Basic Conditions of Employment Amendment Bill; Labour Relations Amendment Bill: public hearings Day 3

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Labour

30 July 2012
Chairperson: Mr M Nchabeleng (ANC)
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Meeting Summary

Agri South Africa commented on the provisions in the Bills concerning equal treatment of temporary workers, the limitations on restructuring and retrenchments and prohibited conduct.  Labour tenants were specifically excluded farm workers and accommodation of farm workers were dealt with in the employee/employer contracts.  Other concerns were over the proposed provisions concerning the recognition of minority unions, increases in the actual rates of pay (which would encourage employers to pay only the minimum wage), the financial impact of heavy penalties on small farmers, the discretionary powers of labour inspectors (which could result in differing outcomes) and the prohibited conduct by employer provisions in the BCEA.  The agriculture sector was concerned that the proposed amendments would be detrimental to job creation and the organisation urged that a new Regulatory Impact Assessment was undertaken.

Members asked for more clarity on the concerns raised in the submission concerning minority unions, penalties, labour tenants on farms, and the purchase of goods and services from the employer.

The submission from the American Chamber of Commerce in South Africa focused on seven principles that should be taken into consideration when amending labour law.  The principles were whether the proposed legislation would make dismissal routines more complex; whether the ability to employ temporary workers was restricted to eased; whether there was an increase in the centralisation or decentralisation of union power; the impact on labour relations; the impact on productivity, whether industrial action would increase or decrease in intensity and whether dispute resolution would become more expeditious and less costly.  The organisation concluded that the proposed legislation provided more protection to currently employed workers but would have a negative effect on job creation and the country’s ability to attract direct foreign investment.  The submission did not include specific comment on the provisions contained in the Bills.

Members pointed out that the proposed legislation was intended to reduce the continued exploitation of vulnerable workers, which was historically the case in South Africa.  Members asked for more clarity on the comments made in the submission concerning the level of expertise and qualifications of temporary workers and the need for flexibility in the legislation when dealing with temporary labour.

The submission from the National Council of Trade Unions included detailed comment on the proposed amendments in the Bills.  The union was opposed to the amendments to sections 64, 69(1), 69(12), 71A, 127, 188B, 191(12) and 198 of the LRA but supported all the amendments to the BCEA.  The union was vehemently opposed to labour broking, which practice was likened to slavery and should be banned.

Members were concerned over the remark made in the presentation that “strikes were meant to hurt the employer”.  Members asked for more clarity on the union’s opposition to the proposed amendments to section 64 of the LRA, recognition of minority unions, what would be considered to be adequate representation and the escalation of violent industrial action.  Members asked for comment on the constitutional amendment that would be needed if labour brokers were to be banned.

The South African Local Government Association commented on the need to classify refuse collection as an essential service; the inclusion of representatives of local government authorities at NEDLAC; ILO, the need to make provision for liability for damage to public property during industrial action; the need for a secret balloting process, unfair dismissals and dismissals because of changes in operational requirements; fixed-term employment contracts and the need for adequate regulation of labour brokers.

Members asked for further clarity on the issue of local government representation at NEDLAC and the position of local government authorities on labour broking.  Members invited comment on the potential for increased industrial action as a result of the balloting provisions and asked for alternative proposals to the provisions dealing with dismissals.  Members suggested that the matter concerning the designation of refuse collection as an essential service was referred to the Essential Services Committee.

The focus of the submission from the Labour Broking Division of the Constructional Engineering Association of South Africa was on the unintended consequences of the proposed amendments to section 198 of the LRA.  The organisation disputed some of the accusations generally leveled against labour brokers.  A detailed breakdown of the current labour costs and the impact of the proposed legislative changes on labour costs were provided.  The submission included the personal testimony of a labour broker employee and input from the owner of a temporary employment services company.

Members acknowledged that not all labour brokers were guilty of the exploitation of workers but queried the fees charged by labour brokers and if workers were regarded as employees by brokers.  Other questions pertained to the enforcement of labour regulations and the role of the inspectorate.  The organisation was invited to report details of instances where labour inspectors had failed in their duties.

