Decent Work; Cooperatives: Department of Labour involvement in their support

NCOP Public Enterprises and Communication

28 May 2013
Chairperson: Ms M Themba (ANC, Mpumalanga)
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Meeting Summary

The Department of Labour said the concept of decent work was based on understanding that work was not only a source of income, but a source of dignity, family stability, and economic growth. The International Labour Organisation Decent Work Agenda was implemented through the Decent Work Country Programmes (DWCP) which promoted decent work as a key component of national development strategies. The Minister launched South Africa’s DWCP (2010-2014) in September 2010. It was to be housed in NEDLAC, coordinated by the Department and supported by the ILO Pretoria Office. A DWCP matrix was developed by the Department which had four priorities and eight outcomes. The SA DWCP had four priorities: strengthening fundamental principles and rights at work; employment promotion; strengthening and broadening social protection and tripartism and social dialogue. The Committee was given a comprehensive overview of each of the four priorities, together with their respective outcomes and outputs.

The Department’s support to cooperatives until 2009 had been through the Umsobomvu Youth Fund (which had since been transferred to the Presidency) and through the Skills Development Sector Education and Training Authorities and the National Skills Fund that were transferred to the Department of Higher Education and Training. The Department of Trade and Industry (DTI) was the custodian of the Cooperatives Act. There was a different labour dispensation for cooperatives as it was excluded from the Basic Conditions of Employment Act. The Department of Labour was involved in DTI policy review initiatives and doing research on cooperatives. The Department was also part of discussions that culminated in the amendments to the current Cooperatives Act. The Cooperatives Amendment Bill had been through Parliament and would soon be signed into law. Cooperatives had a proven record of creating and sustaining employment - they provide over 100 million jobs worldwide. In South Africa's case, cooperatives could contribute towards poverty reduction and create employment. The briefing also looked at the different types of cooperatives and spoke about employment counselling on cooperatives and DoL's future interventions on cooperatives.

Members appreciated the informative nature of the briefing. However people at grassroots level also needed to be informed on both the concepts of decent work and cooperatives. Education was key. The problem with cooperatives in South Africa especially in the informal sector was that people lacked the know-how about how to manage and run the cooperative. As a result once all the start-up capital was depleted the cooperative collapsed. Given the situation, the previous owners of the place would come on board to manage the cooperative on behalf of the workers and take advantage of them.

The concept of decent work was in principle good but members were interested to know how the Department of Labour ensured that employers took heed of what constituted decent work. Concerns were also raised over the prevalence of seasonal foreign workers and labour brokers in South Africa. Did labour brokers heed the concept of decent work? There had been a gap in labour legislation about labour brokers but the gap was being closed by the introduction of legislative amendments.
 

Meeting report

Department of Labour (DoL) presentation
The Department of Labour delegation comprised of Mr Sam Morotoba, Deputy Director General: Public Employment Services, Mr Les Kettledas Deputy Director General: Labour, Policy and Industrial Relations and Mr Ian Macun, Director: Collective Bargaining. Mr Kettledas apologised for the Director General’s absence as the Director General was tied up elsewhere.

Decent Work
Mr Ian Macun, Director: Collective Bargaining, elaborated on what the decent work agenda was. Since 1999, the promotion of decent work has been a main objective of the International Labour Organisation (ILO). The concept of decent work was based on understanding that work was not only a source of income, but a source of dignity, family stability, economic growth etc. The decent work agenda in South Africa was captured in the ANC 2009 Election Manifesto, “creation of decent work and sustainable livelihoods”. It was also mentioned in the inaugural State of the Nation Address by President Zuma in June 2009. Decent work was echoed in the New Growth Path. Labour law amendments were made to make provision for the concept of decent work.

