ATC170510: Report of the Portfolio Committee on Labour on an oversight visit to Kwazulu-Natal, dated 10 May 2017

Employment and Labour

Report of the Portfolio Committee on Labour on an oversight visit to Kwazulu-Natal, dated 10 May 2017

 

The Portfolio Committee on Labour, having conducted an oversight visit to workplaces in KwaZulu- Natal from 28 to 31 March 2017, reports as follows:

 

1. Introduction

 

Parliament derives its powers from the Constitution of the Republic of South Africa, 1996. 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 KwaZulu-Natal clothing and textile factories. One of the factories visited was a shoe manufacturing factory, which falls under the National leather bargaining Council. The focal point of the visit was to monitor compliance with labour 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) - 28 March 2017 only

Ms Tongwane (ANC)

Ms S Van Schalkwyk (ANC)

Mr B Mkongi

Mr I Ollis (DA)

Mr M America (DA)

 

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

 

1. Oversight visit to Jarma Trade Zone in Clairwood (28 March 2017)

 

The leader of the delegation informed the manager of the purpose of the unannounced visit. After the walk-about the delegation met with management and the following are observations of the delegation:

 

• There were two notices displayed in the factory floor, one regulating the use of ablution facilities and the other prohibiting communication between workers during working hours. The manager undertook to remove these notices.
• The factory is using a biometric clocking system.
• The Unemployment Insurance Fund (UIF) and the Provident Fund (PF) were deducted from workers’ salaries.
• On some occasion, workers were paid on Monday instead of Friday as a result of delayed payment by the company customer.
• The manager undertook to forward the Sick Leave Policy of the National Clothing Bargaining Council to the Committee secretary.
• Some of the workers chose to not belong to the Bargaining Council because of the Council levy.
• The delegation was informed that some workers were sent home at 08:00 because the electricity was off.
• The company employs some foreign nationals from Lesotho and Malawi. It was reported that some foreign nationals were sent home by officials of the Department of Home Affairs, to get their work permits.
• Some of the Health and Safety hazards observed include:
  • Fabrics/ garments lying all over the place (poor house-keeping).
  • Workers not aware who their health and safety representatives are.
  • Most toilets were marked as for men while the majority of workers are female.
  • The toilets appeared not to be cleaned regularly.
  • Cigarette smoke coming from nearby stairs could be smelled on the factory floor.
  • One electric box was not covered, hence exposing electrical wires.
  • Dirt bins were found over-flowing with dirt.
• Workers were not given payslips to see deductions effected in their wages.
• Legislation posters were not prominently displayed as legally required.

 

1. Committee Recommendations

 

The Committee recommends as follows:

• The Department of Home Affairs should verify citizenship and/ or work permits of foreign nationals.
• The Department of Labour should do inspections to ascertain compliance to relevant labour legislation.
• Certificate of compliance for electrification should be obtained from the company.

 

1. Oversight visit to 2KG Investments CC in Clairwood (28 March 2017)

 

After walking about the factory floor, the Parliament delegation engaged with management and the following observations were made by the delegation.

 

• The employees were found working with fluffy clothing material without wearing face masks to protect them from inhaling fluff.
• The factory employed approximately 16-17 foreign nationals but all have since left the factory. However, five people were seen running away when the convoy of cars carrying the parliamentary delegation and accompanying officials from the Department of Labour and Home Affairs arrived at the factory. The delegation was informed that those were the foreign nationals working for the company. One Malawian national was hiding behind a curtain and another was found hiding in another room. They were both handed over to the Department of Home Affairs officials.
• The factory closed down in March 2014 and reopened in July 2014. Some former workers were re-employed when the factory re-opened. The informants were not aware of the new terms of contract.
• Most of the workers were employed when the factory re-opened in July 2014. The pay slip of one of the workers revealed that she earned the gross wages of R388.26 per week. The deductions were as follows:
  • Unemployment Insurance Fund: R3.88
  • Provident Fund: R35.60
  • SACTWU: R10.33
  • Council Levy: R1.50
  • Total deductions: R51.31
  • Net pay: R336.95
• Workers get paid sick leave when they are off-sick.

