SABC on skills audit, legal & signal distribution costs & contracts: with Deputy Minister & stakeholders

Meeting report

The Committee Secretary informed the Committee that the Chairperson would be on the virtual platform shortly as he was experiencing technical problems. Ms Khubheka was asked to be Acting Chairperson. The Minister might join later but the Deputy Minister was present.

Deputy Minister’s remarks
Ms Pinky Kekana, Deputy Minister of Communications, said that this was a follow up meeting with the objective was to respond to some matters which Members had sought clarity on in the previous meeting. The Department also wished to use this opportunity to demonstrate to the Committee its commitment and detailed plan to assist SABC to move out of its current predicament.

Since the previous meeting, the Department has had engagements with SABC and Independent Communications Authority of South Africa (ICASA). She highlighted that some key issues require reform. The Department has also had an engagement with labour unions.

The Deputy Minister appealed to the Committee to help SABC bring down its operational costs on human capital and signal distribution. The SABC has done a spreadsheet on its plan to cut operational costs which would be presented to the Committee. The key challenge is TV licence fees to bring more revenue to SABC.

The Deputy Minister said that the Department is going to have a separate conversation with SABC to look at its remodelling structure going forwards.

Discussion
Ms P Van Damme (DA) was very pleased that the Department is working with SABC and the collaborative relationships that they have cultivated. Playing politics does not help anyone during these circumstances.

Ms Van Damme asked about DCDT’s progress on the amendments to the Broadcasting Act. This matter has been raised for two to three years and the Committee is yet to receive the Bill. It should not be taking so long. She requested the timeline for it completing the Bill.

Mr L Molala (ANC) commented on the collaboration between SABC, DCDT and other stakeholders as well as their interaction with Parliament. What would happen after the presentations today? He had gone over all the presentations and noted huge contradictions in those presentations. He proposed the Committee engage in a closed door meeting to scrutinise all the presentations. He was uncertain whether there is sufficient time to deal with so many stakeholders at this meeting.

Ms P Faku (ANC) agreed with Ms Van Damme and Mr Molala.

The Deputy Minister replied that the Broadcasting Amendment Bill was taken to the Cabinet Committee towards the end of September for Cabinet approval. But it was then referred back to DCDT by state law advisor for other legal scrutiny. She would not want to put a detailed timeline on it now but will report to the Committee probably at the beginning of November. She agreed and recognised the importance of the Bill to deal with the new challenges faced by SABC.

Ms N Khubheka (ANC) supported Mr Molala’s proposal. She pointed out that SABC had not presented its programmes in the last meeting, so she believed it only fair that SABC be given an opportunity to present its case before the Committee came to its own decision. She asked about the Section 189 dismissals of employees at SABC.

The Chairperson apologised to the Committee for his late arrival due to technical challenges. He had heard part of the discussion and was certain that the Deputy Minister would reply after the presentations.

Ms Faku commented that since Committee Members had received the documents only today, she suggested Members to listen to all the presentations and then reflect on the content.

South African Broadcasting Corporation (SABC)
Mr Bongumusa Makhathini, SABC Board Chairperson, said the SABC would present on the skills audit feedback, SABC legal costs, signal distribution costs and SABC’s current active contracts.

Skills audit feedback
In 2019 SABC embarked on a skills audit to determine skills levels within the corporation. SPT Consulting was contracted by SABC to conduct the skills audit. The skills audit completion, its response rate and its scope have been provided to the Committee. The competency tests were targeting three levels of employees: management, management and supervisory as well as operational staff. The outcomes and recommendations of the skills audit outcome were provided to the Committee (see document).

SABC legal costs expenditure
The SABC management team spoke to the measures put in place to manage litigation costs. The SABC is dealing with many historic cases caused by years of governance failures and litigation is by its nature expensive and time consuming. The SABC is therefore no different to other SOEs currently seeking financial and legal redress for past malfeasance and corrupt activities. Nonetheless, there is a significant decrease in legal costs and it expects further reductions in the future on account of the measures put in place to manage this cost. The management team emphasised that it is important to note that not all legal costs relate to labour matters. They assured the Committee that the measures are yielding positive results leading to reductions in legal costs.

