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Lonmin denies taking back bonuses

Dec 19 2012 08:50 Sapa

(Felix Dlangamandla, Beeld)

Company Data

Lonmin plc [JSE:LON]

Last traded 0
Change 1,3
% Change 0
Cumulative volume 739311
Market cap 18.14bn

Last Updated: 19-12-2014 at 04:40. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Mining company Lonmin [JSE:LON] on Tuesday denied it had deducted a R2 000 bonus from its workers' payslips.

"In recent weeks it has emerged that some Lonmin employees were under the mistaken impression that their once-off bonus payments had been reversed, based on the data on their payslips," company spokesperson Sue Vey said.

Lonmin's existing two-year wage agreement was amended on September 18 and included a R2 000 signing bonus.

Most employees received their R2 000 bonus on September 27, and had access to their money within 24 hours. This was in line with a promise that bonuses would be paid on or before October 1.

Less than 0.5% of employees were paid later, either because they did not clock in correctly, or because it could not be verified at the time that they were back at work. These anomalies had been addressed, Vey said.

Lonmin had four different pay periods, for salaries to be paid at various times during the month.

Information on employee salaries had to be received up to 11 days before the end of the payroll period, in order for salaries to be paid on time.

Any payment made after the relevant pay run closed, and which was not part of monthly pay, was reflected on payslips as an advance payment or middle-of-the-month payment in advance, said Vey.

The R2 000 bonus fell into this category for some Lonmin workers.

The payment would have been reflected on October payslips, described as an early return or "Checha Buya" bonus of R2 000, on the earnings side.

Because the money had already been received into the employee's bank account, the payslip would also record a deduction of R2 000.

"The two entries balance each other so that the effect at month end is zero."

Without this balance, a double payment would result.

The tax payable on the R2 000 bonus was deducted from October earnings and reflected on the month-end payslip.

"While the information on our payslips is in line with standard payroll practice, we acknowledge that it may be confusing for some of our employees, and we are already working on a simplified version," she said.

Lonmin was also working on an internal education campaign to help employees better understand their payslips. In addition, Lonmin's amended wage agreement provided for an average rise in the overall package of between 11 and 22% for employees in certain bargaining units.

The new agreement included the previously agreed to increase of nine to 10%.

"Subsequent reporting of the wage agreement has mostly highlighted a 22% increase. In the absence of any context, this figure is misleading and has contributed to widespread confusion."

The Bench Marks Foundation had asked Lonmin to clarify the issue.

"The Bench Marks Foundation is concerned at recent reports from workers and community members in Marikana alleging that the agreed pay rise of 22% was only paid for the first month after the strike, and was then discontinued," it said in a statement.

Failure to honour the agreement would expose the company to the risk of new strikes, it said.

Lonmin should also pay compensation to the families of deceased and wounded workers equal to their loss of income for the next 20 years.

It should contribute to a fund to help pay for a trauma and counselling centre, and contribute 10% of profits towards community development.

"We ask what plans the company has to do this," the foundation said.

Workers and local communities were not seeing the benefits of platinum mining manifested in improvements to their lives. Unless this situation was turned around, conflicts over wages and lack of local development would continue to erupt, it said.

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