 

1. Committee Recommendations

 

The Committee recommended that:

 

• The Department of Labour Inspectorate follow-up on legality issues regarding the employment of foreign nationals.

 

1. Oversight visit to Stephlin Clothing in Chatsworth (28 March 2017)

 

The members of the delegation engaged with some workers during the walk-about and made the following observations.

 

• One worker, who claimed to have been working for the factory since 2010, provided the wage slip , which showed the following:
  • Number of hours worked: 42.5
  • Gross wages: R625
  • Bonus: R50.00
  • Total: R675.00
• The UIF, PF and Bargaining Council (BC) levy did not reflect on the wage slip.
• Another worker who said she had been working for the company for three months, informed the delegation that she earned R300 per week. She told the delegation that she is from Lesotho and that she has a work permit, which she renews every two months. She said there are no statutory deductions from her wages.
• Another worker informed the delegation that she earned R575 for working seven days per week. She had been employed in the factory since 2004. She is from Bhizane in the Eastern Cape. She did not belong to a trade union. She did not have any Family Responsibility Leave to attend to emergencies at home.
• Some workers informed the delegation that they did not get paid sick leave even when they provided the sick certificate from the doctor.

 

1. Committee Recommendations

 

It is recommended that:

 

• The Inspectorate branch of the Department conduct a thorough inspection of the company and report back to the Portfolio Committee on Labour.

 

1. Oversight visit to SOP (PTY) Ltd in Chatsworth (28 March 2017)

 

The members of the delegation met with the factory managers after engaging workers on a walk-about and the following observations were made.

 

• The factory manufactured shoes.
• The ordinary workers were paid R18 and the machinists R22 per hour. The experience of an individual worker was taken into account in determining the wage.
• The workers were paid per fortnight. One of the wage slip showed that:
  • Normal earnings: R1.719,90
  • Rate/ day: R18/ 91 days
  • Provident Fund Employer Contribution: R47.63
  • Tax Deduction: R87.32
  • Total Package: R1.767.53
  • Total Taxable Earnings: R1.680.21
  • Gross Cash pay: R1.719.90
  • Deduction: R76.81
    • Agency Fee: R7.94
    • Council Levy: R3.57
    • Provident Fund: R39.69
    • Sick Fund: R7.94
    • UIF: R17.67
  • Nett Cash Pay: R1.643.00
• Some workers belong to SACTWU.
• Some workers reported that they are not paid sick leave.
• Workers were given two weeks’ leave at the end of the year.
• The accounting department that is responsible for administration of wages is based in Berea, Durban.
• The factory employed approximately 8 – 10 foreign nationals and they reportedly all have relevant documents.
• The factory did not have a canteen and change rooms. Lockers were not provided for safe keeping of workers’ personal belongings.
• Some workers were not provided with protective clothing.
• Legislation posters were not prominently displayed as per requirement.
• The health and safety risk assessment was not done. Fire extinguishers were not put in strategic positions.
• The factory did not have a trained first aider.

 

 

1. Committee Recommendations

 

The Committee recommends as follows:

 

• The Department of Labour should conduct inspection to assess compliance to relevant legislation and take necessary action.

 

1. Oversight Visit to Colima Trade in Newcastle (29 March 2017)

 

After engaging with workers during the walk-about, members of the delegation met management representatives and the following emanated from discussions with both workers and management.

 