SABC signal distribution costs
The SABC’s signal distribution costs are the second largest cost for SABC after salaries. The Digital Terrestrial Television (DTT) vs Direct-to-Home (DTH) costs were unsustainable. Its recommendations included:
• Sentech current cost must be reduced by R500m immediately
• Sentech and SABC must align with the DTT/DTH coverage for the country, based on “best technology for terrain” criteria and not a forced percentage split of DTT vs DTH
• SABC must be exempted from the unsustainable and uncompetitive DTT policy and regulations while these are being revised.

SABC contracts
The SABC currently has 212 active contracts:
• 12 contracts are denominated in either Euro, GBP or USD – R266m combined;
• The remaining 200 contracts are all denominated in ZAR;
• Total value of all ZAR denominated contracts is R1 430 789 280 (excluding TV content contracts):
• 83% of the value of these contracts is with service providers having Level 1 or 2 BBBEE status;
• 9% is with service providers with Level 3 or 4 BBBEE status;
• 87% of the contract value is with Gauteng, 6.8% North West, 3% Western Cape service providers.

Communications Workers Union (CWU)
Mr Aubrey Tshabalala, CWU General Secretary, gave the union’s view on the latest development at the SABC. He assured the Committee that CWU remains committed to engaging with stakeholders to move SABC forward. He believed that the public broadcaster, unlike other SOEs, could be an asset to the country. Mr Tshabalala said that SABC has engaged with the Communications Workers Union in bad faith.

The Communications Workers Union’s presentation covered five areas:
• Its response to matters not responded to in the previous meeting on Section 189;
• Its understanding of differences between the commercial and public mandates of SABC;
• Its understanding of relevance of Skills Audit to Section 189 Labour Relations Act process;
• Claims of sabotage about the President’s State of the Nation Address;
• Its contribution to the reskilling and upskilling of workers.

CWU noted the golden opportunity missed during COVID-19 lockdown to expand its commercial market.

Broadcasting, Electronic, Media and Allied Workers Union (BEMAWU)
Mr Hannes du Buisson, BEMAWU President, gave an overview of SABC history noting the distinction between its commercial and public broadcasting enterprises. The initial intention was that its commercial services would generate enough revenue to fund public broadcasting.

Mr Du Buisson highlighted SABC’s overspending on its public service mandate. SABC is putting out more content than what Independent Communications Authority of South Africa (ICASA) required. Hence, it wasted and lost many potential commercial revenue opportunities it could otherwise generate.

Mr du Buisson said that the Skills Audit may not have been able to capture all skillsets of SABC employees.

Mr du Buisson said that the labour litigation costs presented by SABC were inflated. Instead employees had received their dismissal notice in an unorthodox and unprecedented manner. Employees did not expect such conduct from a public broadcaster that dismisses workers out of the blue.

Mr du Buisson said that SABC has people at management level who have no people under them or reporting to them. These are redundant managers.

Mr du Buisson reaffirmed the sabotage case and requested the Committee to do an investigation.

SABC Editorial Forum briefing
Ms Busisiwe Ntuli and Ms Zolisa Sigabi, both Editorial Forum representatives, highlighted what they described as a gag order imposed on SABC employees in the execution of Section 189 of the Labour Relations Act. They spoke of a broken, depleted and demoralised newsroom. The SABC had dismissed a news anchor while she was doing a live broadcast, as part of implementing a Public Protector report on 13 irregular appointments at the SABC public broadcaster.


They stated that employees in the sector are working in danger as the SABC is not adhering to occupational health and safety protocols. Further revelations included that the skills audit was ineffective and they questioned the way the service provider is conducting the audit. Employees were forced to mark their skills down, and were instructed as to do what they could do.
The SABC fails to treat news as a key platform that should deliver to all people and in the public’s interest. News has been relegated to graveyard slots, as mandates that are insignificant. There are hardly any news slots that occupy prime time slots. The public mandate has been displaced by commercialisation. Much of the public mandate has been slashed for the sake of profit maximisation. Management argued that current affairs slots are not drawing an audience and have reduced these.

