Sugar and property giant Tongaat Hulett, crippled by a Steinhoff-style corporate governance scandal, will start retrenching workers and evicting them from its farms from the end of this month.
Although the full extent of the retrenchments by the company are not yet known, up to 5 000 jobs, mainly in its sugar division, are on the line as a result of the company’s huge financial losses.
In May, Tongaat’s new chief executive, Gavin Hudson, suspended trading of the company’s shares on the JSE and announced a forensic investigation into its accounting practices. The company’s annual results will be released next month.
Tongaat has issued section 189 retrenchment notices to 5 000 of its 30 000 employees as part of a “headcount reduction” aimed at keeping Tongaat afloat.
The company has charged two of its former executives with fraud. It has also begun identifying which of its farms, in KwaZulu-Natal and Mpumalanga, to sell off.
Workers on three of the oldest Tongaat Hulett farms north of Durban — Hillhead Estate, Burnside Estate and Blackburn Estate — face losing their jobs and homes.
Although workers at Hillhead told the Mail & Guardian this week that they hoped whoever bought the farm would keep them on, most were already packing up their two-bedroom family houses and looking for accommodation in the nearby shack settlement.
The company has also applied to the eThekwini municipality to have the farms, situated near the Cornubia shopping mall, rezoned for general industrial use. Workers said representatives of a bank had been on site to value the equipment and buildings on the farms, suggesting that they would be sold for industrial or warehousing purposes and not to a farmer.
At Hillhead, 30 of the 37 redbrick houses, which are more than 100 years old, are occupied. The others are in a state of disrepair. A church and a Hindu temple on the farm are both well maintained, as is the single quarters across the hill, which houses migrant cane cutters from the Eastern Cape.
One of the workers, a father of four who has been with the company for more than 30 years, said he did not know what was going to happen.
“We got letters saying our jobs are done and we have to go from here by the end of September,” he said. “We are waiting now to hear what we are going to get for our years served. We don’t know if the person who buys this place will give us jobs.”
The man, who asked not to be named for fear of reprisal from the company, said he had started looking for somewhere to stay in the nearby shack settlement.
“There’s nothing else I can do. From October there is no salary, so where else can I go. I worked here since 1985, but I don’t have money to go and buy a place, or to rent somewhere. We earn less here. I get R5 500 a month. Where can I rent, when I don’t even have that?”
“My youngest child is 13. Where am I going to get another school in October? What school will take a new child then?” he asked.
His neighbour, who also asked not to be named, has been with Tongaat for six years. His father worked for the company for half a century.
The neighbour, a manual worker who takes home R3 500 a month, was hopeful that a new buyer might employ him, despite having been given notice.
“I grew up in this place,” he said. “I don’t have anywhere else to go. If they are re-employing people we will be able to stay. They told us there’s a new owner, so I hope he will give us a job.”
The man, whose wife and 28-year-old son share the company house with him, said he had been “lucky” to get his existing job.
“The money isn’t good but we don’t pay rent and lights and water. We can grow here. I walk to the beach when I’m off to go and fish. We were okay until April, when they gave us the 60-day notice,” he said.
The Phoenix Tenants and Residents Association has opposed the proposed rezoning of the area by the municipality in a bid to stop the farmworkers being evicted from their houses and to preserve community facilities such as the temple and church.
The spokesperson for the association, Mervin Govender, said they were also trying to secure legal representatives for the farmworkers to challenge the eviction in court.
“Some of these workers are the descendants of indentured labourers who were brought here by the sugar barons, yet they are being discarded after generations of their families being exploited.
“Most of them have a low skills set and won’t be able to get work elsewhere. The least the company could do is leave them to live in these houses, rather than throwing them off the land,” Govender said.
Food and Allied Workers Union KwaZulu-Natal secretary August Mbhele said they had not received further communication from the company about its intentions since June.
“There is nothing new that we have heard from Tongaat,” Mbhele said.
Tongaat Hulett spokesperson Michell Jean-Louis confirmed that “notice of retrenchment and appropriate severance packages” had been issued to “some” workers on its farms, but declined to provide details.
She said the company had started to “reduce its direct sugarcane farming activities” in South Africa as part of its “strategic review and turnaround process”. Farms that had been earmarked for property development in the future would be kept under sugar for the next 18 to 24 months by bringing in “third party growers” to take them over, she said.
Jean-Louis said Tongaat Hulett would work with the new operators to try to reduce job losses.
She also said that the company would provide more detail about the forensic audit and the criminal charges when it released the results.