Farm workers strike in Western Cape and sectoral determination review: Department of Labour briefing

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Employment and Labour

18 February 2013
Chairperson: Mr M Nchabeleng (ANC)
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Meeting Summary

The Department of Labour (DOL) summarised the history behind, and the developments after the 2012 strikes of agricultural workers, particularly the violent strikes in the Western Cape that cost millions of rands of damage, loss of life and of jobs. It was noted that the farmworkers’ sector had traditionally been unable to organise itself into functioning trade unions, due largely to the high costs and logistical difficulties caused by workers being so far distant from each other, whilst the farmers’ sector was only partially organised into employer groups, which caused difficulties during the attempts to negotiate. The sector had been guided by a sectoral determination rather than a minimum wage. There had been attempts by the Minister of Agriculture, Forestry and Fisheries to get the parties to the negotiating table, but attempts were unsuccessful up to 12 November 2012. The Department of Labour then published its intention to re-look at the sectoral determination and try to establish a minimum wage, and had met with representatives from labour and employers on 16 November. Parties agreed, when they met at the Commission for Conciliation, Mediation and Arbitration on 22 November 2012, that it was necessary to consider short, medium and long-term challenges, and to look at possible solutions within and outside the existing legal framework. A task team consisting of two representatives from each grouping was formed, and a number of procedural points agreed upon, including that the Bureau for Food and Agricultural Policy (BFAP) must provide an agricultural economic analysis. However, its failure to do so on time led to a breakdown of the negotiations and more strikes. Attempts to resume the process in January 2013 were thwarted by employer parties claiming to have no mandate. However, alongside the negotiation process, the DOL was running public hearings, with about 1 500 submissions being received. The worker organisations demanded a wage of at least R150 per day. The BFAP report was eventually received and it concluded that most farms would be unable to absorb the increase, would be unable to cover their operating costs and service their debt, and even the rise to R150 per day would not give food-security to the workers. The Employment Conditions Commission took all submissions into account and recommended a rise to R105 per day as a minimum wage, and allow farmers who claimed that they were unable to pay the increases the opportunity to apply for an exemption. It also recommended that the DOL must undertake an impact assessment and take the process further with Nedlac. DOL was later informed by Agri-SA that farmers in Limpopo and Mpumalanga were intending to retrench about 2 000 workers, and it was noted that there had been a marked increase in applications for foreign labour permits.  

Members asked what steps DOL had taken to address the lack of collective bargaining in the sector, and several indicated that they were opposed to local labour being replaced by foreign labour, and the retrenchments. They suggested that more labour inspectors be deployed by DOL to check compliance at farms, and that it levy fines for non-compliance. Several spoke to the fact that the raise to R105 per day was still shockingly low, questioned if this was a living wage, and commented that farmers may decide to mechanise. They commented also that farmers were not currently running competitive business, that imports were cheaper than local produce, particularly given the vulnerability of the sector to climate and crop failures. All were agreed on the need for holistic approaches by several departments, including improvements to rural infrastructure. The Chairperson emphasised that farmers and workers were essentially in a symbiotic relationship, but the imbalances in that must also be recognised and addressed, including the lack of literacy amongst many farm workers. One Member said that the first question must be whether farming was profitable and several asked how the exemptions process would work, noted that some farms were owned by consortiums and that each case must be judged on its own merits. All agreed that a transparent process must be followed, with proper communication by Agri-SA, and set time-frames. It was concluded that more research and more resources would be needed to address the issues.


Meeting report

Farm workers strike in Western Cape and sectoral determination review: Department of Labour briefing
Mr Les Kettledas, Deputy Director General, Department of Labour, reported that during 2012 and 2013 there had been several farmworkers’ strikes in Western Cape. Government decided to opt for a mediation procedure to try to reach settlement on the various issues. The Minister of Agriculture, Forestry and Fisheries (DAFF) had called a meeting on 10 November 2012, to try to resolve the strike. However, farmers regarded this as invalid because they did not have any mandate to enter into discussions and negotiations on wages. They had proposed that the matters should be resolved, if possible, at farm level. The negotiations came to a halt. The Minister of Agriculture, Forestry and Fisheries proposed negotiations with trade unions on 12 November 2012, but this did not meet with a favorable response from the farmers.

