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Presentation to the Portfolio Committee on Labour
Parliament of South AfricaFriday 12 September 2014
Social Law ProjectVision
A South African society with a constitutional order, and a regulatory and institutional framework providing for empowerment and effective implementation of the rights of all working people, including non-standard workers
Mission: To strengthen the movement for social and workplace justice through knowledge production that enhances institutional capacity and facilitates dialogue.
Presentation OutlineSocial Context
Constitutional imperatives
Legislative Context
Minimum Wages
The value of work
The national minimum wage – the human development approach
Towards a national minimum wage – some issues
ContextHigh levels of inequality and poverty
high levels of poverty and inequality between population groups
Racial, gender and age dimensions – African women most vulnerable
According to OECD inequality amongst highest in world
Gini co-efficient (2011) -0.69Richest 20% consume 61%; bottom 20%
consume 4.5%45.5% classified as poor – 23 million
Context Contd.
High level of unemployment Unemployment rate 25.2%, among the highest
in the world, second in the Medium Developed Group of countries, after xxxxxx
Lack of social cohesion – high levels of public protest, high levels of strike action
Constitutional ImperativesHuman dignityProtection against unfair discriminationFreedom of expression and associationFair labour practices Right to organise and bargain
collectivelyAccess to social security including social
assistance
Legislative Framework
Labour Relations Act (LRA)Purpose:
To give effect to constitutional rightsTo give effect to ILO obligationsTo provide framework for bargaining on wages
and other terms and conditions of employmentTo promote orderly collective bargaining
Legislative FrameworkLabour Relations Act (LRA)Four pillars for achieving the purpose of the LRA: Organisational rightsVoluntary collective bargainingWorkplace and Bargaining Council Collective AgreementsRight to strike and recourse to lock-out
• Total 7.2 million economically active employees : LFS grades 4-9• Councils in 8/9 industrial classifications (LFS)• 2,3 million (32%) employees covered by bargaining councils• 335, 000 ( 5%) covered by extended agreement
(Godfrey et al 2010)
Legislative Framework
Basic Conditions of Employment Act(BCEA)PurposeTo provide for and enforce basic conditions of employmentTo provide for sectoral determinations by the Minister of Labour, in respect of employees and employers not covered by bargaining council collective agreement
Legislative FrameworkBasic Conditions of Employment Act(BCEA)Sectoral DeterminationsForestryAgricultureContract CleaningTaxi OperatorsCivil Engineering ( Bargaining Council now registered)Private SecurityDomestic WorkersWholesale and RetailHospitality
LearnershipsChildren in performing arts, advertising etc
Under investigation:BuildingFuneral
Legislative FrameworkBasic Conditions of Employment Act (BCEA)Employment Conditions Commission
The ECC must take the following into account when making recommendations to the Ministerthe ability of employers to carry on their business successfullythe operation of small, medium or micro-enterprises, and new enterprisesthe cost of livingthe alleviation of povertyconditions of employmentwage differentials and inequalitythe likely impact of any proposed condition of employment on current employment or the creation of employmentthe possible impact of any proposed conditions of employment on the health, safety or welfare of employeesany other relevant information made available to the Commission.
