/ 26 June 2024

Grindrod Logistics workers strike over retrenchments

Unions have said the trend of making workers casual and the use of brokers to source labours on a three-month contract basis was rife in the logistics sector. Photo: grindrod.com

The South African Federation of Trade Unions (Saftu) has thrown its weight behind the Grindrod Logistics workers’ strike over retrenchments and the trend among companies of casual labour, as well as the use of brokers.

The strike comes just days after Transnet National Ports Authority announced last week that Grindrod Logistics’ holding company, Grindrod South Africa (Pty) Ltd – had won the bid to develop a R285 million container terminal at the Port of Richards Bay. 

The project will increase cargo handling capacity from 50 000 to 200 000 twenty-foot equivalent units a year. Grindrod South Africa has a 49% stake in Grindrod Logistics, while Maersk Group owns 51%.

The federation “stands firmly” behind its affiliate, the Tirisano Transport and Services Workers Union (Taswu), which on 21 June downed tools in protest against retrenchments and dismissals affecting more than 85 truck drivers, Saftu spokesperson Trevor Shaku said this week.

“Grindrod Logistics Ltd is behaving capitalistically in line with the pattern of de-industrialisation of retrenching its workers while increasing the use of subcontractors and labour brokers,” he said.

“This move is aimed at reducing permanent positions within the company and casualising. Having uncovered this casualisation pattern, Taswu has decided to resist.” 

The decision to retrench workers and make them casual labour was motivated by “the profiteering motive, not because the business is struggling”, he asserted.

“Retrenchments are mostly considered when companies want to maximise their profits, and casualisation is the instrument that companies use to retain the quantity of labour without having to pay the requisite amount for that labour.”

Shaku said the union was opposed to the “casualisation” of workers because it placed them in a precarious position with no job security, often becoming victims of employers who restricted their right to association.

“The ILO [International Labour Organisation] report on non-standard work has shown that casual work has been on the rise. Casual work or non-standard work is problematic in numerous ways, prime among which is the contribution to the decline in wage levels, security of employment and hampering the right to association,” he said.

Taswu deputy general secretary Mxolisi Hlengwa said the company had begun the cycle of retrenching workers “while introducing multiple sub-contractors also making labour brokers fashionable”.

“This is a clear indication that the company wants to get rid of permanent staff, Hlengwa said. The union had been informed that Grindrod had retrenched workers, only to later employ them through labour brokers.

“We are also aware that the affected workers trucks were sent to Durban and are operating under labour brokers. We know that workers employed under labour brokers do not qualify for remuneration packages and are paid less than permanent staff …This is also a strategy used by employers to exploit desperate individuals.” 

Hlengwa said Grindrod had claimed that it is not making profit, but had reported a 16% rise in profit in the 2023 financial year. 

“We have requested for their audited financial records, which were never received, but received their management accounts. The union auditors have confirmed that the company would still make profits should they reduce sub- contractors and increase their own labour.” 

He said the retrenchments placed a strain on the affected employees and their families.

“With the increase in the South African unemployment rate, we cannot have companies dismissing workers unfairly. We urge Grindrod to reinstate the unfairly dismissed workers and those facing retrenchments to return to their place of work.” 

Hlengwa said the trend of making workers casual and the use of brokers to source labours on a three-month contract basis was rife in the logistics sector. Workers are hired for the period, and then replaced with different workers, in a bid to comply with the Labour Relations Act, which does not allow employees to remain on perpetually renewed short term contracts, he said.

A spokesperson for Grindrod Logistics had not responded to questions from the Mail & Guardian by the time of publication.

Commenting on the casual work trend, Cliffe Dekker Hofmeyr director, Phetheni Nkuna, said based on information from  temporary employment services (TES) – also known in some instances as labour brokers – industries that make use of casual labour include logistics, agriculture and construction. 

Nkuna said the logistics sector makes use of temporary employment services, especially during limited periods when work volume peaks, while construction businesses adjust their teams based on demand, allowing them to select workers with particular skills for time-based projects. Agricultural businesses use seasonal workers for harvesting, planting, or other labour-intensive tasks. 

 “This allows for flexible hiring of employees on an as-needed basis, and reduction of costs involved with recruitment and selection processes, such as screening costs. Employers are essentially able to ‘buy what they need’ at a particular point including cover of employees who are temporarily absent,” Nkuna said.

 “The wages and benefits to which TES workers are entitled are paid and processed by the TES firm, and not the client. This reduces the salary bill and administrative processes of the client and mitigates risk …The client also avoids exposure to claims of unfair dismissal and other employment related issues by employees of the TES.”

Nkuna said this creates a “triangular relationship” between the employee, the TES and the business.

“The TES plays an intermediary role and assumes some of the ancillary responsibilities that would be typically handled by an employer,” she said.

 “In instances where TES employees earn below the threshold (R254 371.67 per annum) and do not perform temporary services as defined in the Labour Relations Act and where the TES employees assigned to the client for longer than three months; not as a substitute for a temporarily absent employee of the client; nor assigned to a particular work category designated by a collective agreement or sectoral determinations as a temporary service; then the TES employee is deemed to be the employee of the client,” she said.  

“TES employees who are deemed to be employees of the client must be treated on the whole no less favourably than a permanent employee of the client performing the same or similar work.”

She added that part-time employees should be treated on the whole no less favourably than full time employees doing the same or similar work.

She said the aim of the legislation is “to limit the employment of vulnerable, lower-paid workers by a TES to genuine and relevant temporary work.”

“The practice of replacing permanent staff with TES workers at lower wages and further replacing TES workers after the expiry of the three month period can hinder internal growth, job security, skills development and retention, and potentially result in operational instability,” Nkuna said.