MEDUPI AND KUSILE HUMAN RESOURCES AND INDUSTRIAL RELATIONS POLICY DIRECTIVE

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1 1 PREAMBLE 1.1 The parties recognize that the transformation of employee relations in line with business strategies within the projects is both necessary and desirable in order to build trust and confidence between the parties. The success of the projects depends on the efforts and commitment of all employees and the support of their representative trade unions. 1.2 All Parties shall ensure peace and stability on the Build Sites through disciplined implementation of this policy, the Partnership Agreement and applicable collective agreements. 1.3 It is the primary duty of the Contractors to apply and adhere to fair, equitable and just labour practices. 2 PRINCIPLES AND OBJECTIVES 2.1 This policy is premised on each party deriving value from the Project and recognises the following Eskom s right to have the Project delivered on time, within budget, safely and in line with its transformation objectives; Employees right to decent employment and guaranteed employee rights ; Contractors right to profitability 2.2 This policy further aims to ensure Fair and equitable labour practices between Contractors, employees and Eskom; The protection of the most vulnerable employees on the Site; The eradication of racist and unfair labour practices; Standardised Human Resources ("HR") pay bureau with standardized pay administration process per Site; The implementation of skills development and skills transfer on the Site; Fair and equitable remuneration/compensation practices including decent minimum wage and standardisation of rates across the Site; Effective communication and engagement of all stakeholders, including employees; Effective, efficient an expedited dispute resolution HR and IR Policy Directive (Approved by LPF ) Page 1 of 10

2 2.3 All forms of remuneration, compensation and incentives should be driven by the need to achieve the required productivity in order to meet the project goals. 2.4 Contractor executives must take full accountability for employee engagement, in normal and abnormal situations, on the Site. 3 APPLICATION OF THE POLICY 3.1 This policy applies to all Contractors, Subcontractors and employees employed at the Build Sites. 3.2 For the avoidance of doubt, Contractors and Subcontractors means entities of the civil engineering, building, engineering, structural, mechanical, electrical instrumentation and piping (SMEIP) contractors, joint ventures and contractors who procures employees conducting construction work and related activities on the relevant Sites for such contractor, joint venture or sub-contractor to work on the relevant Site. Principal Contractor shall ensure compliance with this policy by all Contractors. 3.3 This policy also applies to Support Service Contractors as defined in the Partnership Agreement. 4 ESKOM'S POLICIES 4.1 In the event that there is a need Eskom shall develop and issue policies directives in order to address the need. 4.2 These policies may be amended as and when required. 5 COLLECTIVE AGREEMENT 5.1 Issues which are not governed by Industry Agreements and if so directed by the Leadership Partnership Forum may be negotiated in a Collective Bargaining Sub-committee of the Site Partnership Forums. Such agreement shall then form part of the Site Specific Agreement. 5.2 No Contractor shall be entitled to conclude an agreement with a trade union regulating the activities at the Site unless all trade unions and Contractors are parties to the agreements. 5.3 Any discussions between the Parties must be undertaken within the agreed Partnership Forums as provided for in the Partnership Agreement HR and IR Policy Directive (Approved by LPF ) Page 2 of 10

3 6 INDUCTION 6.1 The Contractor will set aside reasonable time to ensure that employees are fully inducted on the Site to promote understanding and acceptance of rights and responsibilities as articulated in the Partnership Agreement. 6.2 When employees are fully inducted and trained they will be provided with all tools and resources to enable them to carry out their duties in relation to their outputs. 7 ACCOMMODATION 7.1 This is specified in the provisions of the Contractors Main contract and the Accommodation Policy. 7.2 In the event that Eskom is unable to provide accommodation, Eskom will instruct the Contractor to provide accommodation in line with the Eskom standards (minimum specification standards / requirements). 8 PROVISION OF MEALS 8.1 Eskom will provide a Project Site canteen; 8.2 All meals provided for on the site as well as the Eskom will be in accordance with standards set by the Department of Health and other relevant legislative and regulatory requirements. 9 TRANSPORTATION 9.1 The Contractor is required to provide adequate and standard transportation facilities / practices; 9.2 In the event that a travel allowance is paid all Contractors will pay such allowance at a standard rate across site; 9.3 In the event that the Contractors provide bus services, the Contractor shall ensure that: employees are only transported in licenced and roadworthy vehicles; all drivers have the required valid licences and permits; all vehicles are fit for purpose; as a minimum standard all vehicles are properly maintained and comply with applicable Statutes and associated regulations HR and IR Policy Directive (Approved by LPF ) Page 3 of 10