• The company was first called Afrika HK and later changed name to Camel Rock before becoming Colima Trade. It is owned by a foreign national who arrived in South Africa in 1990.
• The workers told the delegation that they were informed in advance about the visit of the delegation from Parliament. It was established that the factory was probably informed by the Chinese Chamber of Business.
• The delegation was informed that workers are paid for sick leave when they produce sick certificate from the doctor.
• The wages of workers were paid through bank transfers. When questioned about non-statutory deductions from workers’ wages, the delegation was informed that it is for paying back the money loaned to the workers by the company.
• When questioned about the observation, which was confirmed by the workers that the supervisors are foreign nationals, the delegation was informed that it is because they are well trained.
• The health and safety official of the DoL made the following observations:
  • There was no risk assessment conducted by the company.
  • The factory did not have health and safety representatives as required by Health and Safety Act.
  • The factory did not have a worker that is trained in First Aid as required.
  • The steam generator was hot and exposed and there was no warning sign around it.
  • The wires were not properly coded and earth wire was not connected to the mains, thus constituting a hazard.
  • There was no emergency exit in case of emergency.
  • Some toilets did not have toilet seats and the toilet paper was not provided in toilets.
• The delegation was informed by the official from the Department of Home Affairs that asylum seekers’ permit allows holders to work or study in South Africa since the country does not have refugee camps where they could be provided with food and other necessities.

 

1. Committee recommendations

 

The Committee recommends as follows:

 

• That the inspectorate of the Department of labour do follow-up inspections and report back to the Portfolio Committee on Labour.

 

1. Oversight visit to Sky Sheng in Newcastle (29 March 2017)

 

After engaging workers on a walk-about of the factory floor, the delegation met management representatives and the following information came out of engagement with workers and their managers.

 

• The factory employed 120 workers, of which 60 percent were permanent. Thirty nine workers were absent on the day of the oversight.
• Some workers were paid on a piece rate as opposed to hourly or daily rate. One worker informed the delegation that she earned R60 per day. She had been working for the company for the past eight months but was still on casual employment. Another worker informed the delegation that she had been working for the company for three years but was still a casual wrker. The delegation was informed that the piece rate ranges between four and ten cents per item ironed. The piece rate was reduced to not exceed R100 per day if the worker ironed a lot of items. When asked about the criterion used to determine who must be on piece or daily rate, the manager said the workers were given options and the majority chose the piece rate option.
• Some workers were found not to be registered for UIF, PF and BC levy. When asked about this, the explanation of the manager was that the company was in the process of registering workers and their identity documents were taken in batches to the Department of Labour for registration.
• Some of the workers employed in the factory were from Lesotho.
• Most supervisors were reported to be South Africans.
• The factory provided accommodation for workers when they have to work until late. The workers did not pay for this accommodation. However, the accommodation was found not to comply with municipal by-laws. It was reported that 48 workers shared one toilet.
• Some workers reported that they did not receive pay slips. The explanation of the manager was that pay slips were provided on request.

 

1. Committee recommendations

 

The Committee recommended that:

 

• The Department of Labour follow-up on all identified irregularities and report back to the Committee within two weeks.

 

1. Oversight visit to Top Dress in Newcastle (29 March 2017)

 

The Parliament delegation engaged with the workers during a walk-about and met the managers thereafter. The following observations were made after these engagements.

 

• A worker who was newly employed informed the delegation that she earned R260 per week.
• Another who had been in employment with the factory for some time said that she earned R505 per week. However the manager informed the delegation that the company paid the minimum wage as per Bargaining Council agreement.
• The working day started at 7:00 and ended at 16:45. The tea time was from 10:00 to 10:15 and the lunch time was 13:00 to 13:20. Workers complained that they did not get double pay for Sunday and Public Holiday work.
• Workers did not receive pay slips and there were no deductions for the UIF, PF and BC levy. The manager’s explanation was that the company is a co-operative and therefore not required by law to make contributions for those benefits.
• Some of the workers are foreign nationals from Lesotho. They were provided with hostel accommodation on the premises of the factory. The conditions at hostel were not in a good state. The workers were over-crowded and did not have basic necessities like wardrobes. Ten workers shared three stoves and as a result had to take turns to cook.
• Workers complained that they did not get paid sick leave even when they produced medical certificates. They also complained that their wages were deducted when they came to work late after going to the clinics to collect medication for chronic diseases.
• The workers did not have a canteen and lockers to keep their personal possessions. As a result, workers were required to have lunch at their work stations.
• The employer kept dogs on the premises and the explanation was that it was for security reasons.
• The emergency exits were blocked thus constituting a hazard in case when emergency evacuation becomes necessary.
• The ablution facilities were found not to meet health and safety standards. The toilet seats were broken and toilet paper was not provided.