BCEA - Section 54(3)
Minimum Wages: Sectoral DeterminationsSector Min per hour Min per day
(9 hour day)Min per month
Domestic Work 8.30 74.70 1618.37
Security Officer 11.74 - 2441.00
Forestry 10.94 98.46 2229.32
Farm 12.41 111.69 2420.41
Contract Cleaning 14.19 127.71 2764.92
Hospitality 12.39 111.51 2415.86
Taxi 10.61 95.49 2113.11
Wholesale & Retail 13.16 118.44 2556.30
Civil Engineering 20.50 184.50 3999.42
EPWP (Ministerial Determination) 8.82 70.59
Source : COSATU Organising Department, 2014
Minimum Wage by Sectoral Determination
Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages
Standard Industry Classification Number of bargaining
units
Estimated number of workers
Median Minimum Wage
Agriculture, hunting, forestry and fishing
37 886 047 1614
Community, social, and personal 22 1 130 149 4325
Financial intermediation, insurance, real estate…
111 207644 2755
Manufacturing 453 521 896 3578
Construction 24 151 284 2731
Mining and quarrying 80 217 577 4743
Transport, storage and communication
30 212 596 4778
Wholesale and retail 179 570 967 2782
Electricity, gas and water 3 38 641 7293
Total 939 3 936 801 3500
Source : Labour Research Service, 2013
Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages
Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages
Sectoral Determination
2260
Bargaining Council 3319
Decentralised (Non-statutory)
3979
All Industry 3500
Source: Labour Research Service, 2013
Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages
The Value of Work
ILO Decent Work AgendaConcept and goals
Work a source of income and personal dignityJobs of acceptable qualityImproved social protectionPromotion of social dialogue and tripartism
Country programme agreed in NEDLAC“ Urgent need for national consensus on what constitutes a
minimum wage and minimum level of living sufficient to meet the Constitutional guarantee of life and dignity and the need to
develop wage policy on this basis” (SA Decent Country Work Programme, 2010, at page 8)
The Value of WorkGuiding concept“…work is valued for multifaceted reasons and serves
multifaceted functions, some of which are clearly economic (understood in a restrictive sense of value added and remuneration) and many of which are not. It is in this range of values and functions, both economic and social, that we must seek to understand the place of employment within human development.” (Fischer: 2014 p4)
The Value of WorkSocial & Economic Value In taking this position forward, in the exploration of a
NMW, we would argue that it should locate itself within this range of functions. In support of Fischer’s argument, “A vital role of public policy within development is to strengthen progressive redistributive institutional mechanisms as means to cultivate resilience and positive synergies between social values of employment, and human and economic development.” (Fischer: 2014 p6)
The Value of Work
Work as promoting wellbeing“Occupational justice argues for society
where people can develop their potential to participate fully in life, not just fit pre-established work roles” (Ross, 2007)
Occupations – as what “occupies” time, energy and resources has influence on wellbeing and Human Development
To what extent can domestic work be repositioned to promote wellbeing for all
workers?
The Value of WorkHuman DevelopmentThe human development approach is a fundamental shift
from market domination with its trickle-down effect to a more direct investment in human capital as the most valuable asset of any society. At its core, human development strategies are expected to result in a lower incidence of poverty and a greater degree of equality.
By bringing a human development perspective to existing initiatives, government can consolidate and bring coherence to its projects and programmes and explore and identify new ways of optimizing human development.
The Value of WorkMeasuring Human Development
The Human Development Index
The human development index (HDI) is a composite measure that combines 3 dimensions:
Health Education Living Standards
0 = Extreme Poverty & Inequality Prosperity & Equality = 1
The Value of WorkInequality-adjusted Human Development (IHDI)IHDI measures the “loss” in potential human development due to inequality. The global average loss is approximately 22%. The country with the highest HD, Norway, had a loss of 6.6%, while the country with the lowest HD, Zimbabwe, had a loss of 29.9%. South Africa, as a medium developed country, has a disproportionately high (31.2%) loss in potential HD, due to its high levels of inequality.
The Value of WorkOccupational injusticeDomestic work not valued in comparison to
other labourThe way work is constituted does not respect
personhoodDomestic workers at risk of depression
because of the way that work “occupies” Minimum wage as opportunity to afford
respect for what domestic workers do and defining realistic work expectations
A summaryPatchwork of overlapping bargaining councils, workplace
bargaining and sectoral determinations – issue of representivity
No coherent wage policy to undo apartheid legacyIncreases levels of informal and unregulated workCompliance and enforcement problemsHigh levels of inequality and povertyGrowing wage gap
Why a national minimum wage
Bridging the Wage Gap?
Why a national minimum wageContribute to reducing income inequality and
povertyAddress existing wage fragmentation by way of
uniform coverageProvide protection to vulnerable workersSimple and easy to understand and enforceServe as foundation for improvements to
employment conditions through collective bargaining
Towards a national minimum wage: Recommendations
Foster public consensus on the concept including how figure is to be determined. Much work done already through institutes like SPII
Develop a wage policy as part of Decent Work ILO programme Locate national minimum/a within overall wage frameworkA new collective bargaining model ?
o Coherent demarcation of sectors o Greater state support to NEDLAC, statutory and non-statutory
bargaining fora, better equipped inspectorate etco New section 55(8) – Minister can be supportive of establishing a forum
“for employers and employees who are not covered by any other sectoral determination”
o Unpack levels of bargainingo Must move beyond the existing coverage of “standard employees”.
National Minimum Wage
A Cog in the Wheel of
Human Development