The Solidarity Trade Union suggested that the Employment Equity Amendment Bill and the Employment Services Bill were considered in conjunction with the amendments to the LRA and the BCEA and that a new Regulatory Impact Assessment was done before the legislation was finalised.  Specific comment on sections 21, 64, 65, 111, 144, 188A, 188B, 198A and 198B of the LRA and section 55 of the BCEA was provided.

Members asked for more clarity on the suggestion that an employee be allowed to request a pre-disciplinary enquiry (section 188A of the LRA) and on the comments regarding de-registration of a trade union (section 111 of the LRA).

The submission from Agri Wes-Cape was focused on the concerns of farmers in the Western Cape.  Farmers felt that the proposed amendments were unnecessarily restrictive and that there were better alternatives available to achieve the objectives of the labour legislation.  Detailed comments were made on the proposed amendments to sections 21 and 198 of the LRA and sections 33, 55, 68 and 69 of the BCEA.  The scope for job creation in the agriculture sector was emphasised.

Members queried the concerns over farm shops and asked for further comment on the provisions allowing the Director-General of the Department of Labour to have recourse to the Labour Court to enforce compliance in the first instance.

The Congress of South African Trade Unions had made a written submission, which included comment on the socio-economic considerations and distortions in the labour market that needed to be taken into account when considering labour legislation and specific comment on the sections in the LRA and BCEA dealing with collective bargaining and organisational rights; strikes and lockouts; essential services; dispute resolution and dismissals; the regulation of non-standard or a-typical employment; provisions affecting children and sectoral determinations.  The submission included suggestions for alternative or new clauses.  A comparison between nominal and real unit labour costs was included as an annexure to the submission.

Members asked for clarity on the meetings COSATU had with the leadership of the ANC; the organisation’s perspective on a-typical, temporary or contract workers; its support for a Regulatory Impact Assessment; proposals to deal with violent strike action; the organisation’s view of rubbish collection to be classified as an essential service and its position on the banning of labour brokers.

Meeting report

Agriculture South Africa (Agri SA) submission
Mr Anton Rabe, Chairperson, Agri SA presented the submission (see document).

The submission included an introduction to the organisation and highlighted the relevance of the Vision 2030 job creation objectives to the agricultural sector in South Africa, in particular the issues concerning a-typical employment and flexibility in a sector that was characterised by peak seasonal demands for labour.  AGRISA was a member of Business Unity South Africa (BUSA) and endorsed the BUSA submission on the Bills.

AGRISA commented on the provisions in the Bills concerning equal treatment of temporary workers, the limitations on restructuring and retrenchments and prohibited conduct, which was of particular interest to the sector.  AGRISA pointed out that labour tenants specifically excluded farm workers and accommodation of farm workers were dealt with in the employee/employer contracts.  Concerns with the provisions concerning the representation thresholds of minority unions were based on the fact that the employee and employer in the agricultural sector had a unique relationship and generally shared the same environment.  The potential for interference by an unwanted minority third party was not welcomed.  The provision for increases in the actual rates of pay could result in employers paying only the minimum wage.  The provisions concerning compliance and enforcement were problematic and it was suggested that the requirements of convention 81 of the international labour Organisation (ILO) were applied instead.  The heavier penalties would have a significant financial impact on particularly small farmers and the discretionary powers of labour inspectors could result in differing outcomes.

The agriculture sector was suited for the creation of many jobs but AGRISA was concerned that the proposed amendments would achieve the opposite effect.  The organisation urged that a new Regulatory Impact Assessment (RIA) was undertaken.

Mr A Williams (ANC) was concerned over the statement in the submission that the recognition of a minority union was unwanted and that this would resulted in unwanted outside interference.

Ms L Makhubela- Mashele (ANC) asked for more clarity on the stance on penalties as these were intended to correct non-compliance.

Mr S Motau (DA) asked for examples of the agricultural commodity organisations represented by AGRISA.

Mr A Van der Westhuizen asked for details of the legal provisions concerning labour tenants and more clarity on the concerns in this regard.

The Chairperson advised that the various organisations were welcome to provide more detailed written responses, alternative proposals and suggestions to the Committee within the following five days.

