Workshop: focus on core operations and functions of Bargaining Council

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Employment and Labour

13 February 2021
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

The Committee was convened in a virtual meeting to receive a briefing from the Department of Labour and Employment on the core operations and functions of the Bargaining Council. The main objective was to explain the concept of collective bargaining, as well as to provide Members with an overview of the sectoral determinations in the different sectors.

During the discussion, Members enquired about the impact of the recent public sector wage saga on collective bargaining, the potentially negative impact of job losses from collective bargaining, the corruption among labour unions and measures in place to hold corrupt union officials accountable, as well as the plight of domestic and farm workers who faced harsh working conditions and exploitation by their employers.

Meeting report

Collective bargaining and sectoral determinations

Mr Thobile Lamati, Director-General, Department of Employment and Labour (DEL), introduced the Department’s delegation.

Mr Virgil Seafield, Deputy Director-General: Labour Policy and Industrial Relations, DEL, stressed the importance of collective bargaining. The Constitution of the Republic protected the right of every trade union, employers' organisation and employer to engage in collective bargaining. The country had ratified the International Labour Organisation (ILO) convention on the Right to Organise and Collective Bargain, Convention, 1949 (No,98). It was therefore not a unique South African right, but was universally accepted. It was also embedded in the Labour Relations Act, as well as other legislation.

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, DEL, explained that collective bargaining helped to determine wages, terms and conditions of employment and other matters of mutual interest; and to formulate industrial policy.

He explained the levels of collective bargaining and provided examples to Members.

For the past five years, the Department had extended more than 100 collective agreements to non-parties covering 2 229 269 employees. During Covid-19, some bargaining councils had concluded collective agreements on occupational health and safety measures – the Clothing Bargaining Council; Textile Bargaining Council; Electrical Bargaining Council; and South African Road Passenger Bargaining Council.

Most of the bargaining councils were accredited to conduct dispute resolution, and performed a dispute resolution function akin to the Commission for Conciliation, Mediation and Arbitration (CCMA), which was critical for industrial peace. They enforced collective agreements by bargaining councils within their sectors, and by doing so they improved the standard of living, the conditions of service and extend social security benefits to vulnerable workers.

Mr Mkhalipi outlined the challenges faced by collective bargaining, and the Department’s to address these challenges.

(See attached presentation document)

Sectoral determinations were explained to Members. A sectoral determination referred to the following working time issues:

  • Hours of work and overtime;
  • Payment for overtime and night work;
  • Standby, meal intervals and rest periods;
  • Payment for work on Sundays and public holidays.

The different sectoral determinations were provided to the Committee.

(See attached presentation document)

Discussion

Dr M Cardo (DA) agreed with the presenters’ view on the importance of collective bargaining. However, he pointed out that collective bargaining did not work if there was no party that negotiated and made agreements in good faith. Using the recent public sector wage event as an example, in which the government managed to get a waiver for a third year wage increase from that agreement, many labour experts had criticised government’s approach and said that the state had benefited from the collective bargaining agreement, but with no obligations attached to the state. For many workers in the public sector, it felt almost as if the agreement was imposed on them, with no other alternative options. He asked what repercussions this event would have on future collective bargaining in South Africa.

Dr Cardo expressed his concern at the “massive” unemployment crisis in South Africa, which currently stands at 40%, and asked the presenters to what extent collective bargaining may be contributing to the unemployment crisis. He commented that in the sense of binding agreements on wages, collective bargaining and minimum wages were often having a crippling impact on small businesses. Those collective bargaining agreements often adversely affected the restaurant sector, with the consequence being that it would become too expensive for small business owners to pay more, resulting in them having to make retrenchments. In light of this, he asked if proper research had been done on the impact of collective bargaining on small businesses.

Ms C Mkhonto (EFF) referred to the rampant corruption that occurred within the unions. She asked if anyone responsible for corruption has been brought to book yet. She enquired whether or not Members of Parliament and citizens could report them, and whether there was any structure like a bargaining council to ensure that unions were accountable to the public.

She asked Mr Mkhaliphi what the best way would be for South Africa to address the current public sector unions’ predicament.