The Department of Labour (DOL) then, on 15 November 2012, published its intention to re-look at the sectoral determination that applied in the agricultural sector at this stage, and try to establish a minimum wage. On 16 November 2012, it convened a meeting, together with Agri-SA and other employer organisations, to try to establish a co-ordinated delegation of ten people from the sector who would negotiate, and make a joint submission, before approaching the Minister.

The parties who  participated in the negotiation process were Agri-SA; the Agri-Sector Unity Forum; African Farmers Association of South Africa (AFASA); LWO Employers’ organisation; Agricultural Workers Empowerment Trade Union Council (AWETUC); Farm workers Dwellers Forum; Food Sovereignty Campaign; Women on Farms Project; Mawubye Land Rights; United Democratic Front; Food and Allied Workers Union (FAWU), the Congress of South African Trade Unions (COSATU); Cape Agriculture Employers Organisation and TAU-SA.

The first date for the negotiation process was 22 November 2012, under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA). Parties agreed that a full framework for conducting negotiations needed to be set in place. They agreed that challenges had to be categorised into short term, medium term and long term, in order to find appropriate resolutions. They also agreed that the matter was urgent, and that perhaps it might be necessary to look at possible solutions outside of the legislative framework, although the initial solution would be sought within the ambit of the Basic Conditions of Employment Act (BCEA) and Labour Relations Act (LRA).

DOL had tabled a list of the demands, and the parties agreed that:
- Issues around wages, and dismissals, needed to be considered
- A task team, consisting of two representatives from each organisation or grouping, would facilitate the process
- Priority must be given to facilitation and negotiation processes
- Unresolved disputes were to be directed to an institution with a legal mandate for resolution
- The Task team and the Bureau for Food and Agricultural Policy (BFAP) should provide an agricultural economic analysis and keep the parties updated on negotiations.

Regrettably the report from BFAP was not completed and this led to the breakdown of further negotiations, and further strikes by labour.  

On 4 January 2013, the Director General of DOL tried to get parties to resume negotiations under the auspices of the CCMA, and this was followed up on 7 and 8 January 2013, but the lack of mandate on the side of the employer parties meant that no negotiations in fact proceeded.

Alongside the attempts at a negotiation process, the DOL also began a process of public hearings to gain greater insight into the effects of agricultural sectoral determination process. This process was concluded on 18 December 2012 in all regions except for the Western Cape, where it had concluded on 20 January 2013. At the public hearings, 483 employer organisations and 1 145 employee or worker organisations, made a valuable contribution, but the latter persisted in the demand for a minimum wage of R150 per day.

After the public hearings, the BFAP report was finally forwarded to DOL by Agri-SA. This report noted that:
- A wage increase to R104, 98 per day would mean that the farmers would be unable to cover their operating costs, and would not be able to service their debt
- If there was a wage increase in the sector as requested, it would increase the total compensation value of the sector from the current R13.6 billion to R20.8 billion, a 53% increase
- At the level of farms, it would be impossible to absorb these costs, although most other industries might be able to absorb an increase of approximately R20 per day
- The BFAP report concluded that most farmers could just about manage to pay an average base wage of R84.90 per day
- The report also noted that even if workers were given a minimum wage of R150 per day, this would still not be adequate to make them food-secure.

The Employment Conditions Commission (ECC), when drafting its recommendations to the Minister, had taken the BCEA into consideration, as well as submissions from employers and employees when pegging its recommendations of R105 minimum wage. It had taken into account the ability of employers to continue to conduct business successfully, the impact of the increase on job creation and job retention, the impact of a minimum wage on poverty alleviation and the current cost of living. It had been told of the potential job losses that could result from the recommended increase, but decided to peg the wage at this amount and allow farmers who could not afford this the opportunity to apply for an exemption.

The ECC also recommended that DOL must undertake a impact assessment into the new wage on the sector. DOL would also forward the BFAP report to National Economic, Development and Labour Council (NEDLAC), so that it could consider how best to deal with the long term problems in the agricultural sector in South Africa.

