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Update on Aurora Mines Wages & UI Benefits

Summary of DOL intervention for wage issues at Aurora Grootvlei and Orkney Mines, legal basis, payment breakdown, and unemployment insurance processing update. Presentation to Committee on Mineral Resources on 28 Oct 2011.

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Update on Aurora Mines Wages & UI Benefits

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  1. Briefing on Developments and Update on payment of Outstanding Wages and Unemployment Insurance Benefits to Aurora Grootvlei and Orkney Mines eligible workers Portfolio Committee on Mineral Resources 28 October 2011

  2. PRESENTATION OUTLINE 1. Background 2. Payment of Outstanding Wages at Aurora Grootvlei Mine 3. Processing of Unemployment Insurance Claims at Grootvlei Mine 4. Outstanding Wages at Aurora Orkney Mine 5. Processing of Unemployment Insurance at Orkney Mine 6. Conclusion

  3. 1. BACKGROUND On the 13th April 2011, DOL provided a detailed background on: • How the DOL Springs Labour Centre first received complaints from employees from Aurora Grootvlei during July 2009. • How Aurora Orkney employees reported their complaint to the Klerksdorp Labour Centre during September 2010. • We reported on meetings that DOL inspectors had with employees, employers and trade unions in both Springs and Orkney to try and resolve these matter.

  4. 1.1. Background The Problem as understood by DOL: • Unpaid wages and unpaid overtime, • Agency Shop Fund of R 510 000 that the company borrowed and failed to pay, • Third Party payments not made despite deductions made by the company from employees in relation to: - Unemployment Insurance Benefits - Provident/Pension Funds - Compensation Funds towards Rand Mutual Assurance - Garnishee Orders

  5. 1.2. Legal basis for DOL intervention The Legal Basis for DOL intervention: • When an Employer contravenes Section 32 of the Basic Condition of Employment Act (BCEA), 1997 (Act No. 75 of 1997). • Section 68 of the BCEA, empowers Labour inspectors to solicit a written undertaking from an employer to settle outstanding payments within 60 days. • In cases of non compliance with Section 68, Section 69 of the BCEA can be invoked and labour inspectors can issue a Compliance Order.

  6. 1.3. Legal basis for DOL intervention • The aforementioned Compliance Order can be made an Order of the Labour Court in terms of the Labour Relations Act of 1995. • Notwithstanding the above, the powers of an inspectors are limited by provisions of Section 70, e.g. when the employer has collective bargaining agreements; employees falling outside of scope in terms of Section 6(1); if a recovery process has been instituted or an employer has made payment etc.

  7. 1.4. Other factors that impacted on DOL mandate Some of the factors that went beyond DOL scope: • The liquidation process of Phamodzi Gold Mine; • Ownership of Aurora Investment Companies; • Mining license aspects; • Collective agreements signed with both NUM and Solidarity; • Non payments of third parties despite deductions made from employees, • Income of workers earning above the threshold of R149 575.00 p.a; • Migrant employees who cannot be traced; • Unacceptable living conditions employees at the hostel; • Security problems at Aurora mine shafts;

  8. 1.5.. DoL Interventions at Aurora Mine - Grootvlei • Outstanding wages: • The Total amount owed to all employees was around R4 million. • DOL only intervened on-behalf 1 238 workers earning below the BCEA threshold of R 149 575. amounting to the total of R 2, 033 million. • A Compliance Order was issued in October 2010 in line with Section 69 of the BCEA, • DOL approached the Labour Court during November 2010 for the Compliance Order to be made an Order of the Court.

  9. 2. Payment of Outstanding Wages at Aurora Grootvlei Mine • Aurora Mine – Grootvlei transferred an amount of R2,03 million to the DOL account based on the settlement agreement that covered future claims. • The DOL Springs Office proceeded with payments to 1 278 qualifying workers whose details were included in the Compliance Order.

  10. 2.1. Payment of Outstanding Wages at Aurora Grootvlei Mine Payment Breakdown on of funds transferred to DOL: Cash received R 2,032,034.65 Payments: December 2010: R787,943.05 January 2011: R443,390.71 February 2011: R366,680.90 March 2011: R388,222.89 Total R1,986,237,55, Payments April 2011 R45,797.10

  11. 2.2. Payment of Outstanding Wages at Aurora Grootvlei Mine • A total of 493 new complaints for unpaid wages were received by 15 May 2011. • DOL submitted claims for 401 workers who earned below the tresh hold based on the settlement agreement to the amount of R 1, 730, 741.79 on the 16 May 2011. • The above claim will now be forwarded to the new Aurora Liquidators and workers will be informed accordingly.

  12. 3. Update on Processing of Unemployment Insurance Claims at Grootvlei Mine During April 2011,we reported that: • UIF benefits could not be processed because the workers were technically still employed by Aurora and workers were informed accordingly. • A total potential 3000 claimants were identified, 800 applications were received by 22nd March and Declarations were still outstanding from employers.

