National Minimum Wage: input by Chamber of Mines

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Employment and Labour

19 September 2014
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

The Chamber of Mines, an employer organization representing about 90% of the mining production in South Africa, said that it appreciates the value of the national minimum wage (NMW) as one of a range of mechanisms to address inequality. Nevertheless, a NMW across all industries might not be appropriate as it will not take into consideration realities within different industries such as skills level required, geographic spread, labour intensiveness, size of business and economic reasons. A NMW without distinction between different sectors in the same industry might also be inappropriate. A NMW was likely to have a knock on effect on higher job categories. It must be pegged in a manner that it does not threaten jobs, undermine sustainability and competitiveness of business, leading to informalisation. A NMW was difficult to implement in the informal sector and the government must not make laws that make a mockery of itself. When a NMW was implemented what was going to happen to minimum wages determined through voluntary collective bargaining or sectoral determinations made by the Minister of Labour for vulnerable sectors? COM concluded that the NMW was a complex issue and in putting of South Africa first and finding ways of addressing inequality, it must be explored collectively by stakeholders. The COM looks forward to participating in the Deputy President’s Labour Indaba in November 2014 where the NMW will be debated.

The trade unionists present were disappointed that the “captains of capital” did not have a position on national minimum wage yet. The Chamber of Mines explained that it had no authority to drive anything without a mandate from its members and its Council had not reached a decision on this yet. The COM.  Members asked the COM to explain the progress it has made in the implementation of the Mining Charter, which was considered critical in the upliftment of the conditions of workers. The Chairperson felt that COM did not take the debate seriously if it had not reached a decision on this yet. The Committee said it may invite COM again to present its position on national minimum wage, which must also include the progress made in the implementation of the Mining Charter.
 

Meeting report

Chamber of Mines (COM) Submission on National Minimum Wage
Mr Bheki Sibiya, Chamber of Mines CEO, apologised for being late, stating that he had been lost in the precincts of Parliament. He was accompanied by Dr Elize Strydom, Senior Executive: Employee Relations, COM, and she made the presentation. She explained that the COM is an employer organization whose key functions were advocacy and lobbying in respect to the collective interests of its members. It renders wage negotiations for gold and coal members. It had 72 members in coal, diamond, chrome, gold, iron ore, platinum mining, financial corporations and other members in cement production and brick production. It represents about 90% of the mining production in South Africa.  

Dr Strydom spoke about wage negotiations in the gold industry. In the gold industry, central negotiations were under the auspices of COM covering about 90% employees. The access to negotiations by trade unions was not determined by representivity. Four trade unions NUM, AMCU, UASA and Solidarity with different members had entered into a two year wage agreement with COM. Wages in the platinum sector were negotiated at company level and the strikes in this sector were also at company level. However, after Marikana, it had been trying to centralise negotiations.

COM had consistently increased entry level wages above inflation to close the wage gap. It made a provision that contractors hired by some of its members must offer their employees’ wages and employment conditions similar to those offered by mines to their employees including medical aid and retirement provident funds. The mineworkers’ provident fund was established following the 1987 gold strike and the employer contributes 15% and employee 8% - higher than any other employer. It offers free medical aid to its members. Alternatively, it provides medical aid share contribution of 50:50 with the employee that covers the spouse and children. The company makes a 60% contribution for first time members. It had introduced a Living Out Allowance for workers who do not stay in hostels - but this had unintended consequences as workers use it to augment their income rather than choose proper housing; hence the sprouting of informal settlements around mining areas. It was working on transforming the migrant labour system and employee indebtedness - which was a very serious problem in the mining industry. The current guaranteed pay in the gold industry was R5 787 for entry level employees, R7 424 for rock drill operators and R9 102 for category eight employees. It was working hard to reduce fatalities in the mining industry

