By Richard Poplak, Diana Neille, Sumeya Gasa and Shaun Swingler. Illustrations by Moses Mkhondo

3 The Un-Independent

When Thabo Reginald Tsolo was asked by his ABI managers to resign from his position as a driver and promised an OD contract, he waited three anxious months for the necessary documentation. He found himself adrift in the grey zone between his old life as an employee and his new life as an entrepreneur. When the contract finally did materialise, Tsolo was so broke that he was in no position to question the p’s and q’s.

“Sign, signature, sign, initial. Like that,” he said.

The contract, he soon found, was a Kafkaesque money-trap. As an independent owner-driver, he was discouraged from delivering for any company other than ABI, and he was obliged to transport ABI product on ABI’s “horses”—industry argot for trucks. According to the Truck Tractor Lease Agreement appended to the contract, “the Owner Driver shall pay to ABI in respect of the use of the Truck Tractor a monthly rental equivalent to R7967.40 plus VAT thereon.” This was another way of saying that he was now paying ABI for the use of a vehicle he was previously paid to drive. Cleaning, washing, fuel, oil, lubricants, maintenance and shortages were suddenly added to his operating tab. He could not deliver to the district of his choice, but was instead assigned the East Rand’s Bedfordview depot. This was terra incognita: Tsolo and his crew would often find themselves in Alexandra at midnight, looking for outlets in the pitch dark.

Photo A vendor looks out over an informal settlement in Westonaria, Johannesburg, one of the many small Coca-Cola distributors owner-drivers are obliged to deliver to. Photo credit: Diana Neille.

The math was gruesome. ABI’s territory encompassed the provinces of Gauteng, North West, KwaZulu-Natal and parts of the Free State, and even in the East Rand distances could be long. To make anything resembling a profit, Tsolo knew that he had to deliver at least two loads a day. Second loads, however, were a rarity, which would have been easier to swallow were Tsolo able to understand the tariff breakdown. But Annexure A was a whirlwind of contractual sophistry, as vague as it was unintelligible.

All of the risk associated with delivering Coca-Cola and its brand-mates was now dumped solely on the owner-driver, a fact that became especially clear during times of trouble. No longer an employee, Tsolo was contractually obliged to drive his way through labour disputes. In 2010, when his truck was stolen from Germiston’s Golden Walk Mall during a drivers’ strike, Tsolo found that he could not apply for damages. “When an OD works during a strike,” he explained, “it’s your own baby. The truck is not covered.”

In 2012, the national truck drivers’ strike hit, and this time Tsolo pushed back. “They had me working Saturday and Sunday in no-go areas,” he explained. “The strike was very tense, especially in East Rand. Then ABI said to all of us—we must work.” Tsolo was at the time driving a loaner because his own horse was in the shop, and he knew he’d have to pay damages should any harm come to the vehicle. He requested an acceptance of liability letter, but his managers never drafted one. Across the East Rand trucks were being burned, so Tsolo opted to stay home. “Once bitten, twice shy,” he said.

On the following Monday, his distribution manager asked him to sign a letter stating that he was in breach of contract. He refused. On Tuesday, November 9, 2012, he was called into the office by the same manager and told that his contract had been terminated, but that he would have to work until January. His termination invoked clause 20.5.2 of the contract he had signed three years earlier. Tsolo read the details with astonishment.

According to the document in his hands, ABI could fire him “for any other cause.” Which, in strictly legal terms, meant that the company reserved the right to terminate the contract if, when and how they felt like it.

The next day, Tsolo started looking for a lawyer.

***

A docket called “Thabo Tsolo and 150 others vs ABI” is now before the Gauteng High Court. No one is expecting an easy fight. The proceedings will turn on the intent of the ABI owner-driver contract—a document that skilfully limns the no-man’s-land between employee and independent contractor. Was it ABI’s purpose to tart up what was in effect an employment agreement as a business relationship? Were the contracts signed under what could legally be considered duress? And, most importantly, did the contract undermine the ODs’ constitutional rights under the cover of a bunch of BEE blackwashing?

The lead lawyer on the case, Andries Nkome, won a measure of courtroom fame when he acted as part of the defence team for 279 arrested miners following the Marikana massacre. He’s been described in the press as an “EFF attorney,” and Daily Maverick Chronicle has learned that the advocate Dali Mpofu, the party’s national chairperson, has been approached to play a role. The case has drawn significant political interest because it’s easily described in terms of an ancient South African paradigm: White Monopoly Capital vs the Black Everyman. “The rights to which our clients are entitled to were trampled on,” Nkome said over the phone. “And these are basic rights, like the right to equality, the right to justice and so on.”

Stuart Wilson, an advocate and member of the Johannesburg bar, interprets the case in less emotive but equally damning terms. “It seems to me,” said Wilson, after reviewing Tsolo’s contract in detail, “that ABI sought to outsource its distribution network without either selling it off, which would have been a ‘transfer of business’ under section 197 of the Labour Relations Act, or retrenching its drivers, which would have attracted a series of procedural and substantive obligations—for example those set out in section 189 of the Labour Relations Act.”

In other words, the contract appears to be structured to give ABI employer-like control over the drivers, without actually establishing an employment relationship. ABI would argue that the drivers were free to pursue their own haulage businesses, but in practice ODs were only allowed to serve ABI under ABI’s terms, wearing ABI uniforms, their trucks decked out in ABI livery.