Mr Rabe responded that the fundamental right to association should be recognised.  The right would be compromised if the sector was forced to recognise minority unions, which did not represent the workers.  He explained that the agricultural sector comprised the three main groupings of grains, animal husbandry and horticulture.  Members of AGRISA included organisations representing grain growers, sunflowers, meat and dairy producers, wool producers and fruit, wine and vegetable producers.

Ms Elize Van der Westhuizen, Senior Manager: Industrial Relations, AGRISA explained that the imposition of heavier penalties would not necessarily rectify the problems with compliance.  AGRISA felt that a “big stick” approach was not necessary and that more could be achieved if there was more assistance from inspectors to resolve areas of non-compliance.  The penalty provisions in the legislation were not intended to close down businesses but the hefty fines envisaged would lead to untenable financial hardship.  AGRISA was not opposed to penalty provisions but suggested that the emphasis was on providing assistance to comply, which was more in line with the ILO conventions.

Ms Annelize Crosby, Parliamentary Officer, AGRISA added that the majority of farmers operated as small businesses and heavy penalties would have a negative impact on financial viability.  Labour tenants were covered by the provisions in section 55 of the BCEA.  The practice of labour tenantry was most common in KwaZulu Natal and Mpumalanga, where tenants earned minimal wages but were allowed to utilise portions of the farm for their own account.  The Land Reform Act included definitions of labour tenants and farm workers but it was difficult to put a value on cropping and grazing benefits.  AGRISA felt that the Minister of Labour should not be involved in a matter that was the responsibility of the Minister of Agriculture and Land Reform.

Ms Makhubela-Mashele asked for more clarity on union activity being regarded as unwanted interference on farms.

The Chairperson pointed out that certain fines were imposed by a magistrate and not by a labour inspector, for example in cases involving child labour or abuse of workers.  Legislation was intended to address instances where the law was violated.  He was perturbed by the continued reports of child labour on farms.

Ms Makhubela-Mashele asked if it was considered to be acceptable for small businesses to get smaller penalties and be allowed to get off lightly when transgressing the law.

The Chairperson observed that the Committee would need to separate the Extension of Security of Tenure Act (ESTA) from deliberations on the labour Bills.

Ms H Line (ANC) asked for more clarity on the concerns regarding section 33 of the BCEA, which dealt with acquiring goods and services from the employer.

Mr Rabe replied that there should be choice about whether or not a minority union was recognised.  The legislation should not impose recognition of a minority union on employers.

Ms Van der Westhuizen advised that AGRISA was in full agreement that issues of child labour, forced labour or abuse of workers that infringed their dignity should be dealt with stringently by magistrates by imposing heavy penalties.  The concern was over heavy penalties being imposed for administrative issues, which did not impact on workers and which could be easily and speedily corrected.  Farms were often situated in remote areas and many farms had small shops where workers could purchase goods.  Workers were not forced to purchase from the farm shop and it was undesirable to create a situation where it would become a criminal offence if a farmer offered goods for sale to his employees.  More clarity was required in the legislation on what was considered to be financial benefit.

Ms Crosby said that farm workers were not included in ESTA but fell under the Labour Tenants Act.  It would be necessary for the committee to take the legal provisions in other applicable laws into account when deliberating on the Bills.

The Chairperson noted that certain workers had rights of tenure, which were not related to labour rights.

American Chamber of Commerce in South Africa (AmCham) submission
Mr Shibishi Maruatona, Head: Public Policy and Corporate Affairs, General Motors South Africa presented the AmCham submission (see document).

The submission did not include specific comments on the Bills but examined seven principles that should be taken into consideration when amending labour law in some detail.  The principles were whether the proposed legislation would make dismissal routines more complex; whether the ability to employ temporary workers was restricted to eased; whether there was an increase in the centralisation or decentralisation of union power; the impact on labour relations; the impact on productivity, whether industrial action would increase or decrease in intensity and whether dispute resolution would become more expeditious and less costly.

AmCham concluded that the proposed legislation added protection to the 2.7 million unionised workers who were currently employed rather than benefited the 4.2 million unemployed people in the country.  The legislation could have a negative effect on the country’s ability to attract direct foreign investment.  The organisation suggested that the proposals were examined for unintended consequences; that a RIA was undertaken prior to enactment and that alternative ways to achieve the objectives were explored.

