The iconic Market Theatre has been hit by allegations of racism and jobs for pals.

The 42-year-old theatre, which was a bastion of struggle theatre during apartheid, has its black employees up in arms against their chief executive, Ismail Mahomed.

They have laid accusations against him that include racism, unfair salary scales, harassment and abuse.

The staff is outraged and has run out of patience with the Department of Arts and Culture (DAC), which plays an oversight role in its matters.

Mahomed is accused of throwing the phrase, "blacks do not know their jobs" openly for everyone to hear. This has been confirmed by more than six employees.

He's also accused of promoting and increasing the salaries of white and Indian employees only, while the black workers' salaries stay stagnant.

Furthermore, Mahomed is accused of creating positions for his friends and hiring unqualified individuals.

Staffers who spoke on condition of anonymity told of how Mahomed hired a graphic designer in September who had never studied design. More than six sources confirmed the story.

Mahomed is said to have created a position for a white female friend and her girlfriend.

The woman was hired as a sales strategist in July and reports to the chief executive. She is said to have left tourists who were being hosted by the theatre stranded in Krugersdorp without transport and switched off her cellphone the whole day. No disciplinary action was taken against her.

Other allegations concern a female assistant producer who was hired in May last year.

"She reports straight to the CEO, not to the producer, as expected. None of her daily duties are related to producing. Instead, she does venue hiring," said a staffer.

"She complained about a low salary and was told that she would earn commission, which is something that has never been done before."

Approached for comment, Mahomed yesterday neither confirmed nor denied the allegations.

He e-mailed a statement that read in part: "The Market Theatre Foundation and the Department of Arts and Culture have embarked on a process of investigating the allegations and grievances at the Market Theatre Foundation. "

Market Theatre board spokesman Brooks Spectra said the board was aware of the complaints.

"We take all allegations serious ly, whether it is about financial implications, personal misbehaviour or racial antagonism," he said.

He said the board would begin the process to engage an independent adjudicator to look into the allegations.

Arts and Culture Minister Nathi Mthethwa said the department was aware of the allegations and he had met with the Market Theatre Foundation Council, management and all staff members and "impressed on management and council the urgent need to attend to the issues and what the DAC viewed to be areas of grave concern".

Mthethwa said due to the seriousness of the issues, the DAC had since initiated a process to institute a forensic investigation into the Market Theatre Foundation.

"It would be premature to comment on the substantive issues raised in the allegations made while these are still subject of a forensic investigation," the minister said.