Insourcing Update

Dear colleagues and students,

I wish to update you on the insourcing of staff previously contracted to the University of Cape Town.

On 1 July 2016 we will officially welcome approximately 1 000 insourced employees who will become part of the UCT community.

This follows an agreement signed with the National Education, Health and Allied Workers' Union (NEHAWU) on 28 October 2015.

The employees being insourced are contracted to UCT on a full-time basis by six companies: TurfWorks, G4S, Sibanye, Metro Cleaning Services, Supercare and C3 Food Services. Staff from C3 Food Services will be insourced when their contract ends in 2019, unless an earlier date is agreed between the parties.

Approach to insourcing

UCT's insourcing process has been guided by Section 197 of the Labour Relations Act of 1995, which deals with the transfer of employees. In essence, this means that the insourced staff will be employed by UCT on no less favourable terms and conditions of service than before.

An extended consultative approach with the unions, NEHAWU and South African Transport and Allied Workers' Union (SATAWU), addressed the principles of insourcing, which included defining jobs and job categories, employee compensation and benefits. As a result, UCT signed an agreement with the UCT NEHAWU Joint Shop Stewards Council on 3 June 2016. Consultation is still in progress with SATAWU regarding agreed principles for transferring the Sibanye staff.

Job grading and benefits

As part of the principles of insourcing, we considered the following:

• Job evaluation, job grading and pay scales for the different job categories,
• Benchmarking of jobs for pay-classes 1 to 2, and
• Optimising employment conditions in accordance with UCT conditions.

The UCT Retirement Fund is liaising with the pension and provident funds of the companies to determine the fund rules and options for staff to either withdraw their pension funds or transfer such funds to the UCT Retirement Fund.

Smooth transfer

Since October 2015 much hard work has gone into ensuring that all necessary operational processes are in place for a smooth transition for the insourced staff − and the university − when they become UCT employees.

To facilitate an insourcing project of this complexity and magnitude, we have decided to keep the current model of operation intact. Greater efficiencies will be introduced on a gradual basis after 1 July 2016.

Operationally, this will mean that the insourced staff will continue to be managed by the Properties & Services Department (P&S) and the Department of Student Affairs (DSA), along similar oversight arrangements as existed prior to 1 July 2016. Aside from P&S and the DSA, we do not anticipate that any department at UCT, whether academic or PASS, will be required to carry any additional responsibilities for the insourced staff.

There will no doubt be teething problems in the transition – details of operations we have not understood or anticipated, new responsibilities both for staff and for logistics, supply chains, procurement, and a massive increase in the load and responsibilities on the Human Resources (HR) Department, which will have knock-on effects on their normal activities. I ask you to help us identify these problems and find solutions, and to be patient if there are areas of service and management that experience temporary delays or less than optimal performance.

Information sessions

Understandably, any transition of this magnitude prompts many questions. For this reason, UCT's HR Department is running a series of information sessions for all insourced staff. These will provide detailed information on UCT's benefits and conditions of service and provide opportunities for insourced staff to ask questions. The first information session was held on Wednesday, 8 June.

Austerity and insourcing

A commonly asked question about insourcing relates to its cost to UCT and the impact on the austerity measures in progress. There is no doubt that the insourcing project has added to the university's challenge of financial sustainability. We have budgeted for a once-off capital expenditure of R40 million from our reserves and an annual recurrent operational cost of approximately R68 million.

It is worth repeating that the key driver of our current austerity measures has been the declining level of the state subsidy allocation to UCT over the past five years. In each of those years, the government subsidy fell short of our cost increase by approximately R50 million; thus cumulatively we are now approximately R250 million short annually. We partially compensated for these deficits by increasing fee income well above inflation, but we remain with an ongoing shortfall. In addition, the 0% fee increase for 2016 has created further financial challenges.

Making UCT more inclusive

The insourced employees have been an integral part of UCT's functioning for some time already, through the long-term services they have provided to UCT for the grounds and gardens, residences, transporting staff and students, and protecting the campus community, facilities and heritage. But they have not been UCT employees, and often expressed the view that they have felt excluded from the UCT family even though they feed our students, clean the intimate spaces we work and live in, protect us, advise visitors who approach them about where to go, and have always felt enormously proud to be working at UCT.

We are changing that. I ask you to join me in formally and informally welcoming the insourced staff into this enlarged and more inclusive UCT family on 1 July.

Thanks

A lot of people have been working incredibly hard under stressful conditions to get us to this point in time for the 1 July deadline. I like to recognise the work and commitment of the unions in the insourcing process and particularly the Joint Shop Stewards Council. I want to thank Professor Francis Petersen, who has overseen all the processes and represented the senior management team in all the negotiations. A huge amount of work has been done by Mrs Miriam Hoosain, ED:HR, and the HR department; by the finance department; by Mr Andre Theys, ED:P&S; and by Dr Moonira Khan, ED:DSA, and their respective teams. A high-level steering committee chaired by Emeritus Professor Cyril O'Connor has also played a critical role. The university is indebted to them all.

Sincerely

Dr Max Price
Vice-Chancellor