Mr Williams pointed out that the proposed legislation was intended to reduce the continued exploitation of vulnerable workers, which was historically the case in South Africa.  He was of the opinion that AmCham was a “pro-profit, worker-exploited driven organisation” and although its opinion was welcomed, he felt that it was out of place in the Committee.

Ms Makhubela-Mashele observed that people generally worked to save for their retirement.  The example of temporary employment service (TES) work cited in the presentation appeared to assume that temporary workers did not have the expertise and qualifications of a permanent worker.  She did not believe that new entrants to the labour market should be regarded as un-trainable.  The provisions limiting temporary work to six months would allow TES employees to commence saving for retirement much sooner than was currently the case and reduce the burden on the State.

Mr Motau asked if it was necessarily detrimental if temporary workers were paid a premium rather than receiving benefits.

Mr K Manamela (ANC) asked for more clarity on the statement that the proposed legislation would result in less flexibility.  If full-time employment was offered to a new employee after the probationary period, the employer was satisfied with his/her performance.  The same principle should apply to temporary workers.  The argument that the legislation would result in an increase in the membership of unions was not convincing as all employees currently had the right to join a union.  The protection of the right to economic freedom included the right of workers to participate in the economy as well as the right of employers to make a profit.  The cost of labour was not the only factor in promoting job creation but several submissions had stressed the negative impact of the Bills on job creation.

Responding to Mr Williams’ comment, Mr Maruatona remarked that lawmakers should not exclude the views of other parties when passing legislation.  The history of exploitation of vulnerable workers in South Africa was acknowledged and he agreed that attempts to reduce exploitation must be made.  The legislation should ensure fair treatment of all and he believed that the laws currently in place made adequate provision for the protection of vulnerable workers.  However, the legislation had to be properly enforced before new laws were passed.  He agreed with the need for retirement savings but did not think that all temporary workers lacked the necessary qualifications and experience.  Not all permanent employees received benefits.  The principle was that employees were appointed to permanent positions because they were considered to be competent, not because they had been in a temporary position for longer than six months.  The legislation currently made provision for dismissals within probationary periods and should allow for such flexibility when dealing with other types of workers too.

The Chairperson commented on the significant impact of past experiences in South Africa on the action taken by government.  Parliament had to ensure that the iniquities of the past would be addressed and would never be repeated.

National Council of Trade Unions (NACTU) submission
Mr Joseph Maqhekleni, President, NACTU presented the introduction to the submission and Mr Thulani Khumalo, NACTU Official presented the section dealing with specific comment on the Bills (see document).

NACTU was opposed to the proposed amendments to sections 64, 69(1), 69(12), 71A, 127, 188B, 191(12) and 198 of the LRA.  The union was strongly opposed to continued legislative support for labour brokers.  All the proposed amendments to the BCEA were supported although the union could not understand why compliance and enforcement of the existing legislation remained problematic.

The Chairperson asked NACTU to provide suggestions and alternative propositions to the amendments that were not supported by the union.  He found the format of the submission to be useful and easy to follow.

Mr Williams asked for more clarity on the union’s opposition to the proposed amendments to section 64 of the LRA, which made provision for the balloting of members before a strike was called. 

Mr Motau was concerned over the remark that “strikes were meant to hurt the employer”.  He acknowledged the level of frustration but such a mindset could result in the employer being forced out of business.  He noted the vehement opposition to labour broking by the union and asked if NACTU was suggesting that the Constitution was amended as it currently allowed labour brokers the right to do business.  The provisions dealing with representation was intended to eliminate uncertainty and he wondered what NACTU would consider to be adequate representation.

Mr Van der Westhuizen noted that NACTU supported the proposed amendments concerning the recognition of minority unions.  Most employer organisations making submissions had cautioned against the amendments on the basis that violent industrial action would escalate.

Mr Marius Moloto, General Secretary, NACTU explained that workers’ right to strike and the employer’s right to lockout came into effect when the collective bargaining process was deadlocked.  The requirement for balloting would result in more frustration, gave an unfair advantage to the employer and involved third parties, who had nothing to do with the strike.  NACTU was of the opinion that labour brokers traded with human beings and that their activities were akin to slavery.  This was intolerable and in his opinion it would not be unconstitutional to ban labour brokers.

