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Phumelela Rationalise

Vodacom Durban July threat

Phumelela executives met with officials of the Academic and Professional Staff Association (APSA) on Tuesday afternoon following media reports that the trade union was planning to disrupt this Saturday’s Vodacom Durban July at Greyville.

The Durban July is Africa’s most famous horserace and is staged by Gold Circle, the horseracing and tote betting company in KwaZulu-Natal.

After Tuesday’s meeting Phumelela decided to amend its offer to Betting Division staff.

This revised offer has been submitted to APSA officials and Phumelela is now awaiting a response.

Phumelela is optimistic that an amicable solution will be reached with the trade union.

The company recently undertook a Section 189 A retrenchment process, facilitated by the CCMA, because it has no option but to close a number of stores that are not operating profitably.

Simultaneously, several duplicated roles have been rationalised.

Phumelela regrets the loss of jobs, but as is the case with numerous other companies, the current state of the South African economy leaves the company with absolutely no choice but to rationalise its operations.

  • Press release published by Phumelela Gaming & Leisure on Wednesday 3 July 2019

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6 comments on “Phumelela Rationalise

  1. beatle says:

    Sad state of affairs – the slow decline of horseracing which I feel is due to bad management and past powers mainly one person in particular – hopefully one day he gets his day of justice

  2. Vinsesh says:

    Agreed

  3. Brendon says:

    “a leopard never changes its spots” The Unions are well aware of the beast that it’s dealing with!

    I have in my possession a copy of one of the Section 189A (of the Labour Relations Act, to effect retrenchments for operational requirements) letters issued by Phumelela to “Affected Parties” and “Labour Representatives” dated 25 June 2019, signed by CEO: Betting and Media – Phumelela Gaming and Leisure Limited. If you read this letter, you get a distinct feeling that one party is steamrolling the other because they feel they are well within their rights to do so. I received this letter from the Secretary of on of the trade unions who reached out in disbelief that Phumelela issued these letters before the agreed “consultation process” was completed. The parties agreed that such a process would run until 30 June 2019 and as such this letter was issued in bad faith and contrary to the agreed process by the parties.

    If the executives of Phumelela were in touch with reality and more importantly with their most vulnerable employees, I am strongly of the view that there was and is no need to retrench employees. If Labour Representatives accept this round of retrenchments, then they must brace themselves for further rounds of retrenchments in the coming months.

    When a company is faced with economic hardship, as is claimed by Phumelela, then one has to ask whether this is material? and if so, does it threaten the sustainability of the company? In light of the fact that the same executives and the board of directors of Phumelela passed a resolution to pay a dividend to its shareholders of R113,7 million to its shareholders (source: Phumelela 2018 Integrated Report), is indicative that their outlook of the business was so positive and their solvency and liquidity was so strong that they didn’t need the R113,7m. This was their view less than 12 months ago!

    So, less that 6-9 months later, the same executives doing a 180˚ turn and initiate a section 189 process to advise their employees that they need to retrench them to save a few million rand, which will be a tiny fraction of the R113,7m that was returned to shareholders as a dividend, to enjoy a windfall return.

    If the board of directors and the executives of Phumelela stand by their view that employees need to be retrenched for Phumelela to sustain itself, then they need to take a long and hard look at themselves and ask the following question:

    1) Why are none of us going to lose our jobs?
    2) Why are we continuing to conduct ourselves as if there are no cost pressures on the company?
    3) What austerity measures have we implemented to contain costs?
    4) Can the company survive if no retrenchments are effected for the next 12 months?

    If the leadership of Phumelela possessed the requisite levels of compassion and humility for their people, this mess would have been avoided. To me, it seems inevitable that there will be some level of disruption leading up the July. Phumelela has to take full responsibility and deal with the problem that lurks in the Eiffel Tower and address same.

  4. Art says:

    Phumelela is retrenching in tough economic times.Trade unions and management alike are aware of procedural and substantive defects.The labour court has exclusive jurisdiction over those disputes .If they the trade unions feel so hard done by they should declare the dispute.Im sure Phumelela are well aware of their actions..What I can say as a punter is that phumelela’s current betting model insofar as the long suffering punter is concerned needs to be addressed to attract more punters which will in turn push up turnover and increase sales
    .

  5. Ian Jayes says:

    Phumelela made massive retrenchments when it took over the clubs and horseracing. It closed down most of the racecourses which were all high-asset viable businesses. Now it needs to close down more of its operations. Ayn Rand was spot on when she said people tend to bring things down to their size.

  6. Butch says:

    What cost did Phumelela incur to take it’s management and “employees” to the Sun Met for almost a week out the office? Can the costs incurred be justified in light of retrenchment? How do these costs compare to previous years?

    How much is Phumelela spending to fly and host their management, director’s, employees, affiliates, consultants and a few clients to the VDJ? What proportion of these costs relate directly to their clients? If it’s less than 75% then Phumelela should question why are they taking such a big entourage if retrenchment are necessary for the survival of their business?

    Surely, in this difficult period, these costs should be “frozen”.

    Gold Circle and Phumelela have chosen to distance themselves from each other over the last few days in relation to potential strike action and the VDJ. Claiming that they are independent of each other.

    Ed, can Gold Circle and Phumelela confirm how separate and independent they are from each other? Is that R15 million targeted pick 6 pool for the VDJ an initiative of Gold Circle or Phumelela? Or both entities acting as one?

    When it’s convenient, they are one and during the threatened strike action, they are not!

    Would Gold Circle, acting as an independent and separate business, disallow Phumelela from attending and hosting clients at the VDJ to avert the threatened strike action( and to show their independence, protect and promote their flagship event)?

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