ATC170510: Report of the Portfolio Committee on Labour on an oversight visit to the Western Cape, dated 10 May 2017

Employment and Labour

Report of the Portfolio Committee on Labour on an oversight visit to the Western Cape, dated 10 May 2017

 

The Portfolio Committee on Labour, having conducted an oversight visit to workplaces in the Western Cape from 22 to 24 March 2017, reports as follows:

 

1. Introduction

 

Parliament derives its powers from the Constitution of the Republic of South Africa. Section 42(3) bestows oversight of executive function to the National Assembly. Section 55(2)(b) empowers the National Assembly to provide for mechanism to maintain oversight of the exercise of national executive authority, including the implementation of legislation.

 

One of the functions of oversight listed in the Oversight and Accountability model is to ensure that policies announced by government and authorised by Parliament are actually delivered. This function includes monitoring the achievement of goals set by legislation and the government’s own programmes.

 

In compliance with the above, the Portfolio Committee on Labour undertook an unannounced oversight visit to the clothing and textile factories in the Western Cape. In addition, the Committee visited the projects that are supported by the Productivity South Africa through its turn-around solutions. The clothing and textile industry falls under the manufacturing, whose share in the secondary sector of the economy declined from 20 per cent in 1994 to 12 per cent in 2012. Clothing and textile sector contracted from 7 per cent of the manufacturing industry in 1994 to 3 per cent in 2012. The decline of the clothing and textile sector is mostly attributed to competition with cheap imports from other countries. This has resulted in loss of a significant number of jobs in the sector. As a result of the desperate situation that the sector finds itself in, non-compliance to labour legislation is reported to be prevalent. Therefore, the focal point of the visit was to monitor compliance to legislation. The purpose of this report is to highlight the issues raised by the workers and employers as well as the observations made by the Committee Members during the oversight visit and to make some recommendations.

 

1. Objective of the visit

 

The objective of the visit was to monitor compliance to labour legislation with regard to working conditions of the workers, contracts of employment, status of work permits for foreign nationals who work in South Africa and other matters relevant to conditions of employment.

 

1. Delegation

 

1. Portfolio Committee on Labour

 

The delegation comprised the following Honourable Members:

 

Ms FS Loliwe (Acting leader of the delegation (ANC))

Ms L Mjobo (ANC)

Ms TMA Tongwane (ANC)

Ms SR van Schalkwyk (ANC) - 22 April 2017 only

Mr D America (DA)

Mr M Bagraim (DA)

Mr MA Tlouamma (Agang SA)

 

The following support staff accompanied the delegation:

 

Mr ZC Sakasa, Committee Secretary

Mr S Ngcobo, Content Adviser

Ms S Mkhize, Researcher

Ms N Tshoma, Committee Assistant

Ms E Deysel, Language Practitioner

Mr BG Mani, Language Practitioner

 

1. Oversight visit to Trade Call Investments Apparel (PTY) LTD in Epping (22 March 2017)

 

The delegation was met by the Group Executive, Operations Executive and Human Resources manager. The leader of the delegation informed the manager of the purpose of an unannounced visit. The Group Executive manager was requested to take the delegation on a walk-about in the factory.

 

1. Committee Observations

 

After meeting with the workers during the walk-about in the factory floor, the delegation made the following observations:

 

• The excessive heat in the factory floor is as a result of some extractor fans not being in working order. Extractor fans, when in good working order, emit cool air in summer and warm air in winter. A top management meeting will be held soon to discuss the issue and the Portfolio Committee will be appraised of developments in due course. In the interim, portable fans are provided for cooling purposes.
• The cutting area is cleaned regularly to minimise dust. Dust masks are provided to workers whose work involves cutting material so as to avoid fluff inhalation. A glass of milk is provided every two hours to employees when working with high fluff material.
• Toilets are cleaned regularly but toilet rolls are not left in the bathrooms. Toilet rolls are provided to individual employees.
• A broken machine was switched off as recommended by the labour inspectorate.
• Minor injuries are treated on site and serious injuries are referred to health facilities as “Injury on Duty” cases. Sixteen injuries have been reported in the current month.
• There was no visible legislation posters. However, it was reported that there is one in the reception area.
• The majority of the work force are youth and female. The factory also employs foreign nationals. The Group Executive informed the delegation that the company is employment equity compliant.
• The remuneration of employees is influenced by the type of work, experience and the level of training. The workers are also expected to meet production targets and are compensated for exceeding targets. Workers earn R1100 per week on average. This is before statutory deductions and garnishee orders.