The ILO Decent Work Agenda was implemented through its Decent Work Country Programmes (DWCP).There were twenty DWCPs in Africa which promoted decent work as a key component of national development strategies. The Minister launched the South Africa’s DWCP (2010-2014) in September 2010. It was housed in NEDLAC, coordinated by the Department and supported by the ILO Pretoria Office. A DWCP matrix was developed by the Department which had four priorities and eight outcomes. Priorities were: strengthening fundamental principles and rights at work; employment promotion; strengthening and broadening social protection and lastly tripartism and social dialogue. The Committee was given a comprehensive overview of each of the four priorities, together with their respective outcomes and outputs.

Mr Macun continued with a breakdown of figures in monitoring progress in achieving decent work in South Africa. In relation to employment opportunities, unemployment figures sat at 25.2% and informal employment sat at 30%. On adequate earnings and productive work, 34% of non-agricultural workers earned less than two thirds of median monthly earnings. With reference to decent work, 24% of workers worked more than 48 hours per week. When combining both work, family and personal life, the figures showed that women were responsible for 57% of hours spent on work. With specific reference to work that should be abolished, approximately 10% of those aged 10-17 years of age were vulnerable in one of the indicators. On stability and security of work, 12% of employees were on limited duration contracts and 22% were on contracts of unspecified duration. Regarding equal opportunity and treatment, 14% of African men and 6% of African women were in top management positions. The gender wage gap however sat at 30%. There was a struggle with the availability of assessment and Compensation of Occupational and Injuries Diseases Act (COIDA) statistics. On social security, 46% of Employee Assistance Programmes (EAP) had pension contributions and 32% of employees were entitled to medical aid benefits. With regards to social dialogue and representation, trade union density sat at 30% and collective bargaining coverage was 32.7%.

Department of Labour involvement in cooperatives support
Mr Sam Morotoba, Deputy Director General: Public Employment Services, said the Department’s support to cooperatives until 2009 had been through the Umsobomvu Youth Fund (which had since been transferred to the Presidency) and through the Skills Development Sector Education and Training Authorities and the National Skills Fund that were transferred to the Department of Higher Education and Training. The Department of Trade and Industry (DTI) was the custodian of the Cooperatives Act. DoL was however involved in DTI's policy review initiatives and in doing research on cooperatives. The Department was also part of discussions that culminated in the amendments to the current Cooperatives Act. The Cooperatives Amendment Bill had been through Parliament and would soon be signed into law.

Cooperatives had a proven record of creating and sustaining employment - they provide over 100 million jobs at present throughout the world. In South Africa's case cooperatives could contribute towards poverty reduction and create employment. DoL explained the different types of cooperatives worldwide. In South Africa there was a worker owned cooperative where the workers were the owners and made all decisions.

Mr Morotoba said that worker cooperatives could contribute towards the economy at both a macro and micro level. There was however both internal and external constraints linked to social relations. The approach to dealing with challenges was: understanding cooperatives on a case by case basis; conditions for regeneration should be looked via ongoing education; there should be conscious strategic action and a commitment to democratic decision making. The DoL Research Unit had recommended to the Department’s Public Employment Services Branch that career counsellors at labour centres should be able to explain to the public what cooperatives were. Employment counselling could further entail providing information on the types of products and services that a cooperative could provide. It could also providing information to work seekers on where to obtain additional information and assistance on cooperatives.

The Department’s future interventions on cooperatives included:
▪ improving networks and partnerships with a series of funding and training organisations involved in cooperatives;
▪ find best ways of implementing DoL research outcomes on cooperatives;
▪ pilot cooperative concepts in some of the employment schemes.

Discussion
Mr Z Mlenzana (COPE, Eastern Cape) said that the briefing was more of an educational nature. Referring to the avoidance of degeneration of cooperatives, he noted that the ILO definition of a cooperative was loaded. When linking the definition with the slide on “employment counselling on cooperatives”, reference was being made to a group of persons ready to form a cooperative. Degeneration of cooperatives in South Africa was because cooperatives could not grow on their own. This was because people do not understand each other. For example young persons leaving school form a cooperative but later realise that they come from different backgrounds and hence do not see eye to eye. After the start up capital is depleted, the cooperative disintegrates. Was there a way for the Department to check on whether there was unity amongst persons who wished to form a cooperative? A one-page questionnaire would suffice.

