South African company Amalgamated Beverage Industries (ABI) is facing a lawsuit from former employees who say that the company, which is owned by SABMiller, the world’s largest brewing company, manipulated the country race-based employment policy, called “black economic empowerment,” in order to cut costs, resulting in the staff losing their jobs.
The employees, most of whom are drivers who worked for the company for years, claim that the firm made them into “owner-drivers” in order to gain points in the government’s scoring system for companies that support Black empowerment.
However, the drivers say that they were pressured into resigning as employees and signing new contracts that recognized them as independent small business owners, which meant that the company would not be liable for many of their expenses under South Africa's labor laws. The contacts were eventually terminated when the drivers could not make their payments for stock and vehicles.
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“The story is simple: owner-drivers like Moses Mkhondo and Thabo Tsolo were asked to resign from their jobs, promised a bump in pay, cajoled into signing absurdly unfair contracts, exploited to the bottom of their bank loans, and then allegedly terminated without cause,” wrote journalist Richard Poplak in an investigation into the case for the Daily Maverick Chronicle.
The drivers are now seeking 6.3 billion rand (US$400 million) in compensation from ABI. One driver interviewed by Poplak said that the drivers were summoned for a meeting by the management, who then demanded they resign immediately and sign new contracts as owner-drivers.
“We were not given enough time to take the contract home, or to get lawyers,” Moses Mkhondo, a former owner-driver, told the Daily Maverick Chronicle. “The managers were rude to us. They insisted we must sign right away. When they talked to us, they didn’t beg. They told us ‘sign, or else you lose your contract’.”
The original incentive was that the drivers would be making more money under the new contracts. However, in 2004 when SABMiller increased its shares from 9 percent to 100 percent, the new stockholder decided to cut spending by altering contracts and reducing the drivers’ pay.
By October 2013, Mkhondo says he owed ABI US$22,000—despite beating all of his performance targets, and winning a trip to Brazil for doing so. By November, this figure had ballooned to US$48,000, and in January Mkhondo’s contract was terminated.
SABMiller and ABI deny that they have treated owner-drivers unfairly. “For the last two years we’ve been engaging with the ex-owner drivers who were not happy with being terminated,” said Tshidi Ramogase, ABI’s corporate director.
The Black Economic Empowerment policy, South Africa’s version of affirmative action in the United States, was introduced in 2003 to address the inequalities of apartheid by encouraging companies to give previously disadvantaged people more privileges in return for “empowerment” credentials, which is an important element for doing business in South Africa.
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