 

 

1. Committee Recommendations

 

The Committee recommends as follows:

 

• The Occupational Health and Safety Inspector must follow up on the dust problem and report back to the Portfolio Committee.
• The Company must forward the employment equity breakdown of the establishment to the Committee secretary.
• The Company must provide the Committee with the plan to address the air-conditioning problem at the factory.

 

1. Oversight visit to Romatex (PTY) LTD in Elsies River (22 March 2017)

 

The Parliament delegation was welcomed by Mr Brink of the Productivity South Africa (PSA). PSA had been involved with Romatex for the previous 6 – 7 months through its turn-around-solutions. The project is funded by the Unemployment Insurance Fund (UIF) for the purpose of retaining jobs and creating more jobs where possible. There has been an increase in through-put at Romatex since PSA involvement. PSA introduced the Modern Management Model at Romatex, which views the factory as a close and interconnected system. It is a LEAN approach and is horizontal as opposed to vertical scientific approach. The horizontal approach engages and empowers workers on the factory floor to provide inputs towards solutions of problems.

 

Romatex has two branches, the one in Cape Town and another one in Durban. The Cape Town branch (Elsies River) specialises in inners for pillows, duvets and throws. The Durban branch specialises in outers including fitted sheets. The Cape Town branch has a staff compliment of 280, with 220 paid weekly and 60 monthly.

 

1. Committee Observations

 

After walking about the factory floor, Parliament delegation engaged with management and the following are observations and responses to the questions raised by the delegation.

 

• The employees work a four days’ week. They only take one tea-break per day. Workers overtime is used to cover for sick absence. They are paid for eight hours on public holidays regardless of the number of hours worked. The weekly payment is approximately R750 per week.
• Hygiene audit is done regularly to check air quality and heat, but the temperature was very high on the factory floor and there was no visible cooling system.
• There are no vacancies in the factory.
• The factory employs two foreign nationals from Congo.
• The factory is audited by its internal auditors, external auditors, Woolworths (client) and the Department of Labour.

 

1. Committee Recommendations

 

The Committee recommended that:

 

• The Department of Labour Inspectorate follow-up on the legality of employment of foreign nationals.
• The factory owner addresses the poor ventilation and/or cooling system.

 

 

 

1. Oversight visit to Gerly Clothing in Maitland (22 March 2017)

 

The delegation was met with some resistance from the supervisors in the factory who wouldn’t allow access claiming that the owners were not available. After a call to the owners, the delegation was allowed access.

 

The members of the delegation had brief engagement with some workers and were informed as follows:

 

• Workers were paid R1 116 per week before deductions.
• Most workers belonged to a Sick Fund.
• Most workers were engaged on a contractual basis.
• Workers didn’t get paid when they are off-sick even with medical certificates.
• The UIF was deducted from the workers’ salaries.
• Workers didn’t belong to a trade union.
• The Health and Safety inspector of the DoL informed the delegation that the factory was unsafe to operate due to exposed live electric wires which were a hazard to workers.

 

The visit was aborted as the Health and Safety inspectors were preparing measures for a shutdown of the factory.

 

1. Oversight visit to Abagold Ltd in Hermanus (23 March 2017)

 

Abagold is an aquaculture farm that cultivates and produces abalone. It is situated in Hermanus, Western Cape province. It employs 401 permanent workers and 6 interns.

 

The Committee delegation conducted a fact finding exercise through communicating with workers and management separately. The following observations emanate from that exercise:

 

• The wages of elementary workers ranged between R1549 and R2000 per fortnight depending on the nature of work and experience. They were paid a yearly increment of R45 and a bonus at the end of each year, which was equivalent to a one month wage.
• Workers received allowances such as the Provident Fund, Long Service Allowances and Performance Bonuses.
• The workers belonged to a sick fund and were required to contribute half towards the fees charged by the company doctor.
• Abagold contributed towards the Unemployment Insurance Fund of its employees as per legal requirement.
• The company reported that it is compliant in terms of Employment Equity Act.
• Workers complained that sick leave was only granted under stringent conditions. They said that they were sometimes compelled to work closer to the ocean even when health conditions mitigated against being deployed there.
• The company had a health and safety committee and trained health and safety officers.
• Abagold had to reduce the number of staff to the current level as a result of Harmful Red Tide (HRT) and Harmful Algae Bloom (HAB). The Fixed Term Contract workers’ contracts could not be renewed. The Productivity SA intervened through its turn-around solutions to save the company from further loss of jobs,
• Some of the barriers to entry for the previously disadvantaged groups were identified as the following:

• obtaining the right to farm,
• conducting an environmental impact assessment,
• suitable land,
• capital input of R1 million to start production,
• electric capacity for pumping sea water, and
• access to labour and technology.
• Abagold provided training to its employees and beyond.

