Sustainability/ Employee relations

Employee relations

AECI strives to operate in a manner that provides a safe, fair and harmonious working environment for all employees and for the Group. The Group subscribes to the principles of the International Labour Organization's ("ILO") conventions. Human Capital policies are intolerant of any form of unfair discrimination, harassment, child labour, intimidation or bullying in the workplace.

The Employee Relations function ("ER") is tasked with implementing and overseeing compliance with employment policies and practices that meet the necessary statutory and regulatory conditions across AECI's geographic footprint and are aligned with the over-arching imperative of mutual respect. ER supports a culture of fairness and transparency among all employees (irrespective of race, gender, nationality, religion and sexual orientation) while at the same time maintaining strong collective relationships and agreements with these stakeholders.

Mutual trust in relationships with employees and trade unions is the underlying principle, with its application being facilitated through various forums that bring together employees, Shop Stewards, trade union leaders and management. The aim is to inform, engage, secure and maintain employees' confidence that they will always be treated in a fair and equitable manner.

LABOUR LEGISLATION

Labour laws in South Africa continue to evolve as government seeks to balance stronger protection for employees with the need to create a business-friendly investment climate. The following amendments were signed into legislation in November 2018 and took effect on 1 January 2019:

Group policies will be amended to comply with these changes.

In July 2018, the Constitutional Court handed down a judgement to the effect that the Temporary Employment Service is the employer of the placed employee (earning below the income threshold as determined by the Minister of Labour from time to time) for the first three months of employment. Thereafter, the client becomes the sole employer. A monitoring process has been introduced to ensure that AECI's businesses are compliant with this judgement and that utilisation of Temporary Employment Service is minimised.

In September 2018 the Constitutional Court ruled that the personal use of cannabis is not a criminal offence. The ruling means that it would not be a criminal offence to use or be in possession of cannabis for personal consumption in a private space. Measures are being put in place to ensure that the Group's Alcohol and Drug Abuse Policy is aligned with this.

OPERATIONAL REQUIREMENTS DISMISSALS

Dismissals on the basis of operational requirements are regarded as "no fault" dismissals. Thus, the Labour Relations Act, No. 66 of 1995, places particular obligations on an employer. Most these obligations are directed towards ensuring that all possible alternatives to dismissals are explored and that the employees to be dismissed are treated fairly.

The employer's obligations are both procedural and substantive. This Act also requires that the employer engage through consultations with affected employees and their representative trade union(s) to minimise the negative impact of potential dismissals.

In 2018, the Group was faced with a need for changes in organisational structures and business models owing to the necessity to reduce costs, cease potentially unsafe work and adjust to the effects of closures at customers' businesses.

These changes resulted in six section 189(3) consultations, affecting 22 positions. As a result of consistent, clear communication and commitment during these processes, only five employees were ultimately retrenched.

Similar processes were initiated at ImproChem and parts of AEL in January 2019. Finalisation is anticipated by mid-year.

RECOGNITION AGREEMENTS

The purpose of these is to determine recognition of unions in a company and to establish a framework for consultation and participation in decision-making in matters that affect employees, policies and practices since employee representatives play an important role in the development and implementation of policies and procedures.

2018 brought finalisation and conclusion of Recognition Agreements discussions with all representative trade unions in the Group's South African operations, with the last union signing the agreement in July 2018.

TRADE UNION REPRESENTATION

In terms of section 23 of South Africa's Constitution, every worker has the right to join a trade union of his/her choice. Trade unions are an important force in South Africa, with 3,1 million members representing 25% of the formal work force.

The AECI Group recognises employees' right to freedom of association and to bargain collectively. Representative trade unions are acknowledged as one of the Group's key stakeholders.

In South Africa, 46% of Group employees are unionised as are 59% of employees in all other countries of operation.