Mr Morotoba responded about assessing levels of commitment amongst members of cooperatives, saying there were some issues that the Department had struggled with for the period 2005-2007 before there was a framework for the establishment of cooperatives. The difficulty was that whilst the system was reaching its maturity, the Department was liaising with the Department of Higher Education and Training to get a sense of the type of education that was needed. The reality was that the Department no longer had the vehicle and capacity that had previously been there in the form of the Umsobomvu Youth Fund.

Mr M Jacobs (ANC, Free State) referred to the concept of decent jobs and said that it was difficult to simply get a job in South Africa. He asked if the Department's inspections covered people who had informal businesses as well to check if they met the standards of decent jobs. Were there any punitive or corrective measures in place? It would have been useful for the Committee to have visited countries which had cooperatives. Cooperatives in the informal business sector tended to collapse after a while. The DoL may offer counselling and assistance but the reality was that in the South African environment there were always people looking for kickbacks. How could people be assisted? It was evident that jobs in South Africa were not being created fast enough and hence people had to create their own jobs.

Mr Macun said that decent work as a whole was not something one could point towards. Creating more decent and productive work was an ongoing process.

Mr R Tau (ANC, Northern Cape) pointed out that there was a time in South Africa when cooperatives were taboo. Only after 2009 were cooperatives encouraged. What was disappointing to him was the time it took to get where cooperatives now were. The part of the definition of cooperatives which read, “social and cultural issues” was very important. Cooperatives had an ideological posture. Economic-social cohesion was underpinned by ideological principles. Education was central to the establishment of cooperatives. He asked what the breakdown of cooperatives in provinces was and what the different forms were. He had the duty to workshop cooperatives in his constituency but he needed to know where they were and whether they were still functional. He felt that cooperatives could not belong to a specific government department but that they were overlapping. How did provinces work towards coordination? His experience was that people were not properly informed about cooperatives. Given people's lack of knowledge, they were taken advantage of by others.

Mr Morotoba said that the Cooperatives Act provided for its own labour dispensation under the DTI as the Basic Conditions of Employment Act did not apply to cooperatives. The DoL did engage with DTI. Cooperatives could have unintended consequences. Many owners registered their businesses as cooperatives when in actual fact they were not. The Cooperatives Act sat with DTI. Data seemed to indicate unemployment figures to be 1.5 million. The DoL did target unemployed persons but there were challenges. The DoL tried its best to get unemployed persons to get registered. There were four labour bills before Parliament that were still in the National Assembly. The DoL had consulted with provinces. A list of cooperatives per provinces would be obtained from DTI and forwarded to the Committee.

The Chairperson said that information on cooperatives per province should also show what progress had been made by cooperatives in the provinces.

Mr Groenewald said that in many instances where persons were given farms by government in the form of a cooperative with ten or more people and when the start-up capital was depleted they fight amongst each other and run back to government for assistance. He asked what role the DoL played in national economic development. With regards to the National Development Plan, people needed to be helped and trained.

Mr M Sibande (ANC, Mpumalanga) said that in order to have a profile of a country, data on employment in South Africa was needed. Did the information available allow the DoL to comply with the concept of decent work? His concern was that government officials were not monitoring cooperatives projects. In order to reach goals, systems needed to be coordinated. What was the relationship between the Expanded Public Works Programme (EPWP) and cooperatives? It was all good and well to have good initiatives but guidance was needed on how to make micro businesses able to sustain themselves. If people were not educated and trained on cooperatives, then the previous owners were hired to manage or mentor the cooperative and in so doing most of the benefits did not accrue to workers. Changing the subject, he pointed out that in provinces like Mpumalanga, a great deal of seasonal workers was used. The problem was that many of the seasonable labourers came from outside South Africa. What was the DoL doing about this? Labour brokers were another concern. How many labour brokers were in South Africa? South Africa had signed many conventions in terms of the ILO. Did South Africa comply with conventions?

