28 June 2018
When Pracash Arendse got a job at the Isolar factory in Atlantis he was excited that he would be able to provide for his family. Jobs are hard to get in this suburb north of Cape Town, and many households live in poverty.
Arendse, who lives in Atlantis’s Protea Park, is now facing a daunting task of providing for his wife and three children because he and his fellow employees last received wages in February.
Isolar manufactures solar geysers. Because of a lack of orders from the Department of Energy, the company has been on the verge of closure with 85 jobs at risk. GroundUp has reported how the company has been let down by government. The company started in the first place because of a government subsidised programme to buy solar geysers. But the programme has crashed due to a budget cut from R384 million to R0.
With no funds in sight to pay its employees, the company advised its 85 employees to claim benefits from the Unemployment Insurance Fund (UIF).
But the employees have not been through a retrenchment process, and according to labour lawyer Michael Bagraim this is illegal. “They haven’t been dismissed yet. They should have been retrenched first to get UIF and severance payment,” said Bagraim.
He advised the factory’s employees to go to the Department of Labour to lodge a complaint about non-payment of wages and thereafter to go to the Commission for Conciliation‚ Mediation and Arbitration (CCMA) to launch an application for unfair labour practices.
Andre Fourie, Isolar’s general manager, said his employees haven’t been paid for two months. So the factory advised them to claim UIF during the dry spell of no wages. He said that the company checked this with the Department of Labour.
Asked if the factory would back-pay the employees once funds start flowing, Fourie said workers won’t get paid for the period they have claimed UIF. “We are going to pay them according to labour laws,” he said.
He added that the government’s collapsed solar water heating programme has been revived. “It seems the politicians are getting their acts together. Unfortunately dealing with the government … they have a lot of things they need to sign. We are not optimistic that on ground level we can change government thinking. We are communicating with them … We have been in Parliament…but they are just going on their pace. I am not saying they don’t care. I am sure this thing [the solar water heater programme] is going to run,” he said.
He said the programme was paused in early 2018 because there were a lot of documents that needed to be sorted out for the state’s strict tender rules.
“Once they approve, everything is going to go ahead. It’s not an overnight signing. I understand it has to go through a lot of legalities so it doesn’t become another Gupta story,” Fourie said.
He said because of the delays in the process, the factory could not pay staff.
“Workers don’t understand the process [with government]. They just accuse the company of not paying them. If we don’t get orders we don’t get paid and if we don’t get paid we can’t pay the workers. We are trying to survive this period so the guys can continue with work,” he said.
Fourie said the programme was a must-have for the country and government is committed. “It’s looking brilliant. The cheque has been written and signed but we haven’t received it yet,” he said.
He also said the factory was 100% black-owned. “You cannot allow a company that ticks all the boxes to close down. We have done nothing wrong,” he said.
Arendse said he was paying off a Wendy house in which his family was living. But because his debit order bounced because of lack of funds in his bank account, it has been repossessed. So he, his wife and children, have moved in with family of his wife, where they were now renting a room and his wife was paying for it.
Another factory worker Nigel Rossouw said the workers earned R3,200 a month. He said some of his colleagues, because of lack of food in their homes, have claimed UIF.
But the danger of this, he said, was that these colleagues were now no longer employed by the factory and could not receive a retrenchment package nor proceed with litigation at the CCMA.
Both Rossouw and Arendse questioned the legality of the R3,200 per month wage because it is substantially below the minimum wage per month for metal workers (about R7,000 per month).
“Government pays a lot of money to the factory. I want to know how is it possible to get paid R3,200 month but other metal industry guys get well paid. But Isolar is a very nice place [environment] to work. The only problem is the money,” said Rossouw.
Bagraim said the R3,200 salary was unacceptable as the factory workers should have been receiving a minimum wage for their industry. Regarding the factory not being able to pay workers because of not getting orders from government, Bagraim said it was not the employee’s problem.
“They should have retrenched the staff. They cant use the lack of orders from the government as an excuse. The staff is not management … They have the protection of the Labour Relations Act,” he said.
Mike Mulcahy, chief executive of GreenCape, said the solar water heater industry in South Africa has been experiencing extreme difficulties.
“The programme has changed several times, and has now ground to a halt. The manufacturers that have set up to supply into the Department of Energy program have all but closed. The uncertainty triggered by changes in policy and programs by the government has devastating effects on small manufacturers and their employees. I feel very sorry for Isolar and the others. It must be extremely difficult to run a business when the program rules shift under your feet,” said Mulcahy.
The Department of Energy was approached for comment on 19 June. Despite repeated follow-ups and promises, the department failed to comment for this article.