The Editorial Forum appealed for the need to guard the public mandate which SABC is deliberately eroding. SABC has many responsibilities in a developmental state to inform citizens and assist in maturing South Africa's democracy.

The Editorial Forum also reported that SABC employees are using their own resources to do investigations which is tantamount to labour abuse. Staff are often asked to take on different duties outside the scope of their job responsibilities.

Department response to SABC internal stakeholders
Ms Nomvuyiso Batyi, Acting Director General: DCDT, briefed the Committee on:
• regulatory reforms aimed at assisting the SABC
• plans to address SABC’s Sentech expenditure
• interactions with Sentech
• commercialization of the SABC
• project to assist mitigating risks
• delays in implementing DTT programme
• monitoring of R500m investment content development
• Competition Commission report and Viu deal
• monies owed by government for Covid-19 coverage
• SABC assistance from allocated R1 billion      
• breakdown of government spend on SABC platforms  
• outcomes of the meeting with the Minister in the Presidency    
• future plan to regulate OTT environment          
• Departmental understanding on relevance of skills audit on section 189 process.          

Ms Batyi remarked that it is fine for people to come to the Committee complaining about matters without coming up with a solution. Sentech has been asked to roll out the set-top boxes. There are communities in rural areas that cannot afford a set-top box or a new TV set. The DCDT team is looking at cost-effective methods which is why it is working with Sentech.

DCDT always ensures that SABC should not steer into a direction that becomes too commercialised. That is why SABC needs to provide separate financial statements for its public mandate and for the commercial part. The Director-General denied that SABC has been too commercialised and said this is a fallacy.

The Deputy Minister concluded that the retrenchments have not come to the Department’s attention yet. All these things revealed are new to her. She hoped that the SABC board will take Department into its confidence about Section 189 of the Labour Relations Act. She assured the Committee that DCDT has been engaging with SABC biweekly.

Discussion
Ms P Faku (ANC) appreciated for all the presentations. It was important for the Committee to listen to all stakeholders and their stories before it comes to its own conclusions.

Ms Faku remarked that the issues at stake had become clearer after the presentation, especially on SABC staff retrenchments. She stressed the importance of following proper procedures and exhausting all engagements before retrenchment can be considered.

On SABC’s litigation costs, she had been the first person to raise this. Although SABC appoints external people for litigation cases due to lack of capacity. She asked if those in senior positions could represent SABC in legal cases. Labour has said in its submission that SABC does have capacity and litigation costs are wasteful expenditure. She needed more information to get clarity on the matter.

Ms Faku requested a detailed report on the 11 people who were dismissed. She wanted to know the cause and she would not tolerate it if people are being dismissed unfairly.

Ms Faku urged stakeholders to allow the Sentech process to unfold. The engagement must continue and Sentech must reduce costs to help SABC.

On the intimidation allegations raised in the meeting, she believed that the Committee ought to go to SABC to perform its oversight duty. The Committee should engage with staff on the ground to get clarity since allegations continue to happen.

The laying off of staff must be done in a correct way according to Section 189 of the Labour Relations Act. She asked for a response to the allegation of "uninformed" dismissals such as the SABC TV presenter being dismissed on air. She noted that there had been a series of allegations against SABC board and senior management.

She suggested SABC utilise opportunities such as South Africa being the Chair of the African Union to expand its market to generate more revenue.

Ms P Van Damme (DA) said that the purpose of this meeting was to collect information from all stakeholders and for Members to ask questions to get more clarity on the issues pertaining to SABC. No resolutions will be taken at the meeting today.

Ms Van Damme supported utilising Sentech and she fully understood the Deputy Minister’s point of view. However, she was particularly interested in hearing that there are many ways for SABC to acquire more affordable signal distribution. She believed that it is absolutely essential to reduce operational costs at SABC and this is something that everyone should consider. She sought clarity on the legal obligation to use Sentech.

Ms Van Damme requested SABC provide the Committee with a document detailing all the expenditures so far. She stressed the importance of monitoring how its money is being spent.