How, then, was this not an employment contract?

“Well, Clause 5 of the contract, in particular, reads like a set of obligations owed by an employee to an employer,” said Wilson. “Clause 5.3 is essentially an apologia for this, and records that despite the ‘prescriptive nature’ of the ‘owner driver’s duties’, the contract ‘does not in any manner whatsoever affect the independence of the owner driver.’”

Photo Former owner-driver Elmon Zondo tries to make sense of one of the last invoices he received from ABI before his contract was terminated, stating a net income of R5000. Photo credit: Shaun Swingler.

If ABI’s OD contract devised an independence that in all things resembled servitude, what did this imply about the process at the point of signing?

Not much at all, according to ABI’s Eddie du Plessis, who explained that potential ODs were subjected to a screening process, credit checks, criminal checks, driving tests, and only then offered a contract by a team leader. “They’re walked through the contract, they either think about it or sign it, then we send it to the legal department and make it official. Phase 1 lasts one to three years, and is signed annually.”

In the first phase, drivers leased their trucks from ABI; in the second, they purchased trucks of their own. The way the scheme was originally pitched, drivers would eventually graduate to buying a fleet of trucks, and ABI would hire huge haulage businesses born in their own depots, mid-wifed by their ex-employees. But in 2009, ABI arbitrarily and fundamentally reconfigured the architecture of the programme. As a business advisor familiar with the matter told Daily Maverick Chronicle on condition of anonymity, “ABI, after encouraging people to buy second and third trucks, which people then went ahead and did, said, ‘sorry, as of this date, you will have one truck, you will be in that truck 80 percent of the time. Sell the rest of your trucks. And if you don’t like it, fine, because your contract is due for renewal and we won’t renew.’”

Asked to explain the rationale behind this decision, Du Plessis said, “We were losing millions of rands in theft because the OD’s sub-drivers were paid anything between R5000 and R7000 a month.” The exploitation was being passed down the line, and the ODs themselves were now running unregulated businesses that resembled micro-ABIs. “When you get paid so little,” said Du Plessis of the sub-drivers, “you’re going to look at other ways and means to make money. Customer service was in the low 50 percent range, today it’s at 80 percent. So we decided to go back to the original way of dealing with ODs. One driver, one truck.”

This meant that owner-drivers were less owners than they were drivers. It also meant that, in order to make anything approaching a profit, the truck had to be running 24 hours a day, six days a week, with the primary OD driving 80 percent of the time, resulting in a 19 hour day—illegal under South Africa’s haulage regulations. On account of these factors, their monthly pay averaged out to between R7,000 and R12,000, hardly more than Moses Mkhondo was earning as an employee in 2003, and about the same as those crewmen Du Plessis claimed were seeking “other ways and means to make money.”

When asked whether terms like these were negotiable, Du Plessis seemed bemused. “Negotiate? I’d say that’s a strong term. We’ve got a contract, and it’s standard. But I’ve never had an OD come to me and say, ‘I don’t understand this thing.’ The OD has the right to take it to go read it through. I can’t say that anyone would sit down with an OD and force him to sign, and resign from ABI.”

Yet that’s exactly the claim made by all 40 former and current ODs interviewed for this investigation, along with dozens more currently suing ABI in the Gauteng High Court. “If any pressure at all was brought to bear to encourage the employees to resign in order to take up these contracts,” noted Stuart Wilson, “the resignation may well be considered a dismissal and an unfair dismissal at that.”

Photo Logistics Director Eddie du Plessis has overseen ABI’s owner-driver programme since 2010, after an 18-year career at SAB in sales and operations. Photo credit: Shaun Swingler.

As far as clause 20.5.2 is concerned—the “for any other cause” clause under which Thabo Tsolo’s contract was terminated—ABI representatives played down its prevalence. “Personally I’m aware of two we’ve cancelled under that clause in the past two years,” said Du Plessis.

“The challenge we have is that termination is not an easy decision to get to,” explained Tshidi Ramogase, ABI’s corporate affairs director. “Each OD gets a letter when they get terminated, and it would be interesting if they shared those letters with you, and showed you their reasons for termination.”

Daily Maverick Chronicle has indeed examined over a dozen ABI termination letters, some of which were not printed on company letterheads and contained misspellings. And if Thabo Tsolo and Moses Mkhondo’s letters are anything to go by, the company’s rationale can seem bafflingly inchoate and admittedly incomplete. “Regarding clause 20.5, the point really is whether it is wide enough to justify termination at the will of ABI. And I think it probably is,” said Wilson. “If they decide that they want to terminate the contract because they feel like it, well, that counts as cause.”

As far as the legal experts consulted for this investigation were concerned, it all came down to a contract that was weighted significantly in ABI’s favour. “No question, the contract is morally unfair,” continued Wilson. “And while there’s no legal requirement that a contract be fair in all circumstances, there is a legal requirement that a contract be constitutional and not contrary to public policy.”

If there was any single clause of the contract that served as a farcical précis of Wilson’s assessment, it must be the one titled “Vehicle Running Expenses” on page 47. It read:

ABI shall pay the Owner Driver a tyre expenses subsidy equal to T, calculated to the following formula:

T = K x E

when K is the Standard Distance traveled during the invoice period, E is the tyre expenses subsidy rate of 0 cents.

Anything times zero equals zero. This was algebraic sleight of hand, and a fancy way of saying that ABI would pay no tyre expenses at all.