Integrated Annual Report 2014

Human capital

Employment, employee relations and human rights

Sibanye’s corporate culture is founded on our CARE values (commitment, accountability, respect and enabling), which support our business strategy, and promote competitiveness and success.

Our CARE values are embedded within our business through continuous communication, transformation, education and training. To uphold our values, we have adopted a safety, health and well-being strategy supported by five key pillars:

  • Compliance rules are in place and these need to be followed.
  • Risks that are present in our workplaces and work processes must be identified and engineered out. We must work smarter.
  • Employee well-being is critical to our success.
  • Staying fit and healthy is a joint responsibility.
  • Relationships are important and should be based on mutual respect. Managers and employees need to share goals and engage. Teamwork underpins our success. We seek motivated and competent teams.

NEW WAY OF COMMUNICATING

To convey our CARE values to all employees in a commonly understood language, we are in the process of introducing our “New Way of Communication”.

The aim of this intervention is to eradicate the use of Fanagalo (the Zulu-based pidgin language mixed with English and Afrikaans, meaning “do it like this”, traditionally used to communicate instructions on South African mines) and replace it with the languages identified by Wits Language School (part of the Faculty of Humanities at the University of the Witwatersrand in Johannesburg, South Africa).

We believe that this will enable safer mining with a well-trained, motivated and stable workforce communicating effectively to further embed our CARE culture.

The New Way of Communication involves ongoing training as the language policy is rolled out across the Group.

Employees will receive dictionaries, training manuals, audio discs and DVDs, which will be available on the Sibanye intranet.

At the end of 2014, e-learning resources were provided (by electronic means via the Group’s intranet) to support self-learning by D Band and above (middle management) employees while recognition of prior learning in isiZulu and Sesotho were provided to C Band, D Band and below (supervisory) employees.

INTEGRATED COMMUNICATION STRATEGY

The objectives of our integrated communication strategy are to:

  • facilitate engendering an organisational culture that is conducive to the sustainable delivery of the business strategy;
  • build the Group profile and manage the Group’s reputation internally and externally;
  • build trust in and affinity with Sibanye through regular and transparent communication (sharing consistent and reliable information); and
  • create capacity and empower management to communicate effectively with stakeholders in order to ensure alignment within the Group.

Our integrated communication strategy ensures that the same message, customised for different audiences and channels, is disseminated throughout the Group, based on our CARE culture, visibility supported by Exco.

Integrated communication strategy [diagram]
Employees at year end
    2014     2013  
  Permanent employees  Contractors  Total Permanent employees  Contractors  Total
Corporate office*2,8958973,792248248
Beatrix7,4448068,2507,9635658,528
Cooke5,5702,0517,621
Driefontein10,42567211,09711,86077512,635
Kloof9,79169510,48610,46976611,235
Other3,107583,1653,6283,628
Total39,2325,17944,41134,1682,10636,274
  1. * The higher number of employees at corporate office in 2014 is due to the inclusion of all operational central services and the assay laboratory.

Sibanye employed a total of 44,411 (2013: 36,274) people 39,268 full-time permanent (2013:33,773) and 5,179 full-time contractors (2013: 2,501) in 2014. The net increase in employees at Cooke led to an additional 5,570 permanent employees and 2,051 contractors being integrated into the Group.

  • In terms of Section 197(6) of the Labour Relations Act, the Group reached agreement with stakeholders to terminate the services of employees employed at the Leslie Williams Memorial and St Helena Private hospitals with effect from 1 July 2014 due to the sale of these assets to African Healthcare Proprietary Limited. In this regard, 249 positions were terminated and the majority of these employees were re-employed by African Healthcare.
  • On 12 September 2014, the Group issued Section 189(3) notices to Ezulwini Mining Company Proprietary Limited (Ezulwini or Cooke 4), Rand Uranium (Cooke 1, 2 and 3), Sibanye Gold Limited and Sibanye Gold Protection Services Proprietary Limited due to the dire financial circumstances experienced by Cooke 4 with the possibility of placing the mine on care and maintenance or closing it. Some 1,776 jobs were in jeopardy. During the consultation period, the parties managed to reach agreement on a number of avoidance measures so that no employees were ultimately retrenched.

Changes made to Cooke management structures included one Vice President and general manager terminating their employment, and Cooke 4 being consolidated under the existing Vice President structure.

A total of 80,593 man days were lost to absenteeism without permission and unresolved absences in 2014 – this excludes sick, annual and accident leave shifts.