Ms Van Damme said that the 0.44 percent of SABC revenue spent on litigation cases is a bit too high. She reminded SABC of the resolution from previous meetings that instructed SABC to undertake investigations into its irregular appointments. SABC needs to update the Committee of the latest information.

Ms Van Damme noted the unfunded mandates which SABC has been complaining about on a number of occasions. She wanted to know what SABC’s proposal on this was and what SABC needed the Committee to do. It does not help if SABC only complains all the time.

Ms Van Damme understood that COVID-19 has definitely wreaked havoc in the advertising space resulting in revenue loss for SABC, but she needed an update on the R1.9 billion projected loss.

Ms Van Damme commented on Section 189 and the skills audit. The SABC presentation stated very clearly that there was legal precedent in the High Court and that skills do not necessarily need to be taken into account to execute s189. Noting the animosity between labour and SABC, she pleaded that both sides work together. SABC needs to make staff cuts and that it is a fact. She urged all stakeholders to engage in good faith as so far she has not seen demonstrations of good faith from either side. The reality is that R700 million needs to be found to fill this gap. While she appreciates the unions’ inputs; Parliament’s role is oversight and it should not be used as an arbiter of staff dismissals. The sabotage matter which unions had brought to Parliament is related to specific staff issues. It is not within Parliament’s mandate to resolve the matter.

Ms Van Damme asked about the Communication Workers Union’s stance on SABC performance. She recalled that during the days of Hlaudi Motsoeneng, the union had expressed its support for him. It thus made the union somewhat complicit in the current predicament at SABC. She personally found it very difficult to support the Communication Workers Union.

Ms Van Damme addressed the Editorial Forum. She explained the Committee’s role as legislators which meant that they could not overstep its mark. She suggested SABC establish an independent internal body to handle all the staff complaints. She emphasised the importance of staff members’ mental health as a priority.

Ms Van Damme assured SABC that the Committee is dedicated to assist SABC in any way that it can including helping SABC to get another bailout.

Ms Z Majozi (IFP) said that the Committee had received the presentation documents from unions only this morning. She corrected the unions' accusation that SABC had submitted its documents later. It is a falsehood. The Committee had received the SABC presentation materials long ago. She called the late submissions unacceptable.

She remarked that the unions had all presented a different version of the story to what SABC management team had presented. Her question was whether or not SABC was fair enough in their engagements with the unions. She asked how many meetings had taken place before a decision was made.

Ms Majozi asked if the Editorial Forum is a legitimate structure or only formed by a group of employees in an informal way to raise their concerns.

Ms Majozi agreed with Ms Van Damme that Parliament cannot involve itself in a company’s day-to-day operational matter. Issues raised by union presenters - such as no soap in the building and people stuck in the lift - these are internal issues that needed to be addressed within the company.

Ms Majozi referred to the R2.7 million SABC had allegedly spent on catering and asked for clarity from both CWU and SABC. Was it money spent on a one-day catering event or events that took place over a certain time period?

Mr L Molala (ANC) highlighted Parliament’s oversight role is not to fight stakeholders but to perform its oversight role in monitoring how the money, which Parliament appropriates, has been spent. Hence, he asked SABC to provide a more detailed report on how its budget was spent.

Mr Molala requested SABC management to respond to some of the allegations raised by the unions and Editorial Forum. He noted that on more than three occasions, unions had made reference to SABC lying to Parliament. He wanted SABC to respond to that.

Mr Molala did not understand why a PR company was used in an effort to rebrand SABC as it had its own corporate unit to do that work.

Mr Molala asked SABC to explain the allegations about litigation cases. He asked what SABC is doing to address the investigations against various companies which amounted to R800 million. He requested a detailed report on those litigation cases. He asked how much funds has been recouped as a result of that litigation.

Mr Molala commented on the negligence of duty in some of the litigation cases. For instance, when an authority such as the Commission for Conciliation Mediation and Arbitration (CCMA) advised the SABC to follow correct process, this case should not have been taken to the High Court on appeal. Whoever the managers were that instigated that court case incurred unnecessary and wasteful expenditure and must be held accountable. In his view, the costs of such cases should be paid for by those managers who were personal vendettas and not by SABC.