The COM appreciates the value of the national minimum wage (NMW) as a way to address income inequality. It defines a NMW as one of range of mechanisms to address inequality. Nevertheless, a NMW across all industries might not be appropriate as it will not take into consideration realities within different industries such as skills level required, geographic spread, labour intensiveness, size of business and economic reasons. A NMW without distinction between different sectors in the same industry might also be inappropriate. A NMW was likely to have a knock on effect on higher job categories. It must be pegged in a manner that it does not threaten jobs, undermine sustainability and competitiveness of business, leading to informalisation. A NMW was difficult to implement in the informal sector and the government must not make laws that make a mockery of itself. When a NMW was implemented what was going to happen to minimum wages determined through voluntary collective bargaining and sectoral determinations made by the Minister of Labour for vulnerable sectors? COM concluded that the NMW was a complex issue and in putting South Africa first and finding ways of addressing inequality, it must be explored collectively by stakeholders. The COM looks forward to participating in the Deputy President’s Labour Indaba in November 2014 where the NMW will be debated.

Discussion
Mr Llowellyn Domingo, General Secretary: National Certificated Fishing and Allied Workers Union (NACFAWU), said the COM presentation did not speak anything about the NMW across various workers in South Africa. He asked COM’s position on NMW to be clarified.

Mr Neil Coleman, Strategies Coordinator, Confederation of South African Trade Unions (COSATU), said the COM showed the benefits and progression of centralised bargaining and the opposite of this had been shown in the platinum sector. During the 1987 gold strike, the then Secretary General of COSATU was arrested at gun point. The NMW was not trying to deal with specificities in various industries. The International Labour Organisation (ILO) publication titled National Minimum Wage systems shows how the NMW was applied in different countries in the world. The NMW is a floor and no employee across the regions and industries in South Africa will earn below it. Above the NMW there will be sectoral negotiations. Even conservative economists point out the benefits of the NMW in various publications. It would be great for COM to present its statistics of wages from the last decade so that the progression of wages could be clearly seen. Stats SA gave statistics that the median wage in the mining sector was below R6 000. The average wage was around R15 000 and the huge gap between the median wage and the average wage was an issue of concern. One issue commonly raised was the relationship between wage levels and employment. The job losses in the agriculture sector had been used by the enemies of decent living working conditions for workers. The job losses in the agricultural sector were caused by a complex web of factors not related to the NMW such as investments, economic market conditions and other sectoral conditions. Anyone who makes an argument that the NMW will lead to job losses will be making a simplistic argument.

Ms S Van Schalkwyk (ANC) said COM was not clear on the NMW. It was not clear whether it will only present its position at the Labour Indaba in November. She sought clarity on the statistics on employment trends in the mining industry over the past decade in the mining industry as wages increased.

Mr Guffy Ngalo, Regional Organiser, BWAWUSA, had worked for three decades in mining. He was happy that fatalities have dropped. The wage for rock drill operators was peanuts. It will be good to regulate the mining sector before the November Indaba. People working in the mining industries were living like dogs. When he grew up, musicians were already singing about the appalling conditions of mine workers which continue today.

Ms F Loliwe (ANC) said it was frustrating that a person who arrived late was not apologetic and lies that he was lost in the precincts of parliament. The COM presentation focussed more on bargaining than the minimum wage issue. She asked if unions with 2% had equal presentation on wage negotiations. She asked when the minimum wages had started and under what conditions. She welcomed the decrease in fatalities - but the work should be geared towards zero fatalities.

Ms P Mantashe (ANC) said although COM was part of the negotiations for the Mining Charter, it had not implemented it. The Committee had only listened to people who were anti NMW. She asked COM to indicate what an acceptable NMW will be. The goal of the Committee was to hear advice from various stakeholders on the guidelines for an acceptable minimum wage.

Mr Eric Nyekemba, Parliamentary Liaison Officer, Office of the Minister of Labour, said the Deputy President mentioned at the 19th NEDLAC Summit on 5 September that social partners were expected to present their position on the NMW at the National Labour Relations Indaba on 4 November. The questions that COM raised such as sectoral determinations and collective bargaining which are in the Labour Relations Act were a product of the democratic government. The government had seen long ago that there should be a NMW. It was important to recognise that trade unions had fought for this. The Deputy President indicated that resources will be channelled towards a better life for all to address inequality, poverty and unemployment. It was important for COM to indicate its thoughts on a NMW moving forward to 04 November. At the Labour Indaba not only minimum wages will be discussed, but also other issue such as violent strikes.

