Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 126
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SASOL LIMITED GROUP
Other disclosures continued
37 Contingent liabilities continued
37.1
Litigation continued
The Labour Court gave judgment in this matter on 19 September 2019 and ruled against Sasol Mining. It was directing the employer
to reinstate the employees based on substantial unfairness and procedural fairness. Retrospective payment of remuneration was
ordered in different categories, ranging from one to two years’ back-pay. The legal team and external counsel received a mandate
from management to appeal the judgment and papers were filed on 11 October 2019 in this regard.
Sasol Mining has successfully applied for leave to appeal the ruling. The appeal was heard on 24 March 2021. The Labour Appeal Court
has not yet ruled on the matter but requested the parties to attempt to reach a settlement. Sasol Mining presented a settlement
proposal which provided for a lump sum payment in full and final settlement of all claims which was rejected by the Respondents.
The Respondents’ counteroffer was subsequently rejected by Sasol Mining insofar as it required reinstatement of certain employees,
payment of 24 months’ salary to the Respondents as well as the Respondents’ Inzalo benefits. The Labour Appeal Court was
informed that the parties were unable to settle the matter and the Labour Appeal Court’s ruling is now being awaited.
In due of the above circumstances a provision in the amount of R88 million was accounted for at 30 June 2021.
Dispute by Solidarity Trade Union relating to Sasol Khanyisa share scheme
Solidarity referred a dispute relating to the Sasol Khanyisa share scheme to the Commission for Conciliation, Mediation and
Arbitration (CCMA) on 17 December 2017, where after conciliation proceedings commenced on 11 January 2018. On 5 February 2018,
Sasol received a letter from Solidarity demanding a payment to their members (non-qualifying employees for Phase 2 of Khanyisa)
equal to “the market value of the Sasol Khanyisa shares which qualifying employees will be entitled to within seven days after
such entitlement (2028) or payment to each member of R500 000 by the end of December 2018.” A second referral to the CCMA
was received on 8 March 2018, conciliation was attempted on two occasions, on 9 and 25 May 2018, but was unsuccessful and a
certificate to this effect was issued on 14 June 2018. This would entitle Solidarity to conduct a lawful strike provided picketing rules
are in place.
On 25 October 2018, Solidarity served Sasol with its referral of the dispute to the CCMA in terms which Solidarity seeks the dispute
be conciliated as an unfair discrimination matter. If unsuccessfully conciliated by the CCMA, it will be referred to the Labour Court
for adjudication. This process was originally proposed by Sasol, but unheeded by Solidarity. The matter was referred to the CCMA
and was subsequently certified as unresolved in February 2019. On 6 May 2019, Sasol received Solidarity’s statement of claim filed
with the Labour Court in Johannesburg. Sasol filed its replying documentation to Solidarity’s statement of claim on the last day of
July 2019. Subsequently the Judge President of the Labour Court invited Sasol and three other respondents (PPC, ArcelorMittal and
Minopex) in three other cases where Solidarity is the Applicant on similar grounds, to meet. The purpose of the meeting was to
make attempts to consolidate the disputes and set a stated case (combined version setting out the dispute) to afford the court to
save time by hearing similar matters simultaneously. The various legal teams gathered at a meeting during the first week of October
2019 and a draft Statement of Case was prepared. The Labour Court was scheduled to hear the matter on 17 September 2020 in
Johannesburg.
A few weeks prior to this hearing, the prepared Statement of Case formulation was amended by Solidarity and the other parties
unsuccessfully objected to the amended wording. Sasol and the parties, save for PPC who had the date of 17 September 2020
allocated to them originally, decided to withdraw and apply for separate dates to foster their cases individually. No new date has
been received yet, and since Solidarity is the applicant in this matter, it will be responsible for the application of dates.
No provision has been created at 30 June 2021.
Legal review of Sasol Gas National Energy Regulator of South Africa (NERSA) maximum price decision and NERSA gas
transmission tariff application (March 2013)
Pursuant to the 2013 NERSA decisions approving the Sasol Gas maximum gas prices and transmission tariffs, Sasol Gas implemented
a standardised pricing mechanism in its supply agreements with customers in compliance with the applicable regulatory and legal
framework. NERSA approved further maximum gas prices and transmission tariffs based on the same pricing and tariff mechanisms
in November 2017.
Seven of Sasol Gas’s largest customers initiated a judicial review of the 2013 NERSA decisions relating to its maximum price and
tariff methodologies and NERSA’s decision on Sasol Gas’s maximum price and transmission tariff applications. On 15 July 2019,
the Constitutional Court overturned the 2013 NERSA maximum price decisions and ordered NERSA to revise its decisions. The new
decision by NERSA regarding the maximum gas price to be approved for Sasol will apply retrospectively from 26 March 2014 when the
original decisions (now overturned) became effective.
During May 2020, the Industrial Gas Users Association of Southern Africa, an industry association whose members include several
large gas customers, launched an application to review and overturn the November 2017 NERSA maximum gas price decision
approving maximum gas prices for Sasol Gas for the period from 1 July 2017 to 30 June 2020. This NERSA decision was overturned on
3 May 2021 and accordingly, the new decision by NERSA regarding the maximum gas price will apply to this period as well.
Following the above mentioned outcome of the appeal to the Constitutional Court, NERSA must approve new maximum gas prices
for Sasol in terms of the provisions of the Gas Act. After a public consultation process in which Sasol participated, NERSA, during
April 2020, adopted a new maximum gas price methodology, which was published by NERSA in June 2020. After the adoption of the
new maximum gas price methodology NERSA engaged with licensees and affected stakeholders on the intended application of the
methodology. Pursuant to the Sasol Gas price application submitted to NERSA in December 2020, NERSA, on 6 July 2021 published
its maximum gas price decision in which it approved maximum gas prices for Sasol Gas for the period from 2014 up to 2021 and
determined how the maximum prices are to be determined for 2022 and 2023.
The future implementation of the new NERSA approved maximum gas price could have a material adverse effect on our business,
operating results, cash flows and financial condition. Because the new maximum gas prices approved by NERSA for the period of
the overturned decision is lower than the actual price charged to a large number of Sasol Gas’ customers, a retrospective liability
may arise for Sasol Gas when customers institute claims for compensation based on the differences between the new approved
maximum gas prices and actual gas prices historically charged by Sasol Gas.
Sasol Gas raised a provision of R1.4 billion as at 30 June 2021 in respect of these anticipated claims.
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Sasol Annual Financial Statements 2021