Mr Molala asked about the value of the R266 million active contracts outside South Africa.

Mr Molala condemned the manner in which a TV presenter was dismissed on air. That was humiliating. He wanted SABC to provide an explanation for that.

Mr Molala sought clarity on Section 189 and the skills audit. He wanted SABC to explain the relevance between the skills audit and Section 189. He asked for the correct manner according to law to reduce people who are redundant in an organisation.

Mr Molala discouraged those instances where SABC responded to Parliament’s questions in the media. He stressed the importance of the organisation building a good working relationship with Parliament.

Mr T Gumbu (ANC) asked how many of its court cases SABC had won and how many it had lost. For those cases it lost, he asked if SABC wanted to appeal those cases or not.

Ms N Khubheka (ANC) said that her colleagues had raised some of the most concerning and critical issues. She asked why precisely at this point SABC felt the need to do a skills audit of its employees. She asked if it would have an impact on its turnaround strategy and if there is a correlation between the skills audit and the Section 189 retrenchment of staff.

Ms Khubheka said that the Committee was of the view that there was no sabotage. What the unions had said to Parliament was anecdotal with no substantive evidence to support what happened at time the President was due to give his speech.

On the litigation cases, Ms Khubheka requested SABC provide the Committee with a breakdown of all the active cases.

Ms Khubheka appreciated that the Department is willing to work with all stakeholders to resolve the issues at stake. The Parliament will also play a role in facilitating those debates.

Ms Khubheka noted that there was a lot of contradictions in the information the Committee received from SABC and the labour unions. For instance, the Editorial Forum stated that SABC does not have a bloated structure. If that is true, why did SABC still need to retrench. She wanted more information on SABC not achieving its full staff structure as provided for in its corporate plan.

Ms Khubheka believed that SABC cannot retrench its employees yet. She suggested SABC look into whether those people can be upskilled and trained to close the skills gaps at SABC.

The Chairperson allocated two minutes each to the Editorial Forum, CWU and BEMAWU to respond to Members’ questions.

Editorial Forum response
Ms Ntuli explained that the Forum consisted of a group of new staff members across the country in digital, news, and radio spheres. The Forum has always fought for the rule of law in SABC. The example of the dismissal of the presenter was to highlight the inhumane treatment. When the TV presenter was taken off air, programming was affected for an hour and a half. She wanted SABC management to address this matter which is independent of the Section 189 retrenchments.

Ms Ntuli said that the Editorial Forum also provides employees with counselling services. The issues the Forum raised in the presentation are pertinent to the daily operations of SABC. She remarked that SABC employees have performed very well continuing to spread government’s COVID-19 message despite the difficult circumstances. She reminded the Committee that SABC employees have suffered years of company mismanagement and political interference. She asked the Committee to intervene because the SABC newsroom needs to be protected for the democracy of the country.

BEMAWU response
Mr du Buisson responded that SABC has not been handling its employee dismissals in the correct manner. Employees are being dismissed without a proper hearing. All they got was a letter from the management informing them of their dismissal. The court has instructed SABC not to issue termination letters and orders SABC to give its employees a fair hearing before dismissal.

Mr Du Buisson agreed with Members that the safety matter unions had raised was an operational issue, but it was also something that Parliament needed to be aware of. He asked, "Are we going to wait for someone die before taking any action?" He reminded the Committee that it had once accused unions of not being vigilant enough. So he believed those safety issues are important and that Parliament needed to intervene.

Mr du Buisson apologised profusely for the late submission of the presentation document.

CWU response
Mr Tshabalala condemned Ms Van Damme’s statement and called out her lack of understanding of the trade union movement. He said that the statement was unfortunately selective. The narrative Ms Van Damme used was intended to rubbish the claims made in the presentation.

Ms Van Damme asked the Chairperson to caution Mr Tshabalala in his choice of words. She refused to be spoken to in that manner.

The Chairperson agreed and asked Mr Tshabalala to withdraw that remark.