 

1. Committee recommendations

 

The Committee made the following recommendations:

 

• The Department should investigate whether the factory is a genuine cooperative or a pretext to avoid providing benefits to the workers.

 

1. Oversight visit to Isithebe/Mandeni (30 March 2017)

 

The delegation proceeded to Isithebe/Mandeni region and again realising that the factories had been alerted of the visit, the delegation had to split into two groups. One group attended to Sqalakabusha Co-operative and another group to Niko Zhang Trading, both situated next to each other in Indigo Street, Mandeni.

 

11.1      Sqalakabusha Primary Workers Co – Op Ltd

 

After the delegation engaged with workers and company management, the following observations were made.

 

• The Sqalakabusha Primary Workers Co-operative is a factory that was formed in 2005.
• Some workers told the delegation that they earned R280 per week while others said they earned about R220 per week. The other worker informed the delegation that she earned R600 per week. However, they could not produce pay slips as evidence of their weekly wages. They also informed the delegation that there were deductions for UIF and PF from their wages. The daily rate was reported to be R45 per week day and R50 on Sunday.
• The working hours are from 07:00 to 16:45. The official from labour informed the delegation that minimum wage for the National Clothing Bargaining Council is R838 per week
• The workers complained that they did not get paid sick leave.
• Some workers who used sewing machines had face masks on and others not. However the masks that they were wearing were not proper masks but were self-made from linen cut-offs.
• There were Lesotho nationals employed in the company. They, however, did not complain of any ill treatment. It could not be ascertained whether they were legally employed.
• The delegation was informed that the workers did not belong to a trade union and did not have a bargaining council.
• The ablution facilities were found not in a hygienic state and there were no toilet papers provided. The workers were apparently required to pay R10 to use toilet facilities. The delegation was also told that the toilets were constantly blocked due to use of pieces of cloth.

 

 

11.1.1   Committee Recommendations

 

The Committee made the following recommendations:

 

• That the Inspectorate of the Department conduct an inspection on the factory and take necessary action where the factory is found in breach of the law.
• The Department should investigate whether the factory is a genuine cooperative or a pretext to avoid providing benefits to the workers.

 

11.2      Niko Zhang Trading

 

During a walk-about at the factory, the Committee observed the following:

• The machinists start at R430 per week, but unaware of hourly rates.
• Workers get themselves fired automatically if they get sick and stay at home.
• There is no deduction for UIF in their makeshift pay-slips on a small piece of paper.

 

11.2.1   Committee Recommendations

 

The Committee made the following recommendations, that the Department of Labour :

 

• Conducts follow-up inspections on the health and safety issues at the factory to ensure compliance.
• Investigate the sick leave and other leaves as workers seemed not to have proper training on such matters.
• Conduct advocacy campaigns to enlighten workers of their entitlements.

 

1. Oversight visit to Knitwear International in Mandeni (30 March 2017)

 

After engaging with both workers and employers, the committee delegation was informed as follows:

 

• The company employed 423 workers.
• The salaries range between R700 and R838 per week depending on experience.
• They got two weeks paid leave at the end of the year.
• The workers are registered for the UIF, PF and were members of the BC.
• The workers were receiving pay-slips on their pay days.
• There were no foreign nationals employed in the company.
• The company policy accommodated special needs like pregnancy.
• The company did not have any pending cases of incapacity.
• The ablution facilities were found to be in an unhygienic state.
• The factory floor was hot as a result of default in the air-flow.
• The workers did not wear dust-masks.

 

1. Committee recommendations

 

The Committee recommendations were as follows:

 

• The inspectorate of the Department has to ensure that the broken toilets are repaired and the airflow problem addressed.

