Portfolio Committee on Mineral Resources 13 April 2011

1. Briefing on Aurora Developments with regard to payment of Outstanding Wages and Unemployment Insurance Benefit at Grootvlei and Orkney Mines Portfolio Committee on Mineral Resources 13 April 2011

2. PRESENTATION OUTLINE 1. Background 2. Legislative Mandate 3. DOL Interventions in Payment of Outstanding Wages and Unemployment Insurance Fund 4. Conclusion

3. 1. BACKGROUND • The DOL Springs Labour Centre first received complaints from employees of Aurora Grootvlei during July 2009. • The Aurora Orkney employees reported their complaint to the Klerksdorp Labour Centre during September 2010 • The DOL labour inspectors took up the case and have had a number of documented meetings with the employees, employers and trade unions in both Springs and Orkney.

4. 1.1. Background The Complaints centred around: • 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. Background • Amongst other aspects that delayed the payment process were: - Broken promises by the employer to honour agreed commitments; - Consultations with Employers, NUM, Solidarity and employees, - Insufficient basis to enforce compliance to agreed commitments, - Insufficient information from employees to verify extent of outstanding wages,

6. 2. Legal basis for DOL intervention Inspectors were provided with legal assistance from Head Office to ensure some movement on the case. Key legal aspects identified included: • The basis for DOL intervention in the Aurora Mine was to address the employers contravention of 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 in invoked which provides for labour inspectors to issue a Compliance Order.

7. 2.1. 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. • DOL has a legal obligation regarding the payments of Unemployment Insurance benefits in terms of the provisions of the Unemployment Insurance Act.

8. 2.2. Other Aurora aspects that impacted on the operationalisation of the DOL mandate The following aspects impacted on the DOL mandate and some went beyond the 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, • Plight of workers earning below and above the threshold of R149 575.00 p.a; • Migrant employees who worked at the mine and has since left; • Unacceptable living conditions employees at the hostel; • Security problems at Aurora mine shafts;

9. 3. DoL Interventions at Aurora Mine - Grootvlei • In line with the BCEA provisions, DOL inspectors tried to secure a written undertaking from the employer to pay outstanding wages after gathering information from former employees. • The Total amount owed to employees earning below and above the R 149 575.00 threshold was around R4 million. • DOL only intervened on-behalf 1 238 workers earning below the threshold owed a total amount 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.

10. 3.1. DoL Interventions at Aurora Mine - Grootvlei • As a result of the compliance order, an amount of R2,03 million was transferred to the DOL account by Aurora Mine – Grootvlei, in respect of arrear wages for workers qualifying workers in accordance with Section 68(c) of the BCEA. • The DOL Springs Office proceeded with preparation for payment to 1 278 qualifying workers whose details were included in the Compliance Order.

11. 3.2. DoL Interventions at Aurora Mine - Grootvlei • The Springs Labour Centre officials had to work overtime from Monday 13 December to do the calculations and to prepare and verify the schedule of payments, • Arrangements were made with the Grootvlei management to utilise their premises for the pay-out because of security concerns. This was granted, • On the 14th December a team from Head Office Finance led by the CFO provided assistance to the Labour Centre with the verification of schedules and preparation of money required from the bank. (3) NUM Shop Stewards also participated in the process • The team also visited the mine to check the facility, to make logistical arrangements for the pay-out and had meetings with the Springs SAPS regarding further assistance required.

12. 3.3. DoL Interventions at Aurora Mine - Grootvlei • The cash pay-out continued during the 15, 16th and 17th of December 2010 and DOL paid overtime to involved employees and also provided them with food and water. • During these three days period a total of 715 (57,8%) workers reported to the premises and received R765,115.00 payment in cash. • Further arrangements were made to ensure that there are staff in the DOL offices throughout the festive season to process outstanding claims.