Minimum notice periods in respect of operational changes are prescribed by legislation. Committed to fair and progressive employment practices, we provide long-term employment opportunities with scope for growth and development of potential in all employees. As people are the mainstay of Sibanye, it is essential that we invest in them to grow the business and ensure its sustainability. By recognising their expertise, skills and talents, we can also run the business more efficiently and cost-effectively.

We also provide training for community members who are not employed by Sibanye – as prospective employees are sourced from these areas adjacent to our operations. Human capital development within these communities is part of our role and obligation in respect of socioeconomic development.

Sibanye also provides employees with training in policies and procedures regarding aspects of human rights as part of the Group’s return-from-leave and new-engagement training process. A clear and fair system is in place to deal with discrimination and human-rights breaches.

Our employment practices and policies are further governed by legislation and regulations that have evolved in South Africa’s labour-relations environment and transformation landscape. These include the Labour Relations Act, the Mine Health and Safety Act, the Employment Equity Act, the Skills Development Act, 1998 (Act No 97 of 1998) and Skills Development Levies Act, 1999 (Act No 9 of 1999), the Minerals and Petroleum Resources Development Act, and collective-bargaining and recognition agreements with organised labour.

As far as possible, we seek to employ locals within 50km around local communities at our operations. As at the end of 2014, 31% (2013: 25%) of our employees could be defined as local (drawn from within the province of operation). A large percentage of employees with core skills, experience and many years of loyal service are also drawn from other provinces in South Africa and neighbouring countries (labour-sending areas), within the Southern African Development Community (SADC). A total of 11,311 or 29% (2013: 8,443 or 25%) in 2014 of our employees come from SADC countries. Including contractors, our total labour force comprises 4,192 or 9.4% (2013: 2,845 or 8.4%) female employees.

WHAT DOES A SIBANYE EMPLOYEE EARN?

Wages and employee benefits paid to employees by Sibanye amounted to R6,665 million (2013: R6,156 million).

Employees in the gold mining sector – working in underground and surface operations – are among the best paid of South Africa’s industrial workers. Not only are their basic wages higher than those of comparably skilled workers in other industries but a number of additional benefits are included in the overall costs of employment (cost-to-company).

Basic wages and packages vary widely, depending on the skills, responsibility, years of service and accountability each employee brings to the job, and the relative scarcity of available skills. Although basic wages may vary slightly from mine to mine, reflecting the ability of each mine to pay, many cash benefits are common across the entire industry.

The Chamber of Mines has estimated that, on average, South African workers in formal and informal employment earn in the region of R3,000 a month – wages that may rarely be augmented by other cash and non-cash benefits.

Relatively skilled workers in the construction and manufacturing sectors might be able to count on remuneration packages of R5,000 to R6,000 a month.

Since the latest wage increases were implemented in July 2014, the lowest paid entry-level underground gold mine worker has been receiving, on average, a basic cash wage of around R5,700 per month. The increase effective on 1 July 2014, in the second year of implementing the 2013-2015 agreement, applies to employees in the industry’s Category 4 employment band, who constitute relatively unskilled workers in the widely used Paterson Job Grading System.

Basic wages are augmented by agreed cash and other non-cash benefits that boost an individual Category 4 employee’s fixed monthly cost-to-company to more than R9,900 per month. On top of this fixed cost-to-company, variable benefits, such as profit share, bonuses and overtime pay can potentially lift the value of the lowest-paid underground employee’s salary and benefits package to as much as R12,570 per month.

As part of the benefits, employees in the bargaining unit receive a monthly amount for housing and food that equates to R2,000.

Another fixed monthly company-funded benefit accorded employees is a free medical benefit to the value of R980 per month.

It is at the bottom of the industry pay scale that remuneration is most closely comparable from mine to mine. Further up the scale, differentials can appear. As employees acquire more skills and move up through the job categories towards higher basic wages, the fixed monthly payments become a smaller percentage of the remuneration package. There are also special payments for scarce skills, such as rock drill operators, that can vary from mine to mine. At the upper ends of the scale, skilled artisans can earn monthly pre-tax packages of over R30,000 before bonuses and overtime.

Employee costs comprised around 47% (2013: 51%) of total operating costs.