Mr P Moteka (EFF) said the COM represents 90% of mines in South Africa, but its presentation focussed on the gold industry only. He asked why the COM employs contractors. He met 8 000 people in Queenstown and 10 000 in King William’s Town who were old and every sick, still fighting for their benefits from their service to the mines. He asked why COM allows the platinum sector to decide wages on its own. The NMW was not going to be a substitution for the sectoral determination. The NMW was going to be a drawn line below which no South Africa earns. COM presentation had nothing to offer. No miner will earn below R12 500 – that was the view from where he came.

The Chairperson said Mr Moteka was out of order as he was supposed to speak as an MP not as a member of EFF.

Mr Piet du Plooy, General Secretary, Confederation of South African Workers Union (CONSAWU), said the NMW was a one size fits all. The presentation from COM was a perpetuation of the laissez faire economic system. In a developing country like SA, the government was involved in the market system. A NMW was an example of intervention by the government in the market. The free market economy drives wages down. Allowing a free market economy was wrong. Wages had been increasing over the years and the government must intervene in the economy.

Mr M Plouamma (AGANG) said the presentation from COM “was nice as if there was no Marikana”. It was important for COM to state the profits of its members. He asked COM to explain its skills development strategy. He asked COM to explain if its members who negotiate wages on their own, act in the spirit of South Africa.

Mr Omar Parker, Provincial Coordinator, National Union of Public Service and Allied Workers (NUPSAW), said COM had presented what had happened as if people do not know what transpired in the mining industry. COM needs to apply itself to the realities of the whole of South Africa rather than focussing within its own parameters.

Mr George Warrington, Branch Official: Federation of Union in South Africa (FEDUSA), said mine workers work in high risk environments, susceptible to lung infections and a lower life expectancy of around 50 years. There must be a NMW for high risk jobs.

Mr Sibiya replied that COM had received the invitation on 09 September. The COM Council had not yet sat to decide on the NMW. The COM was employed by members, it did not dictate to members, but its terms were dictated to COM. The COM had no authority to drive anything without a mandate from its members.

The Chairperson asked if COM was not part of decision makers.

Mr Sibiya replied that the COM Council consists of 24 members with four office bearers. Decisions were taken as a collective in the Council. The Council had not yet decided. The presentation was as a result of he and Dr Strydom honouring the invitation from Parliament. He cannot speak of profits of members. He cannot dictate a position before Council had met.

Dr Strydom said COM was not ready but it took the discussion seriously. The comments from Mr Coleman were useful and would be taken on board. She was worried about statistics from Stats SA. Perhaps the problem was as a result of garnishee orders on workers’ payslips. Workers were willing to borrow at high interest rates. COM was offering financial illiteracy to workers to deal well with their finances. The migrant labour system was being addressed. She had been attending meetings to address this with the trade unions, and the Ministers of Labour and Mineral Resources. Research commissioned on the migrant labour system will be out at the end of November. She took their comments seriously and COM would be ready by November.

Mr Coleman said employment in the mining sector was 354 000, it dropped to 327 000 in 2010 and rose again to 411 000 in 2013. The increase in jobs happened at the same time there were increases in wages. The decrease in jobs can be attributed to the global financial crisis. Inequalities in wages were higher in the mining sector as the salaries of the management were very high in the mining sectors. Bobby Godsell said no employer should agree to implement a garnishee order and court-ordered deductions should be banned. If employers were worried about garnishee orders, it should take the issue to the Constitutional Court. It was dehumanising to say indebtedness was the result of a lack of financial literacy. The COM must look into the ILO publication, Minimum Wage Systems. The national minimum wage was easy to implement. Task teams will be established ahead of the Labour Indaba in November and it was surprising that COM did not have a position yet.

Mr Domingo said the COM presentation noted that the NMW was one of the mechanisms to address inequality without mentioning what other mechanisms could be used to address inequality. He asked if COM was in agreement with Business Unity of South Africa (BUSA) that it was a mistake to implement a minimum wage for agricultural workers.