Agri-SA later informed the DOL that farmers in the Limpopo and Mpumalanga provinces intended to retrench approximately 2 000 workers, despite the fact that the Minister and the DOL had told these farmers that they could apply for an exemption, should they qualify. This announcement also sparked an increase in applications for foreign labour which, over a two month period, resulted in a total of 6 487 work permits being allocated with 758 of these in the Western Cape, 2 360 in Limpopo and 3 369 in Mpumalanga.

The DOL had received enquiries from farmers from other provinces who required assistance in applying for exemptions. It would engage further with farmers in Limpopo and Mpumalanga to try to avoid negative impact on the workers, and see how the concerns could be accommodated. DOL had developed guidelines for farmers who wished to apply for an exemption, as well as a template to assist farmers who do not have audited financial statements.

Discussion
Mr A Williams (ANC) addressed the general lack of collective bargaining in the agricultural sector, and asked the DOL what measures it had taken to facilitate this.

Mr Thembinkosi Mkalipi, Chief Director, Department of Labour, agreed that collective bargaining in this sector was not nearly strong enough, and that had been the reason why the sectoral determination was used in the first place. There was poor organisation into unions, and he attributed this, in part, to lack of resources and the difficulty in meeting with workers who lived at huge distances from each other, making meetings impractical and costly for both organisers and workers. When it came to employers, about 90% were organised into employer organisations, and about 10% were either not organised or not effective. This was the reason why the attempts at the two-a-side bargaining collapsed because farmers claimed they had no mandate to put anything on the table, resulting in the workers’ strike. He said, however, that negotiations with NEDLAC were ongoing. The Minister of Agriculture must follow through with what she said she was going to do.

Mr Williams called for the rejection of the foreign work permits, which he felt would ultimately lead to retrenchments of local workers.

Mr S Motau (DA) also expressed concern about the retrenchment of South Africans in favour of foreign workers. This was a very serious matter that DOL would have to address, as he suggested that farmers retrenching on one hand and re-employing others immediately did not comply with fair labour practice.

Mr Kettledas reminded Members that the issuing of work permits was the responsibility of the Department of Home Affairs, not the Department of Labour, although the latter would be given some information.

Mr Mkalipi suggested that it would be useful for farmers intending to retrench to assist their former workers in finding new jobs, not only to ensure continuity of employment for the workers, but also so that farmers would save on severance pay. The balance sheets would ultimately determine who would be retrenched.

Mr Williams believed also that the DOL must deploy more labour inspectors to farms, to check whether farms were compliant with offering basic essential services for workers.

Mr Kettledas noted that the agricultural sector was very complex in nature and one of the consistent problems was that labour inspectors had difficulty getting access to properties, as often they would be faced with locked and barred gates. It would be in the interests of all parties if organisation of labour was promoted and there was proper compliance.

Mr Williams again noted the problems around collective bargaining and asked how DOL measured the strength of the 7% of the organisations that had a mandate to enter into discussion and negotiations, and how it attempted to further job creation.

Mr Williams asked DOL who exactly had recommended the R105 per day wage, and how it was calculated, as he believed the Agri-SA had made some proposals.  

Mr Mkalipi reminded Members that the farmer organisations said that they had no mandate to put anything on the table. Trade union density in the farming sector was at a very low 6%.

Mr A van der Westhuizen (DA) said that the protection of jobs was vital, but he was not at all surprised at the outcry and reaction to a 53% increase in wages. Fear was not a short term, but a long term emotion, and he said there could be still further reprisals, such as the agricultural sector deciding to mechanise and replace manual labour as much as possible.

Mr van der Westhuizen agreed that even the raise to R105 per day was still shockingly low. However, this must be considered against DOL’s previous interventions to assist farmers in remaining competitive. He referred to the cost of importing chickens and the cost of farming them locally, and noted that, overall, the cost of farming had risen too high. A holistic approach was needed for this sector, which was very vulnerable due to factors outside the farmers’ control, such as weather and the crop yields. He urged that government must invest heavily in rural infrastructure, which encompassed better support of schools, an roads as these impacted on wear and tear to the farmers’ working tools. The specific historic hardships in this sector needed assistance and intervention also from other government departments. He believed that exemptions were not the ideal route, and a holistic approach was necessary.