She drew Members’ attention to farm workers and domestic workers. In terms of sectoral determinations, she said that farm workers were one of the vulnerable collectives of workers, as most of them were illiterate and some of them were migrant workers. She remarked that it was painful to see those farm workers’ employers exploit them, adding numerous unreasonable deductions such as accommodation to their meagre wages. She therefore asked if farm workers could be protected by sectoral determination, and what farm workers and domestic workers could do when getting unreasonable deductions from their wages.

DEL’s response

Mr Lamati reminded Members that a collective bargaining agreement was not a unique thing in public service, nor was it happening only in South Africa. It occurred in all sectors. The role of government, as much as reinforcing labour standards in the private and non-governmental sector, also had to ensure that the same labour standards were being applied to the public service, The DEL was therefore very concerned that the collective agreement reached between public sector unions and the government had not been honoured by the government.

Mr Lamati stressed the importance of collective bargaining as an efficient tool to safeguard workers’ rights, and to ensure that the state did not impose conditions in sectors without consulting workers. The situation in the public sector was worrisome. The Department found itself in a strained capacity, as many of its labour inspectors would otherwise have gone into less organised sectors to inspect labour standards if the public sector issue had been resolved. 

Mr Mkhalipi confirmed the Director-General’s view that the situation in the public sector was not unique. Similar incidents had occurred in many industries. He explained that in the private sector, employers simply issued an s189 to employees if the company was facing financial difficulty. In the public sector, the government had taken a different approach and simply did not want to increase public sector workers’ salaries. As a matter of fact, the unions had taken the government to the labour court at first, and had lost the case. Now the case was at the Constitutional Court. The Constitutional Court would have to decide whether the collective agreement was valid or not. If it was found to be invalid, then no party should stick to that illegal agreement. He said that the breaching of collective agreements happened with workers as well, so the recent public sector wage saga did not mean the collapse of collective bargaining.

Mr Mkhalipi responded to Dr Cardo’s question on the potential job losses as a result of collective agreements.  He said the Department had no research on whether collective bargaining would have a direct impact on job losses. The research which it had was on minimum wages, and whether minimum wages would affect unemployment. The finding had been that having a minimum wage had no negative effect on unemployment. However, there was the possibility that collective bargaining may drive up wages that sectors could not afford, hence causing job loss.

Regarding unions’ corruption, he reminded Members that unions were independent collectives. In order to effectively root out corruption in unions, members of those unions had a key role to ensure clear accountability. Registrars could de-register unions or put unions under administration, but they could not dismiss people within unions who were causing corruption. Therefore, to ensure corrupt union leaders were brought to book, union members had to play an essential role.

Mr Mkhalipi responded to Ms Mkhonto, saying that there was a sectoral determination for farm workers. It specifically regulated farm workers’ deductions, which stated that the total deductions --including accommodation and food -- must not exceed one-third of an employee’s wage unless there was a pre-agreement between both parties. He assured Members that farm workers were protected by the sectoral wage determination. He did concede that due to lack of advocacy in rural areas and on farms, many farm workers were not aware of the sectoral determination, so they still fell prey to their employers’ exploitation. The Department needed to do more work on that. 

Mr Seafield said that small businesses were entitled to request bargaining councils for exemptions from bargaining conditions. Hence, in response to Mr Cardo’s question, collective bargaining conditions may be exempted for small businesses to avoid the repercussion of job losses.

He said that the purpose of a sectoral determination was to set criteria for both employers and employees. In an instance of deductions for accommodation, the accommodation must meet certain criteria before the deductions can be made.

The Chairperson thanked the presenters for their responses. She said that the workshop had empowered the Committee, giving Members more knowledge in this area in order for them to better perform their oversight role.

She emphasised the importance of balancing employment and empowering employers and employees.

She reminded Members of the vulnerable workers in society, such as domestic and farm workers. It was a huge challenge to society. In private houses and farms, farm and domestic workers were being exploited, and such incidents were very hurtful.

She also commented on the foreign workers who were in the country illegally. Employers took full advantage of their illegality, and often subjected them to treatment that was below labour standards. It was also important to empower those migrant farm workers and to expose the employers who were exploiting farm and domestic workers.

The meeting was adjourned.

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