 

From Abagold, the delegation proceeded to the nearby Qhayiya Secondary School in Zwelihle Township, Hermanus. Qhayiya Secondary School is a Public Secondary School with more than 1000 registered learners from Grade 8 to Grade 12 and 31 qualified educators. The delegation was addressed by the Principal of the school supported by his School Management Team (SMT). He informed the delegation that the school had a lot of challenges including low pass rate and was at risk of being closed down by the Department of Basic Education. The current principal was appointed in 2011 with the aim to rescue the school from further decline and ultimate closure. The matric results improved from 32 per cent in 2010 to 66 per cent in 2011.

 

Abagold partnered with the school in 2013 with the aim of assisting the school in achieving 85 per cent matric pass rate. In that year the school managed to achieve a 76 per cent pass rate with 27 of the matriculants achieving a university entrance pass.

 

Through its association with Abagold, Qhayiya Secondary School commenced with the Productivity SA School of Excellence Model programme in 2015. The programme is derived from the Goal Alignment Toolkit of the Workplace Challenge Programme. The matric pass rate improved from 80 per cent in 2015 to 88 per cent in 2016. It has a vision of achieving a 93 per cent pass rate in 2017.

 

1. Committee recommendations

 

The members of the delegation commended Abagold on its achievements and encouraged it to continue with its skills development activities for its employees and surrounding communities.

 

1. Oversight visit to Watervliet Farm (PTY) Ltd, in Porterville (24 March 2017)

 

The Agriculture Fund is a joint venture between the Public Investment Corporation (PIC) that is responsible for investing moneys of the Unemployment Insurance Fund (UIF) and Old Mutual. They both invested R500m each in five farms. One of the farms, which is a grape farm is in Porteville. When the farm was bought, it was taken over as a going-concern-This means that the new owners of the farm had to take over the workers of the old employer at no lesser terms of employment.

 

The delegation conducted an oversight visit to the Porterville farm by interacting with workers and management of the farm. After the interaction, the delegation made the following observations.

 

• The farm had a housing scheme to accommodate its workers. There were 800 seasonal workers who stayed in hostels and 160 permanent workers who occupied family units. The permanent workers that lived in family units were provided with cards to buy electricity.
• This was one of the farm programmes, the others being the adult learning and the health care facility.
• Scholar transport is provided to take children to school.
• The former farm-owner’s wife owned the farm shop at the farm and debt incurred by workers at this shop is deducted from the payslip. The delegation was told that the current management was in the process of rectifying that situation.
• The minimum wage was R15.49 per hour, in line with the sectoral determination for farm workers. This translates to the gross salary of R832.90 per week for permanent workers and R692.55 for seasonal workers. The wage level was also influenced by skills and experience. The tractor driver earned the maximum R832 per week. The workers are entitled to overtime when taking part in packing grapes. Workers were paid double for working on a Sunday. Working time is from 8am to 4pm. The normal working week is 45 hours.
• The employer provided overalls for workers but deducted from the workers’ wages for the safety shoes.
• Workers belonged to a trade union named BAWUSA.
• Workers were paid in full for sick leave if they could provide the medical certificate.
• The toilets at the fields were found to be in a bad state.

 

1. Committee recommendations

 

The Committee recommended that since there was a scheduled inspection to this farm in a week’s time, the Department provide feedback to the Committee after the inspection.

 

1.       OVERALL RECOMMENDATIONS

 

The Portfolio Committee on Labour recommends that the Minister of Labour consider the following:

 

• Ensuring that inspections are conducted regularly in the above institutions and that the above specific recommendations are followed up.
• Ensuring that some form of security is provided to accompany the Members of the Portfolio Committee on Labour when conducting oversight visits to factories and farms.
• Ensuring that relevant officials from the Department of Home Affairs accompany the Members of the Committee when conducting oversight visits to factories and farms.
• Ensuring that there is uniformity with regard to recognition of long service in the clothing and textile industry.

 

The Department of Labour should report back to the Portfolio Committee on Labour on progress made with regard to the above-mentioned recommendations within a months after the report has been adopted in the National Assembly.

 

 

Report to be considered.