Sustainable development 2014
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AT A GLANCE OUR APPROACH TO CREATING VALUE OUR GOVERNANCE AND MANAGEMENT APPROACH
SAFE AND EFFECTIVE PEOPLE WHO RESPECT AND CARE SOCIAL CAPITAL AND LICENCE TO OPERATE CONSERVING NATURAL RESOURCES AND MITIGATING IMPACTS
APPENDIX CONTACT DETAILS AND ADMINISTRATION OTHER LINKS Report selector
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SAFE AND EFFECTIVE PEOPLE WHO RESPECT AND CARE
Investing in employee relations

Being more responsive to the needs and interests of our people is critical to ensuring the long-term viability of our business, as well as the mining sector as a whole.

We recognise that our business will only prosper if we are able to recapture the hearts and minds of our employees by adopting an employee value proposition that aligns employees' personal goals and aspirations with the objectives and deliverables of the organisation. To achieve this, we will be implementing a cultural change management process aimed at developing a common vision and value system developed and owned by our people and their representatives, together with the executive and board. We will strive to institutionalise a more open, more democratic and more transparent industrial relations climate, where employees are recognised and respected as equals, based on a culture of trust and respect.

Prioritising safe production, and ensuring the health of our employees, underpins all that we do and remains key to ensuring the sustainability of our business. We seek to achieve this by focusing on promoting the right behaviour, ensuring the right practices, and providing the right working environment.

Informed by the developments of the past year, our employee relations (ER) vision is to pioneer a new, innovative, dynamic, and sustainable partnership with our employees

The period in review has been dominated by the ongoing rivalry between mining trade unions AMCU and NUM, the failure of the wage negotiations late in calendar 2013, and the subsequent five-month strike at platinum mines across the Rustenburg area.

This strike, the longest in the history of industrial relations in South Africa, has revealed significant shortcomings in the manner in which we, as a mining sector, have traditionally been conducting our business, and is having a profound impact on how we understand and approach our relationship with employees. The strike resulted in approximately 125 working days lost. Following the end of the industrial action at the Rustenburg operations, the Marula operations in Limpopo went on a three-day unprotected strike, demanding that the wage deal signed in Rustenburg be extended to these operations and the derecognition of NUM. These demands were not acceded to as a formal agreement had already been signed, and employees were instructed to return to work. Management continues to engage with employees to find solutions to unresolved issues.

Our strategic approach to employee relations

Informed by the developments of the past year, our employee relations (ER) vision is to pioneer a new, innovative, dynamic, and sustainable partnership with our employees and their representative bodies, with the aim of becoming the best employer in the platinum industry. Our ER mission is to ensure that our people are treated with respect and care, fairly rewarded for their contributions, empowered to raise their concerns, safely engaged in their daily duties, and able to deliver on their personal and organisational goals.

To achieve this mission and vision, we have set ourselves the following strategic goals:

Our labour relations policy deals with freedom of association, recognition of trade unions, discrimination and the rights of employees and contractors. The organisation has in place threshold agreements which clearly stipulate the different levels of rights a union may have depending on their representivity. Employees are free to join a union of their choice and are required to submit a completed affiliation form to the payroll. This allows the Company to determine the threshold of the union based on the number of affiliations relative to the bargaining level. Union affiliation is monitored on a monthly basis. The operations also have branch committees where unions and management meet to discuss employee-related matters including conditions of work. We monitor labour relations in our operations, with monthly reports submitted from the operations to the Exco. An independent third-party conducts biannual surveys on the effectiveness of our labour relations. We respect the independent status of unions and the right of our employees to associate, or not to associate. We distance ourselves from, and condemn, any attempt to differentiate between people on the basis of colour, religion, gender or creed.

Currently 92% of our permanent employees are covered by collective bargaining agreements. These agreements address issues relating to salary and benefit reviews, the participation of unions in decision-making at different forums, and consultation and notice periods regarding any significant organisational changes. The minimum notice period for any organisational change or activity at Implats' operations is 30 days.

In response to instances of intimidation, we have taken a harder line on discipline, especially with respect to reported cases of assault and violence in line with the Framework Agreement facilitated by the Deputy President. This action needs to continue to send a consistent message that workers who misconduct themselves will face severe consequences, even if this action elevates the risk of illegal work stoppages.

Our 2014 performance on employee relations

Our principal focus during the reporting period has been on addressing the issues associated with the intense rivalry between AMCU and the NUM, and dealing with the outcome of the wage negotiations with AMCU and the subsequent five months' strike in Rustenburg. While we made some initial progress early in the reporting period in delivering on our ER commitments made last year – relating in particular to improving employee communications and delivering on our shared corporate values initiative – these initiatives were significantly impacted by the strike.

The unaffordable wage demand

Throughout the five-month Rustenburg strike (from 24 January to 24 June 2014) a key demand by AMCU was the much publicised call for a R12 500 per month basic wage for entry-level underground mine workers, most of whom were on a basic rate of R5 500 per month. Given the context of current and anticipated PGM prices, and the existing cost structure, this level of remuneration is unaffordable for the three affected platinum mining companies, each of whom can barely cover their sustaining capital expenditure costs. For Impala this is illustrated in the graph below.

 

The wage demand problem (R/Ptoz)

    

Our original wage offer problem (R/Ptoz)

The final settlement concluded on 25 June 2014 contains the following principles for a three-year duration:

  • An annual wage increase of R1 000 per month for employees whose basic wage is less than R12 500 a month for the first two years of the agreements, with an increase in the third year of R950 a month
  • Employees currently earning R12 500 a month or more, or whose basic rate reaches that amount during the course of the agreement, will receive an 8% increase for the first two years of the agreement and 7.5% thereafter
  • The living-out allowance will follow inflation for the first year and then remain constant for the next two years
  • Fringe benefits will generally, during the course of these agreements, increase by amounts linked to the inflation rate
  • All employees received, within one week of their return to work, the back pay due to them from their 2013 increase date.

    Guaranteed pay (entry-level underground employees) 
      Year         cash remuneration   annual     benefits               annual
      NOW   Basic pay       Holiday leave allowance/
    13th cheque      		   Living out
    allowance      		 Total cash remuneration     Estimated
    medical      		   ER provident/
    retirement      		 Guaranteed package  
        R5 500       R458     R1 850     R7 808   R93 696   R600     R888     R9 297  
    R111 564
      1 July 2013   Basic pay       Holiday leave allowance/
    13th cheque      		   Living out
    allowance      		 Total cash remuneration     Estimated
    medical      		   ER provident/
    retirement      		   Guaranteed package
    R1 448  
        R6 500       R542     R2 000     R9 042  R108 804    R654     R1 050     R10 745   R128 940
      1 July 2014   Basic pay       Holiday leave allowance/
    13th cheque      		   Living out
    allowance      		 Total cash remuneration     Estimated
    medical      		   ER provident/
    retirement      		   Guaranteed package
    R1 199  
        R7 500       R625     R2 000     R10 125   R121 500   R706     R1 113     R11 944  R143 328 
      1 July 2015   Basic pay       Holiday leave allowance/
    13th cheque      		   Living out
    allowance      		 Total cash remuneration     Estimated
    medical      		   ER provident/
    retirement      		   Guaranteed package
    R1 149  
        R8 450       R704     R2 000     R11 154   R133 848   R759     R1 179     R13 093 R157 116