 

 

1. Oversight visit to Fashion River in Mandeni (30 March)

 

After engaging workers on a walk-about and meeting management representatives, the delegation was informed as follows:

 

• The wages of workers ranged between R360 and R560 per week.
• The workers reported that they were not paid double pay for Sunday work.
• Some of the workers were Lesotho nationals.
• The workers from Lesotho were not members of the Labour Union.
• It was reported that most supervisors were Lesotho nationals.
• One Lesotho national reported that they were paid less than local employees.
• The factory also employed nationals from Swaziland.
• The working hours was from 07:00 and 16:45.
• Workers had three weeks leave at the end of the year.
• Some workers reported that they did not have paid sick leave.
• The workers were registered for UIF, PF and BC.
• One worker reported that she had chest pain as a result of working with clothing material. The other one reported that she was injured on duty and was not paid as per Compensation for Occupational Injuries and Diseases Act (COIDA).
• There was no canteen and not enough toilets in the factory. The available toilets were not cleaned regularly.

 

1. Committee recommendations

 

The Committee made the following recommendations:

 

• The Inspectorate of the Department must send inspectors to investigate the issues raised above.
• The Department of Home Affairs together with the Department of Labour must ascertain the legality of foreign nationals.

 

1. Oversight visit to Qinsheng Clothing Factory in Mandeni (30 March)

 

After engaging with workers and employers, the Committee made the following observations:

 

• The company employed 150 workers.
• One worker started in 2011 as a machinist and was then an administrative clerk and earned R560 per week.
• The workers received their pay slips showing deductions. Among the deductions shown are UIF, PF and BC.
• The factory employed some workers from Lesotho and the delegation was told that they have permits.
• The company benefits included paid sick leave and annual leave of six weeks at the end of each year.
• The factory did not have a canteen for its workers, they share lockers and ablution facilities are insufficient.
• The toilet brakes are monitored and the workers are not allowed to spend more than five minutes in the toilet.

 

 

1. Committee recommendations

 

The Committee made the following recommendations.

 

• The Department should check the salary deductions and validity of work permits of foreign nationals.
• The Department should ensure that the toilet register is stopped.
• The Department should write to the factory identifying issues that need to be addressed and copy the response of the company to the Portfolio Committee on Labour.

 

1. Oversight visit to Angel Footwear Manufacturers cc at Isiphingo (31 March)

 

After engaging with workers and management, the Committee made the following observations:

 

• The factory employed workers as casuals for longer periods.
• Workers were paid between R520 and R1000 per week, depending on skills and experience.
• They got double pay for working on Sundays and Public Holidays.
• They belonged to a trade union called NUCO.
• UIF and PF were deductions reflecting on their pay slips.
• Workers were provided with masks but most of them didn’t use them because of heat. This was despite them using chemicals that emit strong fumes.
• They got three weeks paid leave and bonuses at the end of each year.
• The company did not have a canteen.
• The company did not employ foreign nationals.
• Some machines did not have safety covers.
• The factory had new toilet facilities that were in good condition.
• The temperature was very high on the factory floor.
• Workers were paid per A-rate when they were late for 15 minutes per week as per bargaining council agreement. The reason provided by the factory manager was the importance of time keeping in the factory setting since one late employee can delay the entire production line.
• The factory had a Sick Fund for its employees whereby they are supplied with cards to use when needing access to Health Care Centres. The name of the sick fund is the Leather Industry Sick Fund. The Fund has a panel of doctors that an employee may choose from depending on the geographical ease of access. There is a supplementary sick fund for accessing other health care practitioners such as dentists and ophthalmologists.

 

1. Committee recommendations

 

The committee made the following recommendations:

 

• The factory should consider investing in a cooling system to lower the level of heat on the factory floor and improve air ventilation.
• The factory should consider providing space where their employees could seat during their break times.
• The company should enforce the use of protective clothing such as masks and gloves where required by law.
• The factory should ensure that all equipment that needs to be serviced such as air receivers are serviced.
• The company should consider installing the shelves to clear the factory floor lay-out.

 

1. OVERALL RECOMMENDATIONS

 

The Portfolio Committee on Labour recommends that the Minister of Labour ensures that the Department of Labour:

 

• follows up on all the above recommendations.
• investigates wages in the clothing and textile industry in general.
• determines the legality of employment of foreign nationals.

 

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

 

 

Report to be considered.