Swarm of court cases rains down on freight and logistics bargaining council

Written by Ciaran Ryan. Posted in Journalism

Outsourcing group Innovative Solutions Group says it has been defamed and wants R6.5m from the council. From Moneyweb.

Image: Shutterstock
Image: Shutterstock

Innovative Solutions Group (ISG) and its various subsidiaries say they have put up with three years’ worth of insults and falsehoods from the National Bargaining Council for Road and Freight Logistics Industries (NBCRFLI) and have now had enough.

Last week it sued the bargaining council for defamation and R6.5 million in damages over claims by the council that it was operating a temporary employment service (TES) as a way of side-stepping the Labour Relations Act.

The bargaining council has not yet opposed the R6.5 million claim, but this week requested more time to oppose the matter – which ISG’s attorneys have refused. The council says it has instructed its lawyers to oppose the matter.

Meanwhile, ISG and its subsidiaries have applied to the court for default judgments.

ISG also cited the Council’s general secretary, Musa Ndlovu, in its defamation case. This follows a circular issued by the council in July claiming that ISG was operating a TES and therefore falls under the council’s collective bargaining agreement.

ISG says this statement is defamatory and conveys the impression that the company was not law-abiding and was involved in illegal strategies intended to circumvent the law.

“The statements were made with the intention to defame (ISG) and to injure its reputation as a trading entity,” says the summons issued by ISG against the council and its secretary general.

Temporary employment services, also known as labour broking services, are strictly curtailed under the Labour Relations Act because of past abuses whereby workers were denied benefits extended to permanent employees.

The circular issued by the bargaining council informs readers of an ISG subsidiaries called Innovative Staffing Solutions (ISS) and Innovative Staff Holdings (ISH) which purports to take over all clients’ staffing requirements. In terms of Section 197 of the Labour Relations Act (LRA), this means the staffing services provider also assumes “all employment responsibilities and liabilities pertaining to the staff of those clients,” says the council’s circular. It adds that most of the clients taken on by ISS and ISH are transport companies operating within the jurisdiction of the road freight and logistics industry – which places them squarely within the purview of the council. Sector-specific collective bargaining agreements agreed between labour and business have attracted fierce criticism from smaller companies who are not consulted on the terms, but are required to comply nonetheless. The agreements are seen as raising the costs of doing business for smaller companies.

ISG CEO Arnoux Mare says the Council continues to deliberately confuse ISS with ISH, which was liquidated last year. “While a warrant was issued in relation to ISH, there is currently an application pending in the Labour Court for the suspension of the court order which gave occasion to this warrant.

“Innovative Staffing Solutions is a human capital and facilities management subcontractor that permanently employs over 36 000 employees across a variety of sectors such as mining, engineering, construction, retail, agriculture, and transportation and logistics. It does not operate temporary employment services, nor does it break the law. Employees receive a variety of benefits including comprehensive medical benefits, a staff wellness scheme, and provident fund contributions. These benefits far exceed those prescribed by the council, and in addition to a reduction in staff salaries, these benefits would also be suspended to adhere with the council’s prescripts should ISS be compelled to comply with the council’s Collective Agreement.”

In a written response to Moneyweb, NBCRFLI spokesperson Fikile Mchunu said the council had resolved to defend the matter in court and had instructed its attorneys to do so.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.