Thousands of security companies, including some contracted to the government, are under fire for failing to provide their workers with medical benefits despite deducting millions from their salaries as part of a bargaining council agreement.

The matter is being probed by the Council for Medical Schemes and the Financial Sector Conduct Authority.

Unions say that the probe affects more than 30,000 security guards and about R50-million in deductions so far, 

In March 2021, the National Bargaining Council for the Private Security Sector (NBCPSS) approved a health insurance benefits scheme for the sector following the signing of a collective bargaining agreement with employers and unions.

The NBCPSS is registered in terms of the Labour Relations Act and cites its primary aim and purpose as “to regulate, maintain and enforce the terms and conditions as set out in the Main Collective Agreement. According to the Main Collective Agreement, registered trade unions and employer organisations represent employees falling within the scope of the security sector.”

According to the agreement, the scheme was to be administered by Affinity Health and workers were to pay a compulsory R250 monthly insurance, half of which was deducted from salaries.

The benefits include chronic disease management and medication, doctor consultations, hospital and casualty benefits, including an HIV and TB management programme.

Unions sound alarm,  plan mass action

However, according to unions in the sector and security guards who spoke on condition of anonymity, scores of companies that are part of the agreement have not fulfilled their part of the deal and are in violation of the law.

Unions are planning mass action, including a march to the Union Buildings to highlight the issue.

“Lots of workers are turned away from clinics and doctors,” said Khumbulani Moyo of the Kungwini Amalgamated Workers Union (Kawu) which is affiliated to the National Bargaining Council for Private Security Services (NBCPSS).

The National Union of MetalWorkers of SA (Numsa) private security sector co-ordinator Frederick Mabasa said at least 80% of companies are not complying with the Main Collective Agreement.

“Workers are forced to utilise public health facilities even though they pay towards medical benefits from their salaries every month,” said Mabasa.

“The issue of non-compliance (by security companies) is very broad and very serious,” he said.

Moyo said Kawu, one of the largest unions organising in the private security sector, is in the process of laying criminal charges against companies. He said they were planning public demonstrations in January in a bid to highlight the issue and get the authorities to act.

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“They deduct the money from our members but they don’t forward the funds to the relevant administrator (Affinity Health). Instead, these monies are channelled to unscrupulous service providers for inferior benefits. We are estimating that at least 30,000 workers are affected, and this figure is only those who have come forward (to complain). There could be many more people affected, and we demand that our members be refunded for this theft of their hard-earned income,” Moyo said.

“The Bargaining Council cannot achieve this alone without organised labour and Numsa is finalising plans to embark on mass action to highlight the issue.”

A Limpopo-based security guard who has worked in the sector since 2008 and has worked for four companies, said none of his former employers complied with the agreement and a number of other regulations.

“They deducted money for UIF and pension but when you checked on the system you found out you are not registered. When we raised these issues we were victimised. They will send you to a posting far away from your home and pay your salary late just to frustrate you,” said the man, who joined a new employer in 2021.

He said his employer deducted R150 monthly for medical benefits which allowed him only to buy over-the-counter medication, but not undergo medical consultations.

“It’s tough because this doesn’t include family members. When you need to see a doctor you must pay from your own pocket,” he said.

‘No benefits received’

Another security guard, dismissed after demanding his employer provide workers with their employment contracts, said he had not received any medical benefits since joining the sector five years ago.

He said workers were forced to report for duty even when sick because they cannot afford doctors’ tariffs.

“People hardly have any cash. So when they are sick they are forced to go to work because if you don’t report for work you will be disciplined,” said the Seshego-based man who did not want to be identified.

“I can say 90% of companies doing business with the government are not complying. It’s not easy to determine why these companies are still given [government] business when they don’t comply,” said Mabasa.

Kawu’s Moyo said employees have been affected as a result of companies “moonlighting as administrators of the health insurance plan”.

He said since March 2021 companies have been deducting money from workers’ salaries but failing to forward proceeds to Affinity Health, which, according to the collective agreement, is the sole administrator of the scheme.

Moyo said workers contributed R150 from their salaries while R100 was meant to be contributed by the employer.

In October 2022, legal firm MT Raselo Incorporated, acting on behalf of Kawu, Satawu and AWU, sent a letter to one of the companies they accused of failing to comply with the collective agreement.

Imvula Group

According to the lawyers, the company, Imvula Group, has been acting as a healthcare services provider under the administration of Kaelo Risk (Pty) Ltd. The unions accuse Kaelo, a subsidiary of retailer Dischem, of involvement in the saga.

Johannesburg-based Imvula says on its website it “provides a host of comprehensive risk management services which allow us to manage your risks while you focus on your core business”.

In the letter, the unions’ lawyers accused Imvula of acting unlawfully and being in violation of the collective agreement.

“Imvula Group through an entity perceivably to be provided by a service provider known as Kaelo Risk (Pty) Ltd with the same registration number 2008/023485/07 (“Kaelo”), of which Dischem is a major stakeholder, as Imvula Quality Protection has been marketing the provision of healthcare benefits to its employees who are members of our clients, on the basis that said employees/members are employees of the Imvula Quality Protection. 

“This conduct on the part of Imvula is unlawful and in violation of the Collective Agreement. In terms of the Collective Agreement Kaelo Risk and Dischem are not the appointed service providers and as such cannot approach the employees,” the letter from Raselo to Kaelo reads in part.

“In light of the above conduct by Imvula Group and Imvula Quality, we are instructed as we hereby do, to lodge a complaint against them on behalf of our clients. To this end the Financial Sector Conduct Authority is called upon to investigate this matter,” Raselo wrote. 

Kaelo CEO John Jutzen said the company was not aware of the letter from Raselo.

“…we are not aware of, nor in written correspondence from MT Raselo Incorporated and have no knowledge of the content contained in the alleged communication,” Jutzen said in written response to a media inquiry.

He said Kaelo is not party to any legal proceedings regarding the subject matter of this particular inquiry, “nor are we aware of any charges referred to and we explicitly deny any wrongful conduct.”

“We specifically refrain from commenting on contractual agreements pertaining to our clients and suppliers,” Jutzen said.

Receipt of complaint confirmed

Zongezile Baloyi, executive corporate services at the Council for Medical Schemes, confirmed receipt of the complaint.

“The matter under enquiry was lodged with the CMS and the alleged non-compliance by the exempted entity was reviewed in consultation with internal units,” said Baloyi. 

He did not reveal the exact details of the probe or whether the CMS is investigating other companies not mentioned in the letter by Raselo.

“We cannot say as our internal processes are still underway. We are not in a position to pronounce on this at this stage,” he said, adding that a preliminary review will be issued.

The Private Security Industry Regulating Authority (PSIRA), a body falling under the South African Police Service and tasked with regulating the industry, did not respond to repeated requests for comment. 

The Financial Sector Conduct Authority had not responded at the time of going to press.

In its 2021/22 annual report, the PSIRA CEO said there were 586,042 registered active security officers as at the end of March last year and 11,540 active registered private security businesses. Mukurukuru Media/DM