Mr Tshabalala apologised. He pointed out that CWU on occasion had opposed Hlaudi Motsoeneng such as the dismissal of a CWU Limpopo provincial secretary. It fought that case and a commission as of 5 August 2019 exonerated the person. He agreed that CWU also supported Hlaudi Motsoeneng. The union represented the interests of workers unapologetically. It recognises what is good and bad. This is why the union is at the forefront of fighting against the corruption element in the current management at SABC. However, it recognises SABC management when it has done well.

Mr Tshabalala was opposed to taking away business from Sentech which is an SOE that is doing well. He believed it was extremely wrong to suggest SABC must seek international companies that will take jobs from South Africans. SABC has not come up with innovative ideas to increase revenue, it just want to cut costs and jobs.

Mr Tshabalala said that the unions understand Parliament’s role. He appealed to the Committee that these challenges are also contributing to the deterioration of all state owned enterprises. He objected to Ms Van Damme’s view that retrenchment is inevitable because the current number of SABC employees is below that proposed in the projected corporate plan.

Ms Faku said Ms Van Damme should know how to conduct herself in the meeting. She must behave.

SABC response
The SABC management responded that due to time constraints, the team will not be able to answer all the allegations.

It said that the allegations about SABC litigation are categorically without merit. Three judges of appeal court had referred to that litigation as frivolous litigation.

On the allegation of misleading Parliament and corruption, the SABC management team noted that the story contained in the presentation documents is a different version to what had originally been stated. These allegations are lacking substantiated evidence to support them.

The SABC management team explained its skills audit and s189 retrenchment process. This was not only view of SABC but was also endorsed in law. The Labour Relations Act makes no reference to skills audit. This view is also shared by the judiciary in the case provided to the Committee. Although the importance of a skills audit cannot be disputed for any employer, the management team confirm that the skills audit does not inform SABC’s s189 retrenchment. A skills audit process may be undertaken by an employer with no intention to retrench employees but rather to audit the organisation’s current skills pool.

The management team duly noted the complaint about the organisation hampering journalists from doing their jobs. Unfortunately the reality is that the rules are applicable to all employees, irrespective of their professions. The issue is that people wanted to appoint themselves as unofficial spokespersons for the SABC.

The SABC senior management cannot represent themselves in litigation cases and that practising attorneys should be the ones representing the SABC in court.

It was unable to quantify the amount of money recovered as a result of challenging a court verdict. However, the Committee was assured that SABC had won more cases than what it had lost. The SABC always applies its mind on whether or not to pursue an appeal. One of the major factors informing that deliberation is the cost to appeal.

On the irregular appointments at SABC, SABC management team stated that the letter which unions had referred to has no merits. The employee that had been dismissed actually has no competency as he had claimed. Hence, in terms of section 187(2), it is within the employer’s right to dismiss such an employee.

It provided more clarity on Section 189 and its engagements with the unions. The SABC understood its role and has had nine bilateral engagements with organised labour and non-unionised labour. The SABC respected and duly recognised the full consultation session requirement as provided in the Labour Relations Act. Although SABC has been showing good faith in its engagement, SABC management team said that labour unions had not been meaningfully engaging and resorted to delaying tactics. Out of the 16 engagements of which the Conciliation, Mediation and Arbitration (CCMA) had facilitated 7, the CCMA Commissioner was left puzzled and remarked there was no forward solution. On the 16 October, when the labour unions were asked to reschedule, they did not make any meaningful proposal which the management could consider.

The methodology adopted to conduct the skills audit was consistent with the best international practice, making its outcome reliable. Under the new corporate plan, a lot more new positions are created. This is still an ongoing process. Only when SABC executive team has completed its organisational restructuring can the executive make decisions on retrenchment. The SABC management team assured the Committee that those new positions created under the new corporate plan would mean promotions for many employees as current employees would be deployed to work in other positions but not retrenched. Only those employees who are in a redundant skills pool and are not being placed in a position in the proposed structure will then be subject to Section 189.

The Chairperson thanked the SABC team for its responses and assured the Committee that this meeting is ongoing. The Committee will reschedule follow up meetings to interrogate some of the key issues.

The meeting was adjourned.

Delegation list