Benefits provided to full-time employees of Sibanye include:

  • membership of pension or provident funds;
  • housing and living out allowances;
  • access to medical care;
  • annual, sick and family responsibility leave;
  • performance bonuses and profit share schemes;
  • annual service increments;
  • life and disability cover;
  • study assistance; and
  • maternity and paternity leave.
Typical breakdown of guaranteed pay in the gold mining industry with effect from 1 July 2014 (R)
  Entry level (Category 4 employees) Rock drill operators Category 8 employees
Basic monthly wage5,7877,4249,102
Employer provident fund contribution8651,1101,361
Medical benefit982982982
Housing benefit/allowance2,0002,0002,000
Holiday leave allowance482619758
Average overtime1,4301,0562,079
Average bonus1,2122,074847
Total monthly average (underground employee)12,57815,08516,949
Annual (underground employee)*150,936182,000203,388
  1. * Applies to all gold mining operations except where agreements to the contrary have been concluded by organised labour
Low basic monthly minimum wages in non-mining industries (R)
Steel and engineering4,912
Motor3,089
Road and freight4,007
Civil engineering3,994
Chemical4,992
Construction1,516

Source: www.thisisgold.co.za


EMPLOYEE RELATIONS

The mining sector is highly unionised and Sibanye is no exception. At the end of 2014, around 86% (2013: 89%) of Sibanye’s total permanent workforce was unionised. We have three discrete bargaining units (graded in line with the Paterson job grading system), namely Category 4 to 8 employees (various unskilled and semi-skilled employees), Category 9 employees (miners and artisans) and Category 10 employees (officials).

We are guided in our practices by the Labour Relations Act. To gain organisational rights, a union must be registered with the Department of Labour (DoL), and represent at least 35% of employees within a particular bargaining unit. Organisational rights give the union:

  • access to the workplace, allowing qualifying unions to recruit members and host meetings on mine property outside of working hours;
  • access to payroll deduction facilities;
  • the opportunity to elect employee representatives for internal disciplinary processes; and
  • paid leave for representatives to allow them to carry out union-related duties.

Once a registered union reaches a representation threshold within a bargaining unit (which differs at each operation), it is recognised by Sibanye, and thus receives the right to bargain for that particular employee category and various other organisational rights.

Currently, four unions are recognised at Sibanye: the National Union of Mineworkers (NUM), Solidarity, the United Association of South Africa (UASA) and the Association of Mineworkers and Construction Union (AMCU).

There is extensive engagement between management and unions on shaft, mine and company level about many issues. We participate in centralised negotiations on wages and conditions of employment. Negotiations are led by the Chamber of Mines (representing the major gold mining employers) and recognised trade unions (representing their members).

Union representation as at 31 December 2014 (%)*
Category AMCU NUM UASA Solidarity Non-unionised
Senior officials0.418.3825.6811.4954.05
Officials5.5250.3117.4310.4816.25
Miners/artisans13.6942.7510.2615.8017.50
Category 4-8 (unskilled and semi-skilled)33.9552.420.610.0512.98
Total28.7150.603.632.5914.46
  1. * According to Sibanye payroll deduction statistics
Employee origin by South African region as at 31 December 2014 [graph]

HUMAN RIGHTS

We uphold the basic rights enshrined in the South African Constitution and ensure fair employment practices at all our operations. As a signatory to the United Nations Global Compact (UNGC), Sibanye upholds the 10 United Nations Global Compact principles in the areas of human rights, labour, the environment and anti-corruption. Sibanye joined the United Nations Global Compact in September 2013. The Group submitted its first Communication on Progress report in 2014.

Security

Sibanye aims to train all security personnel in human rights policies and procedures. A training service provider was not secured in 2014 but training of security employees has been included in the Workplace Skills Plan (WSP) for 2015. The WSP is a strategic training document, published annually, which articulates an employer’s approach to training and development needs in the workplace. It is governed by the Skills Development Act and the Labour Relations Act, compiled jointly by the employer, employee representatives and non-unionised employees. All significant investment agreements and contracts that include human rights clauses were screened in 2014.

We are particularly proud of our constructive employee engagement, and regular and ongoing communication with employees, which aims to uphold human rights and fair employment practices.

We also provide training when employees return from leave.

To this end, we abide by our Code of Ethics and values, which specify our position with regard to upholding human rights and respecting all cultures and customs. Our human capital policies also address the risks related to corruption, child labour or forced labour at any of our operations or among our suppliers, employment equity and employee relations, including discipline and recognition.

A total of 18 (2013: 21) incidents relating to corruption were reported in 2014. These incidents involved fraud with the purpose of obtaining cash and assistance of illegal miners.

A total of six (2013: 32) employees were charged – two were charged criminally and disciplined in terms of Sibanye’s Code of Ethics and four were disciplined in terms of the procedures in the Code of Ethics.