4 Transport of Contractor s personnel in the back of trucks, tractors or light delivery vehicles is strictly prohibited. 9.4 The minimum standards and vehicle specifications as prescribed for by Eskom will apply. 10 MOBILISATION AND DEMOBILISATION 10.1 The Contractor shall develop mobilisation and demobilisation plans and a procedure that is fair and just and which shall be agreed upon with Eskom Such plans will be discussed at the Site Partnership Forum. It will form part of the Site Specific Agreement. 11 DISPUTE RESOLUTION 11.1 The Contractors and trade unions shall adhere to the Dispute Resolution Policy, which is an annexure to the Partnership Agreement TRAINING AND DEVELOPMENT 12.1 The Contractors must comply with all relevant and applicable legislative requirements in relations to Skills Development The Contractor must develop a skills development and training plan that is specific and addresses the needs of the Project Skills Development as reflected in these plans should enable skills and career progression whilst employees are employed on the Project The Skills Development Plan and career progression as set out in the plan should ultimately aim to reduce the dependency on foreign nationals The Contractor must provide the employee with a skills log that includes a certificate of service which records the employee s job category, the nature of work performed, skills training and skills acquired during the duration of the service with the Contractor on the project 13 RECRUITMENT 13.1 The Contractor s recruitment policies and procedures shall HR and IR Policy Directive (Approved by LPF ) Page 4 of 10

5 be fair and shall not unfairly discriminate against any person or group of persons; comply with Eskom's skills development and localization requirements; comply with Eskom's employment equity requirements; all the contractors should consult with organized labour on a plan for the employment of employees from previously disadvantaged background, and the Contractor should comply with such a plan; and comply with all relevant laws and Eskom's policies and procedures regulating the employment of foreign nationals In the event that a Contractor intends to utilise expatriate employees from outside the borders of South Africa: the Contractor must inform Eskom of its intentions and reasons to do so, prior to the recruitment of such workers the Contractors must only utilise expatriate labour from other countries for the purposes of providing core skills to the project in circumstances where: the required skills are not available in the local, provincial or national regions the required skills are available but not in sufficient number; the required skills are available but are otherwise occupied (i.e. not readily available) The respective Contractor will ensure mechanisms are in place to manage associated risks with the employment of expatriate employees. 14 REMUNERATION, COMPENSATION AND INCENTIVES 14.1 The payment of remuneration, compensation and incentives shall be driven by the need to achieve the required productivity in order to meet the project goals HR and IR Policy Directive (Approved by LPF ) Page 5 of 10

6 14.2 A minimum entry wage shall be paid to the most vulnerable worker across the sites as per the Partnership Agreement 14.3 Implement the wage standardisation on the rate of pay for employees as agreed. 15 PAY ADMINISTRATION 15.1 The Contractors shall utilise the payroll bureau established by Eskom for all issues relating to employees remuneration, compensation and incentives and on such terms and conditions as prescribed by Eskom The payroll bureaus shall provide employees with standard processes in relation to time and attendance payslips; tax directives; and any other related documents or process as prescribed by the payroll bureau The Contractors shall utilise the payroll bureau for all issues relating to employees remuneration, compensation and incentives. 16 ORGANISATIONAL RIGHTS 16.1 All parties shall adhere to the organisational rights policy issued by the Leadership Partnership Forum and the Site Specific Agreements. 17 INDUSTRIAL ACTION MANAGEMENT The Contractor shall effectively deal with all industrial action/work stoppages on the Site. To this end, the Contractor shall: Put in place an industrial action management procedure to deal with all forms of industrial action at the Site which shall include a comprehensive strike management plan, included in this regard, provision for a strike management committee, a communications plan and a picketing rules plan. No picketing shall be permitted at the Site; 17.2 Ensure that all its managers and supervisors are conversant with the provisions of and are properly trained on the industrial action management procedure and applicable policies and procedures HR and IR Policy Directive (Approved by LPF ) Page 6 of 10

