Oil-price squeeze on Sasol leads to misery for axed contract workers

May Mahlangu, a former contract employee of more than 14 years to a company contracted to Sasol to provide laboratory services, is loitering at home with gloomy prospects of finding employment.

This father of four said his woes and those of 22 colleagues started at the end of last year when his company told him that his contract had ended. It could no longer keep him on as Sasol was cutting back on procurement of its services.

"I am sitting here watching people and cars passing by the street because I have no job. I am almost out of my mind because I am thinking of the next possible step to support my family," he said.

Mahlangu said in his 14 years with the contractor he had only ever had a two-month contract.

"I knew that this would have serious repercussions for me at some point. But if you are unemployed, you can't say no to any form of employment. Now all is gone and I don't know where to go from here. Even if you come here tomorrow you will find me sitting here," he said.

Mahlangu's story is not unusual. His former colleagues all blame Sasol's Project Phoenix and the manner in which service providers contracted to the petrochemicals giant employed them.

Sasol, the world's biggest producer of liquid fuels from coal, plans to conserve as much as $4.2-billion (R52.37-billion) in cash in addition to its cost-saving strategy as the drop in global oil prices drag down prices of its products.

Sasol set a "cash-conservation target range" of R30-billion to R50-billion in 30 months, using December 31 as a baseline, supplementing another programme that entails savings of at least R4.3-billion a year from July 2017, it said this week.

The oil price has slumped more than 50% in six months.

The company expects average Brent crude oil prices to be at least 30% lower during the second half of the financial year compared with the first and sees the rand-dollar rate being affected by quantitative easing in Europe.

Food on the Table

But for those at the coal-face of the changes, it is a question of how to put food on the table.

"You only get your last pay. Your only next resort is the unemployment insurance fund," said Bheki Mahlangu, a father of two who had also lost his contract.

"One of my friends can't talk to you because he so stressed. His child is in a hospital in Boksburg - for about two weeks now. Since our contracts have been terminated he is keeping his fingers crossed that the medical aid keeps on paying until his child gets better and discharged at least," he said.

Mahlangu, who was a mechanical fitter contracted to Kentz, said all the people who had been dismissed are looking for employment but prospects are gloomy.

"We are all looking for a job but if Sasol cuts back chances are bad because it's the only company that we have been placing our hope on finding employment through contractors."

Sasol has been contracting for labour and other services to companies such as Ipscor, MandS, AMT, Hydra Arc's Jomele, Kentz and LTA, which were responsible for maintenance, among other services.

Nkosana Mahlangu does not have children, but is also contemplating a way to put food on the table without an income.

He said he was working at Ipscor as an equipment watcher until he and one of his colleagues were told on January 16 that the company no longer required their services.

"Later on, after that, a further four of my colleagues were told the same story. We were six in our department. I am just rushing to register for my UIF to have some cash to keep going."

"When you sign the contract, they tell you that they may terminate any time.

"I had no choice [to take the job] because I was unemployed," he said.

JAMES OATWAY Sunday Times.  

Turmoil

Khehla Mahlangu, a resident of Embalenhle Township near Secunda, who has been making a living by renting out backrooms to contracted employees, said Sasol's action has thrown the entire area into turmoil.

"Everybody is running around as headless chickens, scrambling for alternative employment," Mahlangu said.

"As I speak to you now I have these three guys from KZN who have not been working for months and months. They have been unable to pay rent money. I can't chase them away. It is not their fault. We are like brothers we have been staying together for a very long time."

An AMT Placement Solution representative referred all comments to Sasol. "We are unfortunately not in a position to comment on this by virtue of the service level agreement signed with Sasol. Please contact Sasol directly for comment," she said.

Sasol spokesman Alex Anderson said Sasol sources a number of contract employees from temporary employment service providers and supports the regulation of temporary employment services to ensure that temporary employees are treated with dignity.

"Sasol will always comply with all applicable labour legislation, of which the Labour Relations Act is but one of many. This is the bedrock of our relationship with all our employees, both permanently and temporarily employed personnel," Anderson said.

He said the company announced some time ago that it was conducting a business performance enhancement programme (BPEP) and a response plan, which are running parallel to each other.

"Our BPEP is focused on implementing our updated operating model to ensure Sasol is a more efficient and competitive organisation over the long term. The response plan, announced on 28 January, is a comprehensive plan being developed to conserve cash in what is anticipated to be a lower oil-price environment over a longer time frame," Anderson said.

This week, Sasol announced that first-half profit rose 6.2% after a decline in the rand-dollar exchange rate countered the drop in crude oil. Earnings excluding one-off items advanced to R19.5-billion in the six months through December from R18.4-billion year earlier.

It declared an interim dividend of R7 a share from R8 a year earlier, after changing its policy last month.

Anderson said that if the dismissed workers' allegations that they were paid only their last salaries was correct, the labour-broking companies and the contractors must have acted unprocedurally. Sasol contractors would not comment on the procedures taken in terminating employment.

Both Section 189 of the Labour Relations Act and the Basic Conditions of Employment Act state that there should be a retrenchment package under the circumstances. - With additional reporting from Bloomberg