Impasse between Clover and workers heads to court
Unions representing striking employees say they will seek recourse in the labour court as none of the interventions to resolve the deadlock between them and the dairy company has borne fruit.
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15 March 2022
The General Industries Workers Union of South Africa (Giwusa) and Food and Allied Workers Union (Fawu) have vowed to intensify their fight against austerity measures at Clover after their latest negotiations with the dairy company collapsed.
Thousands of workers belonging to these unions have been on strike since 22 November calling for an end to factory closures, retrenchments and salary cuts. The negotiations had resumed on 28 February when Minister of Employment and Labour Thulas Nxesi convened an urgent meeting with the parties. It is believed that he intervened at the behest of the Consumer Goods Council of South Africa, which complained that the months-long strike has severely affected businesses that sell Clover products.
The failure to reach a resolution was caused mainly by austerity measures that, according to Giwusa, consists of up to 62% salary cuts, compulsory work on public holidays and 12-hour workdays, among others.
On 8 March, Clover sent a final offer that the unions needed to consider to Thembinkosi Mkalipi, the chief director of labour relations in the Department of Employment and Labour. The company proposed a three-year wage agreement comprising a 4.5% wage increase in the first year, which began and ended last year, 3% in year two and 3.5% in year three, ending in November 2023.
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“This wage agreement will replace any prior wage agreement entered into with Fawu on 9 November 2021,” Clover group manager of legal and secretarial Steven Velthuysen told Mkalipi in email correspondence. “We will take back the 700 retrenched employees (who did not accept the salary cut). The salary reductions will be limited to 30% overall,” he said.
Velthuysen added that the employees whose salaries were still above the compa-ratio – a compensation analysis tool – despite having been cut by more than 30% will not qualify for an increase in year two and onwards until such a time that their salaries are 20% higher than the market rate. And once this compa-ratio is reached, increases will be applied proportionally.
“Employees will receive an upfront six-month lump sum payment (or paid monthly if they choose) of the difference between the old and the new salary, and the 4.5% salary increase applicable in year 1 will apply retrospectively from 1 June … to 30 November 2021.” He said all other austerity measures would be implemented and Clover would not reverse its decision to retrench 111 employees whose positions had become redundant.
Divisions hit unions
However, the unions couldn’t concede to these terms as they were mandated by their members to enter only into a two-year wage agreement, which was supposed to end next year. But when it became clear that Clover wouldn’t be persuaded, divisions between Giwusa and Fawu over certain important issues developed.
Although they have worked together on the ground, Giwusa was caught by surprise that Fawu was in principle agreeing to a salary cut of 5% – but Fawu said it had no choice. “This is not that we are agreeing to salary cuts. It is just for compromising because the company does not want to move [on its offer],” said Moyoyo Mongalo, Fawu’s shop steward at Clover in Clayville, Gauteng.
The national organiser of Giwusa, Charles Phahla, said he asked Fawu when it had received a mandate from its members to accept salary cuts. “They said they had a national shop steward council meeting with the national office bearers of Fawu and that’s where a decision in principle of a wage cut was taken,” Phahla said. “Then I said to them this is contrary to the mandate I have from members. As Giwusa we would not agree to this … [as workers] never gave us such a mandate.”
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Instead of a salary cut, Giwusa proposed a salary freeze for workers at Clover, including management and executives. But, Phahla said, Clover management wouldn’t agree to this as it directly affected them.
Asked why Clover didn’t consider a salary freeze, Velthuysen said it would “not realise the savings that are required in order to reduce costs. Secondly, if I understand correctly, the wage freeze was for across the board, meaning every employee at Clover. If you want to do that, you need to start the whole process again from scratch and it depends on who’s prepared to accept a wage freeze like that.”
He added that the unions bluntly refused to accept any salary cuts despite their being the only alternative to outright retrenchment. They also did not accept any of the austerity measures, which were already being applied across the business.
Too little give
Velthuysen said Fawu’s concession to a 5% salary cut was also not enough. “You can agree 5% and 30% is a massive gap. If they can start from 15%, we can try to come close to one another. If they counter us, we can see where we can manoeuvre some of the other issues on the table. They expect us to come with offers all the time and … we don’t know how far they are willing to go.”
Velthuysen said Clover was now giving striking workers a final opportunity to return to work, “failing which, we are not taking them back anymore and we will replace them with employees [who are] willing to work under those conditions”.
But the president of Giwusa, Mametlwe Sebei, said: “We will continue fighting and we are trying to relaunch some mass activities. As long as the workers are determined to fight, we are prepared to fight. The role of the union is to support workers in their struggle.”
Following the collapse of the latest round of negotiations, striking workers occupied the offices of the Industrial Development Corporation in Sandton on 10 and 11 March. They demanded that the Department of Trade, Industry and Competition buy Clover from the Central Bottling Company and its subsidiary, Milco, and the withdrawal of police from Clover factories, among other issues.
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In a statement released on 11 March, Giwusa said when President Cyril Ramaphosa heard that the workers had occupied the offices, he intervened by calling Lionel October, who is a mediator and a special envoy of Minister of Trade, Industry and Competition Ebrahim Patel, to resolve the impasse.
October then met with Paul Benjamin — who advised the government during the drafting of recent amendments to the Labour Relations Act and also acts as a judge in the labour court — to discuss the legality of Clover’s restructuring, especially the wage cuts and retrenchments.
“Clover is in breach of the law. If Clover doesn’t desist from its current course, parties are now going to refer the matter to court for recourse on an urgent basis to compel Clover to fully restore workers to their conditions before the November dismissals,” Giwusa said in the statement.