  13. 3.1. Update on Processing of Unemployment Insurance Claims at Grootvlei Mine • DOL reported on a meeting held with the Aurora management and worker representatives on 22 March: - That workers would be retrenched in terms of the BCEA for operational reasons, because the mine had ceased to operate - The retrenchment date would be 31 March 2010. - Aurora would provide each worker with a letter to this effect - Aurora would ensure that the UIF declaration covering all workers would be updated and forwarded to the UIF. - DoL will assist with this process to ensure that there are no undue delays - Other aspects relating workers retrenchments will be negotiated between Solidarity, NUM and Aurora at a time to be agreed. - These retrenchment negotiations will not delay the UIF applications by workers. - Parties are to meet by 15 April 2011 to review progress.

  14. 3.2. UIF Grootvlei Mine cont… UIF claims for 31st March 2010-April 2011 • Claims received: 936 (SA citizens only, foreign nationals do not qualify as they were not contributing) • Processed: 936 • Approved 825 (88%)claims • Rejected: 90 (due to non compliance but applicants can appeal) • Outstanding: 21 (could not finalize due to outstanding info, e.g banking details, etc)

  15. 4. Update on Outstanding Wages at Aurora Orkney Mine • The total amount owed to all 1170 employees (of which 185 has since resigned) earning above and below the threshold was about R8,65 million. • During December 2010, Aurora paid an amount said to be equivalent to a total of 25% of into the bank accounts of all staff members.

  16. 4.1. Aurora Orkney Outstanding wages… • DOL issued an Undertaking to Aurora Orkney to pay an amount of R3.95 million to workers earning below the threshold on 15 February 2011. • Aurora failed to comply with the Order and did not raise any objection. • DOL submitted an application to the Labour Court for the Compliance Order to be made an Order of the Court on Tuesday 12 April 2011. • The matter was heard at the Labour Court on the 29 June 2011. The Compliance Order was made an Order of Court in favour of DOL for Aurora Orkney to pay an amount of R 3, 947, 645.00

  17. 4.2. Aurora Orkney Outstanding wages Since the Labour Court ruling, there has been challenges in serving the Court Order: • On the 07th July 2011 DOL went to 11 Boundary Road, Harrow Court. Isle of Houghton, Houghton to serve the Court Order to Aurora only to find the offices vacated. • On the 08th July 2011 DOL served the Court Order to the Joint Liquidators of Pamodzi and the Trade Unions were briefed accordingly on the 13th July 2011.

  18. 4.3. Aurora Orkney Outstanding wages • Subsequently Pamodzi Liquidators had a meeting with DOL on 26th July 2011 wherein they provided written explanation that essentially argues that they were not the Liquidators of Aurora and therefore could not be of assistance to this process. Reasons included: “8. The Court Order granted has no bearing or impact on the administration of the insolvent estate of Pamodzi. The court order relates to the separate employment agreement entered into between Aurora and its employees”

  19. 4.4. Aurora Orkney Outstanding wages • DOL approached Mr Ahmed of Ahmed Amod Attorneys, on the 29th August 2011 to serve the Court Order during the Aurora Inquiry held in Terms of Section 417 and 418 of the Companies Act at the Gauteng Master of the High Court Pretoria. • Mr Ahmed refused to accept the Court Order as he was only appointed to represent Aurora at the Inquiry. • DOL has not as of 26th October 2011 been able to serve the Court Order to anyone as we are unable to locate Aurora and were still awaiting the Master of the High Court to appoint the Aurora Liquidator.

  20. 4.5. Aurora Orkney Outstanding wages • DOL has since established that Ms De Wet of Kaap Vaal Trust was appointed as one of the Aurora Liquidators by the Master of the High Court on the 27th October 2011. • DOL has also established that an Inquiry on Aurora is scheduled to commence on the 28th October to 04 November 2011 and DOL will participate. • An appointment has been scheduled for the 1st November 2011 to serve new liquidators with the Court Order.

  21. 5. Processing of Unemployment Insurance Claims at Orkney Mine UIF claims processed: 1st April 2009 – 31 August 2011 • 1107 UI claims for former Pamodzi Gold Orkney (Pty) Ltd employees were processed after receipt of employer declaration • A total of 1035 claims were approved and a sum total of R15, 238, 684.53. was paid out. • Aurora employees UI claims will be processed as and when declarations and applications are received

  22. 6. Conclusions • New claims for outstanding wages for 401 workers at Grootvlei amounting to R1,7 m will be submitted to Aurora Liquidators in accordance with the settlement agreement on 1st Nov 2011. • Outstanding wages Court Order for 1007 workers amounting to R3,9 m will be served to Aurora Liquidators on the 1st Nov 2011 and will ensure that Unions are kept informed and contribute to the process accordingly. • UIF Claims for former Pamodzi Gold mine workers will be processed as declarations are received from the Pamodzi Liquidators • UIF Claims for Aurora Orkney workers is dependant on the Unions and Aurora Liquidators agreeing on the future of these employees. DOL will pay UI as soon as declarations are received. • DOL will participate in the Master of the High court Inquiry so as to be appraised on developments

  23. Thank you Sam Morotoba On-behalf of the Director General: Labour

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