Mr Maqhekleni remarked on the need to address the widening inequality gap in society.  On the issue of sufficient representation, he said that competition in the labour movement was welcomed and that workers had to have the choice to select the best organisation to represent their interests.  He conceded that there had been an escalation in violent industrial action in recent times but said that there were a number of reasons for the violence.

South African Local Government Association (SALGA) submission
Councilor Speedy Mashilo, National Executive Committee Member, SALGA and Mr Rio Nolutshungu, Executive Director, SALGA presented the submission (see document).

The submission from SALGA included some general comments on the Bills as well as specific comment on the need to include refuse collection in the designations of essential services; the representation of SALGA at NEDLAC and the ILO, provision for liability for damage to public property during industrial action, the need for secret balloting of union members, unfair dismissals and dismissals because of changes in operational requirements, fixed-term employment contracts and the regulation of labour brokers.

The Chairperson suggested that the matter concerning the designation of refuse collection as an essential service was referred to the Essential Services Committee.

Mr Manamela asked for more information on SALGA’s request for representation at NEDLAC.  The three tiers of government included local government and the government representatives at NEDLAC already represented the interests of SALGA.  NACTU had argued that the balloting provisions would result in more illegal strike action and he wondered what SALGA’s position was on the recognition of minority unions.

Ms Makhubela-Mashele asked for more clarity on SALGA’s position on labour broking and the utilisation of outsourced labour and temporary workers by municipalities.

Mr Van der Westhuizen asked for more information on the comment concerning unfair dismissals (section 187(1)(c) of the LRA.  He asked what SALGA suggested as an alternative to the provisions concerning dismissals for operational requirements (section 189A).  The proposed amendment had arisen from conflicting interpretations of the existing legislation by the Labour Court.

Mr Mpho Nawa, Deputy Chairperson, SALGA responded that local government was an employer body with its own bargaining council and as such should be part of the discussions at NEDLAC.

Mr Mashilo said that not all members of unions necessarily agreed to go on strike and were subjected to intimidation.  It was important to allow minority positions to be expressed and that all workers going on strike were prepared for the consequences.  A secret ballot would protect members of unions from intimidation. 

Councilor Parks Tau, NEC Member, SALGA said that uncollected rubbish posed a serious public health hazard.  Rubbish collection should be considered to be an essential service, without the current proviso that it only became so after 14 days of non-collection.  SALGA was of the opinion that labour broking should be properly regulated.  Labour brokers provided a useful service to employers but must not be allowed to exploit workers.  Local government authorities had seasonal labour requirements, for example swimming pool attendants.

Clr Tau said that government played a critical socio-economic role through its legislative and planning activities.  Local government was not necessarily adequately represented at NEDLAC by the national government representative.  SALGA wanted to be included in the gathering of social partners and play a more active role as an employer body.

Mr Manamela pointed out that NEDLAC was not only concerned with labour issues.  He suggested that SALGA forwarded a more detailed motivation for its inclusion at NEDLAC to the Committee.

Constructional Engineering Association of SA: Labour Broking Division submission
Advocate Msuthu Matshani, Deputy Chairperson, CEA-LBD presented the submission (see document).

The Constructional Engineering Association (CEA) was established in 1949.  CEA-LBD operated in the construction and engineering sectors and offered labour broking services.  The submission expanded on the unintended consequences of the proposed amendments to section 198 of the LRA and disputed some of the accusations leveled against labour brokers.  A detailed breakdown of the current labour costs agreed in the metal and engineering industries bargaining council and the impact of the proposed legislative changes on labour costs were provided.

Mr Reuben Ramukhesa presented his personal experience as a labour broker employee.  As a school leaver, he failed to find work for a year and was unable to support his family.  He joined a labour broker in 2000.  Since then, he had not only remained in steady employment but had developed his career to the point where he was currently employed in a management position.

Mr Williams observed that the service fee charged by a labour broker was 20% of the cost of labour to the employer.  He was not convinced that labour brokers did not exploit workers and maintained that labour broker employees had no job security.

The Chairperson commented that it would be necessary to consider the issue of sustainable livelihoods in addition to the matter of job creation.

Ms Makhubela-Mashele asked for more clarity on the comments concerning the application of regulations.