7 17.3 Immediately inform Eskom of any actual or potential Industrial Action and/or demand (whether verbal or in writing) by its employees and/or any trade union acting on their behalf; and 17.4 Keep Eskom fully informed of all developments during any Industrial Action or anticipated or potential Industrial Action The Contractor must produce a detailed strike dairy. Such diary should provide detail of the events on the day. The PERM of the Site will provide a prescribed format for the strike diary. The Contractor should provide strike diaries to the PERM as per the instructions of the PERM The Contractor shall furthermore submit a comprehensive industrial action report to Eskom as soon as possible, by no later than 7 days after any industrial action started. In the event that a strike continues for longer than 7 days, the Contractor will submit such report to Eskom every 7 days, until the strike has been resolved. The industrial action report shall include the following details: the reason/s for the Industrial Action; the Employees demands prior to and during the Industrial Action and management s response; A complete strike diary detailing the actions, meetings and decisions of the Contractor; the man-hours lost (if any) per category, including supervision and management; and the resolution or settlement reached The final settlement with workers and/or Trade Unions The total anticipated cost of the strike action to the Contractor The Contractor shall ensure that it has adequate human resources personnel who are properly qualified and authorised to manage and resolve any industrial action or potential industrial action. These personnel shall be available at the Site whenever required except in the event of an evacuation of the Site. Their primary task will be to report employee movement on and off site during the strike period HR and IR Policy Directive (Approved by LPF ) Page 7 of 10

8 17.8 The Contractor will be responsible for resolving industrial action at the level of the Contractor in accordance with the procedures set out in the Site Specific Agreement The Contractor will consult with Eskom prior to, during and after any potential or actual industrial action; The Contractor will ensure that its supervision/ foremen are familiar remain on site during industrial action except where the site has been evacuated The Contractor will consult with Eskom on any communications intended for its employees before communicating the same to them; and Where industrial action impacts or may have an impact on the project works and involves one or more Contractors, such Contractor(s) shall, as directed and facilitated by Eskom from an industrial action management forum to assist in the management of the industrial action. 18 HEALTH AND SAFETY 18.1 All parties involved in the Project have a responsibility to ensure the implementation and maintenance of a high standard of occupational hygiene, occupational health, safety and environmental standards; 18.2 All occupational health, safety and environment matters will be in strict adherence to the Occupational Health, Safety and Environmental Act 130 of 1993, the Mine health and Safety Act, the Construction regulations and to specific requirements of Eskom Contractors and its employees must comply with the Substance Abuse Procedure. 19 COMMUNICATION AND INFORMATION SHARING 19.1 All parties shall ensure that they communicate effectively, timely, accurately and responsibly so as to ensure that there is stability at the Site. Every Contractor on the Site has a positive duty to communicate directly with their employees HR and IR Policy Directive (Approved by LPF ) Page 8 of 10

9 19.2 The Contractors must communicate with their employees on all issues that affect them and/or that may affect them All parties must comply with the communication policy 20 INDUSTRIAL RELATIONS FORUM 20.1 The existing Industrial Relations Forum will be chaired by Eskom and will execute the scope as established All Contractors and sub-contractors are obliged to attend and participate in the Forum on the dates and times set by Eskom All Contractors shall provide such information and or statistical data that Eskom may require to further the scope of the Industrial Relations Forum, and or to create stability at the Site 21 SITE PARTNERSHIP FORUMS 21.1 Eskom, Contractors and Trade Unions shall comply with the provisions and operating guidelines of the Site Partnership Forum, Principal Contractors Partnership Forum and the Contractors Partnership Forums as agreed to and approved at the Leadership Partnership Forum. 22 SITE ACCESS AND WITHDRAWAL OF ACCESS 22.1 Access to the Sites will only be granted by Eskom once the Contractors have complied with Eskom's requirements as established per Site Withdrawal of access to the Sites shall be at Eskom's sole discretion. 23 MONITORING AND AUDITING 23.1 Eskom shall be entitled to monitor the Contractors' compliance with Eskom's Human Resources policies and procedures and the associated Contractors' practices Eskom may at any stage conduct a compliance audit and request the production: of the Contractor s and/or any Subcontractor s industrial relations policies and procedures; HR and IR Policy Directive (Approved by LPF ) Page 9 of 10

10 the Contractor s or Subcontractor s wage records; of any documents, data and statistics required to determine whether the Contractor has complied with: Applicable statutory requirements; an Eskom policies directives, A Leadership Partnership policies; Applicable collective agreements; Instructions issued by Eskom; Previous audit findings by Eskom and associated remedial action The purpose of such audits will further be to identify areas or incidents of none compliance and the recommendation of remedial action in order to ensure that. Eskom's standards are complied with The Contractor shall co-operate with and assist Eskom in performing such audits. They shall further l ensure that its Subcontractors co-operate with and assist Eskom in performing such audits. 24 IMPLEMENTATION DATE The date of implementation of this policy will be 01 May oo0oo HR and IR Policy Directive (Approved by LPF ) Page 10 of 10

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