Mr Kettledas replied that the DoL did have unemployment figures. The figures were per quarter and for the first quarter of 2013 the figures were: Limpopo 20.3%; Kwazulu Natal 31.1%; Western Cape 23.3%; Gauteng 25.2%; North West 20.5%; Mpumalanga 29.4%; Northern Cape 29.6%; Eastern Cape 30.2% and Free State 31.6%. The national figure sat at 25.2%. The figures could further be broken down per gender and education etc.

In terms of conventions that Parliament had recently ratified, South Africa first looked at whether it could comply with conventions before it ratified them. The DoL did report to the ILO on these and the ILO Committee of Experts had not said that South Africa was out of sync with conventions. South Africa recently ratified Conventions 100 and 111. Generally South Africa was complying with conventions. For 2013, five conventions were to be done.

On the issue of foreign labour, where an employer wished to use foreign labour he had to apply for work permits. The criterion was that if the labour in question was available in South Africa then the work permit would be denied. Permits were granted with conditions. In terms of conditions of employment, both local and foreign workers were paid the same wage.

The issue of labour brokers was before Parliament at present. When the Bill came before the Committee, then data on the number of labour brokers in South Africa would be available.

Mr Morotoba replied on the EPWP, saying that normally opportunities for employment were registered with the DoL. The DoL did refer people to the EPWP, the Department of Rural Development and the South African National Defence Force. The point regarding micro and macro businesses was to say that there were micro benefits for cooperatives as well as certain lower level benefits. Hence there were micro and macro level benefits.

The DoL did register private employment agencies. There were requirements that labour brokers needed to be registered.

He noted that currently the DoL was only able to offer assistance by providing information on cooperatives, since cooperatives sat with DTI. There was however plans for pilot projects. The issue was about how to assist cooperatives. The DTI undertook the registration of and education on cooperatives.

Mr Tau said that there was a great deal of debate on labour brokers. Did the DoL believe that labour brokers complied with the definition of what entailed decent work.

Mr Macun said that many labour brokers did not provide work that conforms to decent work. Hence the call for amendment of legislation. Currently there was a gap in South Africa’s labour legislation and for this reason the amendments were critical.

Mr Jacobs asked whether people understood what cooperatives were.

The Chairperson felt that the contribution towards work was much more than the 57% figure provided by the DoL. Men did not understand the extent of womens’ work both at home and the workplace. Women impact hugely on work. Members, especially male members, needed to be workshopped on the issue. She asked whether the DoL had a mechanism with which to inform people at local government level and rural areas about international agreements and reports that had come out of conferences. The DoL needed to address challenges facing the DoL’s Inspectorate Service because it was vital that decent work be ensured. She referred to the monitoring and evaluation of decent work and asked if timeframes and targets had been set. She asked whether the DoL had a list of businesses like craft sellers and whether the DoL assisted them. The DoL was requested to provide the Country Profile Draft to the Committee. She also asked for a list of cooperatives per province.

Mr Macun stated that he would forward the Country Profile Draft to the Committee. He explained that it was difficult for the DoL to support and assist businesses. The Decent Work Country Profile gave the DoL the opportunity to work better with other government department. The ILO did have a project to assist DTI with informal business development.

The DoL was discussing the option of a memorandum of understanding between the DoL’s Inspectorate and the DTI on cooperatives. The issue was about cooperatives complying with contributions towards the Unemployment Insurance Fund and the Compensation for Occupational Injuries and Diseases Act.

The DoL’s mandate was not to support businesses but rather individuals.

The meeting was adjourned.
 

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