13. 3.4. DoL Interventions at Aurora Mine - Grootvlei • During the pay-out exercise additional workers than those that were on the Compliance Order also arrived to claim monies due to them, but could not be assisted as their information could not be verified. • A total of 300 workers who were on the Compliance Order list did not arrive to collect their outstanding wages. Amongst this number about 50 workers who were due to receive over R10 000.00 as their payments. • To accommodate these workers, arrangements were made for the Springs Labour Centre to arrange for a cheque payment or a bank transfer in those instances where there are active bank accounts as from the 20th December 2010. • Arrangements were also made for those workers who were not on the schedules to lodge formal complaint and to provide all information to support their claim.

14. 3.5. DoL Interventions at Aurora Mine - Grootvlei • Progress since 20 December 2010 to 15 March 2011: • 270 workers were assisted with Cheque or EFT payments • 291 workers have still not made contact with the Department to claim their monies. • DOL is working with the NUM and other former employees to trace these workers. • A total of 493 new complaints for unpaid wages has been received. • The DOL Inspection and Enforcement Services (IES) unit are processing these complaints and a new Compliance Order will be served on Aurora before the end of April 2010 for payment of these outstanding wages.

15. 3.6. DoL Interventions at Aurora Mine - Grootvlei The Payments Breakdown on of funds transferred to DOL: December 2010: R787,943.05 January 2011: R443,390.71 February 2011: R366,680.90 March 2011: R388,222.89 The total of all payment made amounts to: R1,986,237,55, Total still held in the DOL trust for outstanding cases amounts to: R45,797.10

16. 3.7. DoL Interventions at Aurora Mine - Grootvlei Financial implications of DOL involvement: • Lunch and water for the three days at the Mine cost DOL about, R2600.00; • Overtime payment for the officials based on their different earnings; • Payment of an additional 4 security officers for Springs for 2 weeks, R9800.00; • Payment of security for the transport and safekeeping of the money.

17. 3.8. DoL Interventions at Aurora Mine – Grootvlei: UIF Benefits • UIF benefits could not be processed because the workers were technically still employed by Aurora, and therefore could not claim for UIF. • Meetings were held with the workers to explain this state of affairs and to agree on a way forward. • A total potential 3000 claimants has been identified, 800 applications were received by 22nd March and Declarations are still outstanding from employers

18. 3.8. DoL Interventions at Aurora Mine – Grootvlei: UIF Benefits • A meeting was also held with the Aurora management and worker representatives on 22 March to find common ground and agree on a way forward on UIF payments. The meeting resolved: - 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.

19. 3.9. DoL Interventions at Orkney Mine – • The DOL and COSATU/NUM process to compel Aurora to pay outstanding wages commenced during October 2010. • The total amount owed to 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 owed money into the bank accounts of all staff members.

20. 3.10. DoL Interventions at Orkney Mine – • DOL request for an Undertaking to settle and subsequent Compliance Order was served to Aurora on 15 February 2010 concerning workers earning below the threshold and demanded Aurora to pay R3.95 million. • Aurora has failed to comply with the Order and have not raised an objection to the Compliance Order; • 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 Aurora company will be served with papers by no later than Monday 18th April 2011.

21. 4. Conclusions • The DOL intervention in terms of Section 32 of the BCEA for payment of outstanding wages has been a very complex process. • There are other factors around Aurora that do not fall within the scope of DOL that cannot be overlooked in this process. • DOL is committed to continue tracing all eligible ex-Aurora Mineworkers including migrants to ensure that they receive their outstanding wages, overtime payments and Unemployment Insurance benefits. • DOL depends on the cooperation, wisdom and assistance of the Unions, the Aurora Management, the Labour and Mineral Resources Portfolio Committees, Department of Justice and Constitutional Affairs and other related Departments if we are to change the lives of Aurora Mine Workers. • DOL will undertake a review of progress made during September 2011 and propose further measures should the need arise.

22. Thank you Sam Morotoba Acting Director General: Labour