JOHANNESBURG (miningweekly.com) – Section 52 of the Mineral and Petroleum Resources Development Act (MPRDA), which states that the holder of a mining right is required to give notice to the Mineral Resources Minister “in the prescribed manner” in terms of downscaling of operations, is a ticking time bomb.
Speaking during a plenary session on retrenchments at the twenty-ninth Labour Law Conference, in Johannesburg, Cliffe Dekker Hofmeyr director and employment law national head Aadil Patel and ENSafrica executive consultant Professor Pieter le Roux agreed that the use of Section 52 was a strategy to protect employment and promote transparency, but that it could be applied in the wrong way.
Companies need to notify the Minister when their profit-to-revenue ratio is lower than 6% over a 12-month period, or when the downscaling of operations is going to result in the dismissal, for operational reasons, of more than 10% of the workforce or more than 500 people, whichever is the lesser.
“The Minister can issue directives on how companies should run their business, which could theoretically include how companies should retrench. Companies will realise how dangerous that can be, when there is a possibility that the Minister can run your business for you and take away your mining licence,” Le Roux pointed out.
Patel added that unions and employees were becoming more “creative and innovative” in challenging the restructuring of mining operations, citing the Association of Mineworkers and Construction Union, or AMCU, as one such union that used Section 52 to add pressure on the mining company it was contesting.
“They are using it to counteract job losses in the mining sector, but what they want to do is to make licence holders more accountable. There are difficulties with its application,” he said.