Mr Van der Westhuizen asked if it was easier for a labour broker employee to work in different sectors and for different companies without having to resign and interrupt his service record.

Mr Motau noted that most contributors had called for an improvement in the enforcement of the legislation by the labour inspectorate.  He asked what the experience of CEA-LBD had been in this regard.

Mr Manamela conceded that CEA-LBD might not be guilty of exploitation of its employees but labour brokers were generally considered to be exploitative.  He asked for more information on the bargaining council process and the agreement between the unions and employers in the metal sector with regard to a six month period of temporary employment.  There appeared to be agreement that a person should not be a permanent temporary worker and he asked for suggestions on how this practice should be dealt with.  He asked for more clarity on how labour brokers created employment.  It had been claimed that South Africa was losing jobs to other countries because of the high cost of labour but other factors (such as the cost of production) also played a role.  He disagreed with the statement made in several submissions that the cost of labour was the major factor preventing job creation.  Employment creation was subject to a number of factors.

Adv Matshani explained that input costs were mainly driven by labour and production costs.  He offered to make the results of a study on the impact of Chinese imports on the economy available to the Committee.  He cited the example of the huge difference in the hourly rate applicable to a Code 10 driver in the transport and the metal and engineering industries sectors to illustrate the effect of different bargaining council agreements.  The experience of labour legislation enforcement had been that the labour inspectorate was “pathetic”.  It should not be necessary for employers to educate the inspectors from the Department of Labour.  It had been found that the inspectors did not practice what they preached when it came to compliance to health and safety regulations.  The major issue that should be addressed was compliance to labour legislation.

Ms Angela Dick, Chief Executive Officer, Transman gave an overview of the employment services company she established in 1983.  She became aware of the desperate plight of people standing outside factory gates in the hope of finding work.  These were the most vulnerable category of workers as many were illiterate, had few skills and lacked the necessary expertise to successfully apply for jobs.  Exploitation of these workers was rife.  She had the necessary background and ability to persuade employers to provide employment for these workers.  She estimated that her company had placed more than 1 million workers in employment over a thirty year period.  Her company employed 300 people.  It was critical to give job-seekers a chance, to develop the skills of workers and to ensure that temporary workers were re-deployed once an assignment came to an end.  She was proud of the achievements of her company and had even managed to persuade an insurance company to provide a provident fund that was suited to temporary workers.

Mr Ramukhesa related how he had worked for food as a youngster as both his parents were unemployed.  His employment by Transman and his own hard work and diligence had allowed him to gain wide experience and develop his career.  He lauded the labour broker for helping people to find work.

Ms Makhubela-Mashele wanted to know if Transman regarded itself as an employer or as an organisation that placed people in positions at other companies.  She asked if the 300 Transman employees were permanent or temporary personnel.

Ms Dick explained that a vacancy in a job needed to exist in the first instance.  A suitable candidate was then found to fill the vacancy.  If a suitable person was not available, the employer was persuaded to provide candidates with the opportunity to improve their skills.  Transman had a core of 300 permanent administrative employees as well as 150 temporary employees who were in the process of acquiring more skills.  The standard administration cost for all employers was 5%.  The client paid a fee of 10% to the employment services company to cover administration cost and the cost of ensuring that the employee arrived at work.  Transman had more than 100 vehicles to transport employees to and from work.

The Chairperson was dismayed that a labour inspector did not understand what he was responsible for.  He asked for details of the incident to be forwarded to the Committee for investigation.

Solidarity Trade Union submission
Mr Johan Kruger, Head: Solidarity Research Institute and Mr Paul Joubert, Senior Researcher, Solidarity presented the submission (see document).

Solidarity suggested that the Employment Equity Amendment Bill and the Employment Services Bill were considered in conjunction with the amendments to the LRA and the BCEA and that a new RIA was done before the legislation was finalised.

The submission included specific comment on sections 21, 64, 65, 111, 144, 188A, 188B, 198A and 198B of the LRA and section 55 of the BCEA.

Mr Van der Westhuizen asked for more clarity on the suggestion that an employee should be allowed to request the appointment of an arbitrator to conduct an enquiry into allegations about his/her conduct in terms of section 188A of the LRA.

