SABMiller subsidiary workers battle for incentive payout
Without a signed agreement, more than 70 workers of an SABMiller subsidiary, Coleus Packaging, believe they can wave goodbye to a final payout from the Coleus share incentive scheme, which was started in 2006.
Coleus is South Africa’s biggest supplier of metal crown bottle tops for the brewing and bottling industries, according to the company’s website. It also states that in 2006 SABMiller sold 40% of Coleus to Nokusa Consortium, a black economic empowerment (BEE) investment company.
Two former and three current employees say staff were told they would be given an incentive if they reached agreed-upon sales targets for the next three years.
Clifton Magadla (67), who retired from Coleus after many years of service to the company, lives in a village near Mthatha in a house that is falling apart. He says there is no sign of the commitment he made to the company and all he wants is his money from Coleus. He says that every day, when he looks at the collapsing roof of his house, he is reminded of the money he lost to Coleus.
Collins Twala (55), who worked for Coleus for 27 years before retiring, says he was promised a bonus payment. He lives in a small four-roomed house in Katlehong.
Twala says the company asked him and his colleagues to work hard to achieve the targets. “The shop steward at the time told us about this, saying that it was part of the BEE deal the company struck. He said we would be paid good money, so we worked hard.”
Twala says Coleus offered the first payment in 2009. Coleus concurs, saying that it was offered to 78 employees.
“We were told that because we met the target the company would pay us R30 000 in three instalments over three years,” Twala says.
According to a 2009 letter from the then managing director, Steven Jowell, of which the Mail & Guardian has a copy, workers could either take the bonus or ask for it to be reinvested in the company scheme to attract interest and increase in value.
Twala says: “We [he and other workers] decided that we wanted the money to be paid in instalments of [just over] R10 000 over three years [2009, 2010 and 2011]. That way, we could have a better life when we left.”
In July 2010, according to a Coleus memorandum, workers were offered the second payment of R17 904, which Twala says was paid with interest, and so was more than their capital amount.
“I knew I was going to retire soon and would have little to no income, so I put my money aside. My house was falling apart and I wanted to renovate it, so I could live a decent life. I thought this money would help in my retirement years,” said Magadla.
Twala says he decided to reinvest the second bonus with his first bonus payment, and waited for the third. He received a letter from Coleus confirming that his investment had now grown to R35 808.
In 2011, Coleus came under new management and when it was time for the third payment to be made the company had run out of funds.
“We had a deal with the previous management that we had to work three years to increase sales and in the next three years we would reap the benefits but they simply told us that there was no more money,” Twala says.
He says he and other workers approached their shop steward, but were told there was nothing that their union, the National Union of Metalworkers of South Africa, could do because employees had a verbal and not a written agreement with the former management team about a payment for the third year. The union had not been involved formally in negotiations.
At this time, the new management team started to offer employees voluntary retrenchment packages.
Twala took up this option, but says the bonus he was owed wasn’t in his retrenchment package. “I took my retrenchment package and left.”
Twala started to enquire about his bonus in 2013. He says when he visited Coleus he was told there was no money to pay him.
“A woman from the human resources department at Coleus called me and shouted at me [as though I was] a child. She said that everyone had lost out; I wasn’t the only one Coleus didn’t pay out and why was I going to SAB head offices to complain,” Twala says. “She told me to just give it up. But this was my money. I worked hard for it.”
Over the next three years, Twala also contacted SABMiller, but each time was told to contact Coleus instead. When the M&G sent questions to Coleus about the treatment of its workers, it was SABMiller that responded first. In a statement Coleus said workers were not entitled to the last payment.
“The purpose of the scheme was to empower, motivate and reward employees by allowing them to participate in the value generated by the business. The scheme, which ran from 2006 to 2011, was closely linked to the profitability of the company and the rules clearly stated that if the company was not profitable no payment would be paid,” said human resources manager Michelle Chetty.
She said the workers knew that the reinvesting option came with a risk of nonpayment. But she added Coleus has – seemingly just after receiving the M&G’s questions – decided to pay Twala and Magadla.
“As a goodwill gesture and without prejudice or acknowledgement of any liability to do so, the company has agreed to pay out Mr Magadla and Mr Twala the lost reinvested value, plus interest as per the rules of the scheme,” said Chetty.
Twala is baffled. “I don’t understand what took them so long after all the years I went back and forth [with] SAB and Coleus denying that I had a right to the money I worked for. I don’t know what will happen to other workers who won’t get their last payment.”