party and Congress of South African Trade Unions’ tripartite alliance lekgotla held earlier in January, whereby it was agreed that gas exploration would be a key priority with a view to economic growth and job creation.

Secondly, Solidarity posits that the government must enable PetroSA to be the fuel supplier for more State-owned enterprises, as currently it only supplies Eskom.

Moreover, Solidarity points out that the growing non-compliance with safety regulations owing to poor maintenance, in particular, poses a major risk to PetroSA employees.

“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 [PetroSA proceeds] with the retrenchments, it will have catastrophic socio-economic consequences for the [Western 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,” concludes Du Plessis.