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Department of Employment and Labour takes tough stance against Spar franchisee

Media Release: Department of Employment and Labour: 18 October 2019

 

The Department of Employment and Labour has welcomed action taken by the Spar Guild Southern Africa Limited to terminate the membership of the stores that fall within the Giannacopoulos Group for non-compliance to labour laws and the National Minimum Wage (NMW) following the Department’s approach of the latter.

 

The Department of Employment and Labour after raising its concerns with the Spar Guild Southern Africa about the conduct of the Giannacopoulos Group it has since referred its owner Mr Christos Giannacoupolous to the Commission for Conciliation Mediation and Arbitration (CCMA) for violating the country’s labour laws and non-compliance to the NMW.

 

In May 2019 the Department’s Inspection and Enforcement Services (IES) received a series of complaints of alleged gross violations of labour laws which were happening at Spar stores across the country. On investigation all the stores which happened to be violating the labour laws happened to be franchisees owned by Mr Giannacoupolous. The Department conducted a joint inspection on 30 May 2019.  

 

Ten stores were affected with nine based in Gauteng and one in the North West. Issues raised in terms of labour laws violation included amongst others:

  • Failure by the employer to issue employees with contracts;

  • Long working hours without overtime compensation;

  • Sunday pay, public holidays and leave not granted according to the law

  • The complaint also related to the hiring of illegal foreign nationals; and

  • Illegal deductions, lack of contracts, long working hours,

 

Further allegations levelled against Mr Giannacoupolous was that the employer kept two sets of records/documentation which will be prepared for inspections; and failed to register employees and submit Unemployment Insurance Fund declarations on monthly basis as required by law.

 

The inspections were conducted at Spar Orchards, Dely Road, Doornport Spar, Montana Spar, Wierda Spar, Silverton Spar, Zambezi Super Spar, Rietfontein Spar, Silverplace Spar and Safari Spar in Rustenburg. These outlets employ 565 workers. 

 

In a letter dated 17 October 2019 the Spar Guild of Southern Africa has disclosed that it has taken a decision to terminate the membership of the stores which fall within the Giannacopoulos Group. The company said it has given the Giannacopoulos Group 30 days’ notice as is a requirement in terms of the Memorandum of Incorporation.

 

The Group has announced it has taken possession of the stores and will continue to run them.

 

Department of Employment and Labour Provincial Chief Inspector for Gauteng Province, Advocate Michael Msiza said the complaints and violations against the Giannacopoulos Group have also been laid with institutions such as the SA Human Rights Commission. Msiza has confirmed that the Department has from the first inspection bent over backward to try and accommodate the Giannacopoulos Group to no avail.

 

Msiza said the franchisee was issued with an enforcement notice and given 14 days to rectify the situation. He (Giannacoupolous) has instead failed to rectify the situation and asked for extensions. He even asked for a meeting with the Department and these have not yielded any results. Msiza said in addition to being taken to the CCMA on July 31 the Giannacopoulos Group has a debt obligation of R13-million that should be paid to employees for unlawful deductions, non-compliance with NMW, overtime among others.

 

According to Msiza the latest action by the Department was in fulfilment of a promise made to Nedlac of a new strategy to enforce labour laws and the implementation of the NMW.

 

“We are now putting our strategy to test. Our strategy to enforce labour laws and National Minimum Wage Act compliance is beginning to work wonders. In terms of enforcing strategy, we are not only directing our efforts to the person not complying, but also targeting the value chain,” he said.

 

“We would like to thank the Spar Group for showing ethical behaviour and becoming a law abiding corporate citizen. We will leave no stone unturned to ensure compliance with the laws of the country,” Msiza said.

 

He warned that the launch of the Mpimpa hotline will escalate inspections and enforcements.

 

 

 

 

 

 

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