The Chairperson asked for more clarity on the comments regarding section 111 of the LRA, which dealt with de-registration of trade unions.

Mr Kruger undertook to provide a more detailed written response to Members’ queries.  Currently an employee did not have the right to request a pre-dismissal enquiry.  Once the Registrar had decided to de-register a trade union, the de-registered status applied regardless of whether or not the union had launched an appeal.  Solidarity suggested that de-registration was suspended at least until the union’s appeal had been heard.  The union had the right to be heard by the judiciary on why it should not be de-registered.

Agri Wes-Cape/Wes-Kaap (AWK) submission
Mr Hermann Nieuwoudt presented the submission from AWK (see document).  The organisation was represented by Mr Carl Opperman, CEO and Mr Jack van Wyk, Executive Officer.

The submission included an introduction to AWK, its membership structure and associations with other business entities.  The main focus was on the concerns of farmers in the Western Cape.  In general, farmers felt that the amendments were unnecessarily restrictive and that the objectives could be better achieved by alternative means.  The farming sector remained committed to participate in the legislative process.

Specific, detailed comments were made on the proposed amendments to sections 21 and 198 of the LRA and sections 33, 55, 68 and 69 of the BCEA.  The scope for job creation in the agriculture sector was emphasised.

Mr Van der Westhuizen did not see why there should be a problem with farm shops as his understanding of the relevant provision in the BCEA was that an employer could not compel an employee to purchase goods and services from him.  He thought that the proposed amendments concerning written undertakings from employers to comply were less stringent than the current legislation.  He pointed out that the provision allowing the Director-General of the Department of Labour to have recourse to the Labour Court to enforce compliance was not the only remedy available.

Mr Motau noted the comments regarding the purpose of the amendments and asked if AWK was of the opinion that the current legislation did not require any amendment.  He understood that the concern over farm shops was that workers could use this as a pretext in order to make trouble for the farmer.

The Chairperson observed that some of the proposed amendments had arisen out of complaints from workers, for example exorbitant prices charged for goods by farm shops and the nefarious practice of paying workers with wine (also known as the “dop” system).

Mr Nieuwoudt replied that the concern over section 33A of the BCEA was that a dispute over the prices charged for goods would become a criminal matter to be dealt with in the Magistrate’s Court.  The legislation did not prohibit farm shops but the severity of the consequences was not warranted in such cases.  He agreed that farm shops should charge reasonable prices for the items sold to workers but the criminal court was not the appropriate place to deal with complaints.  Currently, provision was made for a voluntary undertaking by the employer to comply, followed by the imposition of an order to comply.  Any objections were referred to the Labour Court.  The proposed amendments allowed the DOL to refer instances of non-compliance directly to the Labour Court.  The current system worked well and the proposed changes were not justified and would result in a significant increase in the burden on the Court.  There was absolutely no justification for the “dop” system, the matter had been dealt with and section 33A was not designed to deal with the matter.

Mr Opperman asked that any evidence of use of the “dop” system be reported to AWK, who will ensure that the matter was dealt with.

The Chairperson asked that such instances were reported to the Committee.

Congress of South African Trade Unions (COSATU) submission
Ms Prakashnee Govender, Parliamentary Coordinator, COSATU presented the written submission to the Committee (see document).

In the introduction to the submission, COSATU commented on the socio-economic considerations and distortions in the labour market that needed to be taken into account when considering labour legislation.  COSATU felt that increased regulation and protection for workers were justified. 

Specific comments on the proposed amendments to the LRA concerned collective bargaining and organisational rights (section 21); strikes and lockouts (sections 64, 67 and 69); essential services (sections 70, 71 and 72); dispute resolution and dismissals (sections 187, 188, 189 and 190) and the regulation of non-standard or a-typical employment (sections 43, 44, 186 and 198).  Comments on the proposed amendments to the BCEA included provisions affecting children (sections 3 and 4) and sectoral determinations (section 8).  A comparison between nominal and real unit labour costs was included as an annexure to the submission.