Mr Nyekemba said the announcement of the Indaba on NMW was not the first time such announcement was made. COM has not met the deadline for the Mining Charter. The experience of COM in the mining industry was such that there was no need to remind it about the Mining Charter as it deals with addressing the living conditions of workers. There was no indication from COM that would leave the Committee with hope.

The Chairperson said there was no need to remind everyone that there was a need for an NMW. Profits determined by mining companies will determine what was possible. Even if the COM Council had not met, COM must indicate the factors that cannot be ignored and must be taken into consideration. COM must not give the impression that it was dodging the main question.

Mr Sibiya said BUSA does not have a mandate from COM on a minimum wage

The Chairperson said BUSA, like COM, was not prepared. The Committee was unimpressed  - they were fumbling, they had no view.

Mr Sibiya said he felt “steamrolled” as he was not given the proper requirements as to what was going to be discussed with the Committee. COM had shared their thoughts on the NMW which he had indicated was not mandated by their members. He noted the information from Mr Coleman's analysis, although he was worried that Mr Coleman might join the ‘voodoo economics’ he was quoting from - as it requires depth and detail in terms of discussion. Dr Strydom had covered what they had been doing around garnishee orders which was not a simple issue. And therefore for Bobby Godsell to say "to not honour them", the COM would not break the law on this. He pointed out that garnishee orders started when Bobby Godsell was the CEO of COM so he was surprised at his statement but his opinion was his opinion.  Regarding contractors, this was an unfortunate development. Sometimes the mines have to increase their output and sometimes they need to reduce it. The contractors was a tool that provided some flexibility within the Labour Relations Act to address increased or decreased output. This was a free enterprise system with an appropriate conscience. Work was being done on the Mining Charter ahead of the 31 December 2014 deadline. There is work being done within all the pillars of the charter. It was untrue that the Mining Charter was not being implemented when there were black-owned (not empowered) companies such as Africa Rainbow Minerals. COM does not have power to talk to CEO salaries as they were determined by boards of companies. The chairpersons of the boards must come to account before the Committee about the CEO salaries.

The Chairperson asked COM to explain what had been done and not done this far with the implementation of the Mining Charter.

Mr Sibiya said he was prepared to come and make a through, detailed and comprehensive presentation on the Mining Charter. On the NMW, he was sure that progress was being made.

The Chairperson said some presenting organisations had come with the view that Members will not interrogate what they say. Things in the Mining Charter such as housing and health were critical in addressing the conditions of the workers. The NMW was not in isolation of the Mining Charter. The discussion on the Mining Charter was not out of order. The feeling was that Mr Sibiya was not taking the Committee seriously. When speaking about the NMW to employers, there was no need to school them.

Mr Plouamma did not understand why Mr Sibiya was defensive. The Committee was working for the justice of many South Africans. Mr Sibiya had the energy but his tongue became muzzled when asked about profits. He urged Mr Sibiya to retract the word ‘steamrolled’.

Mr Moteka said Members represent the public while trade unions represent the suffering workers. He asked COM to update the Committee on the progress made with the implementation of the Mining Charter.

Ms Loliwe said she felt disturbed when patronised. Mr Sibiya looked like he had the energy more than anyone else. He asked COM if the Committee should take the COM presentation as its position on NMW.

Dr Strydom there were no more rock drill operators in the coal industry, only in gold mines. The increase in jobs from 2010-2013 was as a result of an increase in jobs in the platinum sector. Gold mining jobs had been declining. It was true that there were significant contractors in the platinum sector with rock drill operators earning different wages. In gold mining, contractors were used to do certain specialised tasks. The mining industry was the best paying labour intensive industry, more so than civil engineering, retail and construction, and with less skilled employees.

The Chairperson asked the COM to explain in detail what it did not understand from the invitation from Parliament.

Mr Sibiya read the invitation without noting anywhere where he did not understand. He withdrew the word ‘steamrolled’.

The Chairperson said anyone who does not understand, had the responsibility to ask. The Committee may call COM again to present its position on the minimum wage.

The meeting was adjourned
 

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