Mr F Maserumule (ANC) agreed that a holistic and in-depth transformation would be needed. He commented that he was yet to be persuaded that DOL could, given its long and painful history, deliver on the interventions it promised.

The Chairperson also questioned whether farm workers were actually earning a livable wage and said that the strikes must be put into context. Workers would not simply wake up one morning and decide upon, or be goaded into agitation, as they would generally be reluctant to risk their jobs and lives. It must be recognised that they simply could not survive on their income. Farmers and workers needed each other, and generally were quite close, so that strife was indicative of a real problem, and it was clear that the imbalances in this relationship must be addressed. He hastened to add that not all farmers were bad and he knew of many who paid above average wages.   

Mr D Kganare (COPE) questioned the determination of market value in relation to wages in the agricultural sector. He agreed that it was necessary to question whether farming in South Africa was profitable. Once it was agreed that it was, then a general wage could be set. If it was proven that the farming sector was not profitable, then there needed to be further negotiation on wages. He thought the three-year sectoral determination resulted from reactive, rather than proactive steps. He cited an example of sugar farms in KwaZulu Natal, and what would happen if workers there were to demand a R200 daily wage.

Mr Kganare said that several issues affected the stability of the sector. There was a further point that DOL had to be trusted in respect of its utterances on work permits and efficient handling of retrenchments. Each case must be judged on its own merits, as several farms may be owned by consortiums, not individuals.

The Chairperson also spoke to exemptions, noting the need for transparency on the side of employers, and stressing that any exemptions granted must be against valid grounds only. He asked if workers played a role, and whether the exemptions followed a consultative process. However, he also noted that challenges around consulting with farm workers included the fact that the majority of them were illiterate, so may not well be able to conceptualise the practical effect of something like a 0.7% decrease in wages.

The Chairperson also enquired as whether the farmers knew of Productivity SA, which attempted to assist farmers become more productive. The National Empowerment Fund (NEF) and the Jobs Fund were other examples of institutions who did have funding that farmers could access. He pointed out that Agri-SA needed to engage in proper communication with the farmers.

Mr van der Westhuizen also requested that the DOL provide time frames for the exemption process, commenting that delays that were experienced by employers with the Bargaining Council were undesirable.

Mr Kettledas explained that many delays in the applications for exemptions were due to the forms not being filled out correctly and comprehensively. If this was corrected, the processing was much faster. ,

Mr Mkalipi added that the exemption process required transparency from both the farmers and the workers. The assessment should not be confined to a one year period but should rather investigate a period of at least five years, which would give a far better indication of profitability; for instance, the previous year might have been the worst that the farmer had yet encountered after four years of good profits. He added, however, that he agreed with the Chairpersons’ comments on the difficulties where workers were illiterate and added that most were unable to be able to understand the balance sheets on first reading, but could comprehend the realities when these were explained in layman’s terms.

The Chairperson noted that the migratory lives of the farm workers, born out of the apartheid era, needed to be addressed, as the impact it had on farmers and workers alike must be investigated. He agreed with other Members that a unified and cooperative stance was needed to find solutions to the problems.

Mr Mkalipi commented, in general, that there was a need to spend money on research that would determine the best possible approach to assist the agricultural sector. It was possible to delegate this task to the trade unions. Further to that, substantial funding would be required to organise the agricultural sector. Whilst it did require solidarity, it also, and more importantly, needed more resources. This was natural given the nature that farms were widespread and not easily accessible.

The Chairperson said that the farmers were ultimately interested in food production, and that the DOL needed to assist them in their compliance issues, which could only be achieved by actually visiting the farms. He hoped that the DOL would be strict about issuing fines for non compliance would be issued. He commented that the negative labour reports would weaken South Africa’s international image, and the country needed to do everything in its power to reverse that poor image. Competition was rife. South Africa also had to be seen as a country that was competitive, yet also had a good human rights record. He concluded that it would be beneficial for all affected bodies to do damage control, to work together, and be seen as a powerful global player.

The meeting was adjourned.

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