Mr Van der Westhuizen said that NEDLAC was intended to achieve a balance between the needs of organised labour, business and the social sector.  He was perturbed to hear that COSATU had held meetings with the leadership of the ANC to address its concerns over the Bills.  The data provided by COSATU in support of the union’s position was noted.  Parliament was committed to protect the rights of all South Africans, including the rights of traders whose stalls were looted by strikers during protest marches.  He noted that COSATU had suggested that certain amendments were deleted but would like to know what the alternative proposals were to resolve the underlying problem, for example how the widening gap between the prosperous and poor sectors of society could be addressed, how violent strike action could be reduced and how the interests of third parties (such as the owners of business premises) could be balanced with the rights of employers and workers.

Mr Motau was intrigued by the comment that labour legislation tended to “play catch-up” when reference was made to a-typical, temporary or contract workers.  The aim of legislation was to arrest or reverse a situation considered to be undesirable but he wondered if the global trend towards a-typical employment could not be regarded as beneficial.  The focus of the legislation should be on stopping abusive practices.  He asked if COSATU supported undertaking a new RIA or had alternative solutions for improving the labour regulatory environment.

Mr Manamela remarked that COSATU had the right to engage with any person or entity outside NEDLAC.  The issue of the right to strike was dealt with in detail in the submission but did not address the concern over recent strike action that had resulted in extensive damage to public and private property, including the looting and destruction of the stalls of poor street vendors.  It was important that striking workers respected the rights of the public during strike action and he would like to hear proposals on how this could be achieved.  The need to consider related legislation was noted.  He asked for comment on the request from SALGA that rubbish collection was designated an essential service.  He was aware that COSATU wanted labour brokers to be banned outright but the Committee would like to know what issues had to be taken into considerations during deliberations on the Bills.

Ms Govender responded that COSATU had been open about its discussions with the ANC and had released public statements afterwards.  Lobbying was not regarded as contrary to the legislative process and there was no intention to undermine the process either.  COSATU disagreed that there were benefits to temporary employment as most temporary workers received no benefits at all and could be regarded as the “working poor’.  Employment was not only about security of tenure and income.  COSATU had not agreed with the 2010 RIA, which placed much emphasis on the cost of labour and did not take into consideration the social cost of non-regulation, which had not been tested.  The cost and value of labour had to be taken into consideration.  Poorly paid temporary workers were unable to make adequate provision for retirement and ultimately became dependent on the State (i.e. the taxpayer).  The incidents of violence during strike action were usually caused by individuals, who must be held individually accountable for their actions instead of laying the blame on the union.  COSATU was open to further discussion and was exploring non-legislative alternatives, for example a special strike police force as was the case in certain countries.  She denied that the majority of industrial action was violent.  Most strikes and marches were peaceful but this was not reported in the media.

Mr Neil Newman, Researcher,
National Education, Health and Allied Workers Union (NEHAWU) added further comment on individuals being responsible for unacceptable and violent behaviour during marches.  He acknowledged that such behaviour was unacceptable but felt it was a result of the high levels of frustration and desperation suffered by striking workers.  COSATU had no objections to temporary employment services but was against labour brokers, who provided temporary workers to an employer on a permanent basis.  Many services could be considered to be of an essential nature (for example transport and teaching) but no immediate harm would be caused if such services were suspended.  He was not willing to comment on the request of SALGA to consider refuse collection as an essential service.

The Chairperson remarked that unions had blamed violent strike action on agents provocateurs, who had joined in protests with the intention to cause mayhem and ‘disappeared’ before they could be apprehended.  He said that union marshalls were responsible for ensuring that all participants in strike action behaved.

The Chairperson thanked all the participants for the input provided during the public hearings on the Bills.  The Committee looked forward to receiving the additional information requested in due course.  The Committee would consider all the submissions received and would meet on 6 August 2012 to consider the draft summary of submissions.  The Committee would then discuss the process to be followed before deliberating on the Bills.  The Parliamentary Legal Advisers and State Law Advisers would be available during the process to ensure the legality of the amendments.  The Committee would take related legislation into account during its deliberations.  Once passed by the Committee, the Bills would be referred to the National Council of Provinces for approval before being tabled and adopted in the House.  Before proceeding with deliberations, the Committee would like to study the NEDLAC report on the proposed legislation.  Invitations to attend future sittings of the Committee would be issued to interested parties.

The meeting was adjourned.

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