BRIEFING FOR THE AGRICULTURE PORT FOLIO COMMITTEE ON FARM WORKERS STRIKE 19 MARCH

INTRODUCTION & BACKGROUND In November 2012, farm workers in the Western Cape went on strike demanding R150 per day as the minimum wage. Government responded by sending senior representatives including Ministers to intervene and bring parties together to negotiate a settlement and try and resolve the strike. On 10 November 2012, the Minister of Agriculture, Forestry and Fisheries called a meeting to urge parties to resolve the strike through negotiations. The meeting collapsed as employers indicated that they did not have a mandate to enter into discussions regarding wage increases. Instead, they proposed that negotiations should be held at the farm level. 2

INTRODUCTION & BACKGROUND CONTINUED On 12 November 2012, DAFF Minister called another meeting with employers to persuade them to negotiate with the trade unions. Again there was no favourable response from employers. On 15 November 2012, the Department of Labour (DoL) published two notices in the Government gazette announcing the intention to cancel the sectoral determination and also the process to review minimum wages in the agricultural sector. On 16 November 2012 after the publication of the two notices, DoL convened a meeting with Agri SA and other employer organizations to initiate a process of negotiations. They agreed to such a process, and agreed also to coordinate a delegation of 10 members from the sector to negotiate on their behalf. 3

INTRODUCTION & BACKGROUND CONTINUED The negotiation process was aimed at ensuring that parties make a joint submission to the ECC before it made its recommendation to the Minister. The following parties participated during the negotiation process: Agri SA ; Agri-Sector Unity Forum ; African Farmers Association of South Africa (AFASA) LWO employer’s organization ; Agricultural Workers Empowerment Trade Union Council (AWETUC ); Farm workers Dwellers Forum ; Food Sovereignty Campaign ; Women on Farms Project ; Mawubuye Land Rights ; United Democratic Front ; Food and Allied Workers Union ; COSATU ; Cape Agriculture Employers Organization ;and TAU-SA. 4

NEGOTIATION PROCESS The first negotiation meeting between the parties was in held on 22 November 2012 under the auspices of the CCMA. During the negotiations the following was agreed to by the parties: Overarching framework for conducting negotiations That the negotiations will be conducted within the ambit of the Labour Relations Act, of 1995 and Basic Conditions of Employment Act 75, of Parties agreed that there is a sense of urgency in finding a solution to the dispute, which also necessitated a consideration of options outside of the legislative framework That the challenges confronting the sector can be categorised into short term and medium to long term. 5

NEGOTIATION PROCESS After a list of demands by labour was tabled, parties agreed to adopt the following: That issues relating to wages; dismissal; disciplinary action; evictions and intimidation on the farms should be addressed as a matter of urgency. That a two-aside task team be appointed and establish a mediation task team which will evaluate and assess all complaints brought by workers and farmers That the mediation task team would attempt to resolve the issues through a process of facilitation and negotiations That in the event the dispute remains unresolved; it will be referred to the relevant and appropriate forum or institution that has the legal mandate to address the complaint. That the task team would engage the Bureau for Food and Agricultural Policy (BFAP), as proposed by Agri SA and supported by all parties, to provide an agricultural economic analysis that will inform the parties in their negotiations. That the next plenary meeting would be held on 29 November 2012, in Cape Town, where the report by the BFAP would be discussed. Parties duly met but negotiations could not take place as the BFAP report was not ready and consequently, Labour indicated that they are going back on strike. 6

NEGOTIATION PROCESS Early this year on 4 January, the Director-General of DoL further met with the parties to try and persuade them to resume negotiations under CCMA auspices. Employer parties still maintained that they did not have a mandate to discuss minimum wage increases and thus no negotiations took place. He also met the parties again on January 7 and 8 but no solution was found Subsequent to that, AGRISA forwarded the BFAP report to the department 7

PUBLIC HEARING PROCESS Alongside the negotiation process, DoL commenced a process of public hearings throughout the country to obtain inputs for purposes of reviewing the sectoral determination. This process was concluded on 18 December 2012 in all provinces except for the Western Cape where hearings were concluded on the 20 January During the public hearings, 483 employers/employer organizations attended, whilst 1145 employees/employee organizations attended and made meaningful inputs. In all the hearings, workers and their representatives continued to demand R150 per day whilst employers argued that BFAP results must inform the review process. 8

THE BFAP RESEARCH FINDINGS Amongst others, the following were conclusions made by BFAP in its report: On the worker’s dilemma, the average wage base of farm workers is R84.90 per day That even if the minimum wage is R150 per day; most households cannot provide the nutrition that is needed to make them food secure. That none of the hypothetical typical rural Western Cape wage earning households presented can actually afford an energy adequate and nutritionally balanced daily food intake (as seen in ‘balanced daily food plate’ option 1) – not even a household with two adults earning a wage of R150 per worker per day. 9

THE BFAP RESEARCH FINDINGS On the farmer’s dilemma, the study indicated that if the average wage increases to more than R104, 98 per day, many farms will be unable to cover their operating expenses, and hence not be able to pay back borrowings or to afford entrepreneurs remuneration. That an increase of a wage to R150 per day will increase the total compensation value from R13.6 billion to R20.8 billion which represents a 53% increase or R7.2 billion increase. That from the farm level analysis, intensive farms will not be bale to pay a minimum wage of R150 per day. 10

EMPLOYMENT CONDITIONS COMMISSION (ECC) DELIBERATIONS When drafting the recommendations to the Minister, the ECC in terms of the BCEA is required amongst others to consider, the ability of the employer to conduct business successfully; the impact that the proposed wage will have on job creation and job retention; the impact of the minimum wage on poverty alleviation; and the impact that it would have on the cost of living. During the deliberations, majority of the ECC recommended that the new minimum wage be pegged at R105 per day. This was informed by the inputs received during the public hearings and the findings of the BFAP report. Recommending R105 per day, the ECC was also aware of the potential job losses which could happen as a result of the recommended increase. Due to the provisions of the BCEA for an exemption, the ECC felt that those farmers who cannot comply with the recommended wage should apply for an exemption. 11

ECC DELIBERATIONS In line with the new minimum wage, the ECC recommended that DoL towards the end of term of the new wage dispensation, undertake a similar study to assess the impact of the new wage in the sector. In addition that DoL will forward the BFAP report to NEDLAC for consideration in dealing with the long term issues relating to the transformation of the agricultural sector in South Africa 12

POSSIBLE RETRENCHMENTS DoL has been informed by AGRI SA that farmers in Limpopo and Mpumalanga intend to retrench about 2000 workers This is despite the fact that the Minister and also the department communicated with farmers that in the event that they cannot afford the prescribed wage, they can apply for exemption 13

APPLICATIONS FOR EXEMPTIONS RECEIVED The following statistic reflects the number of applications for exemptions received:  Mpumalanga -291  Limpopo -143  Western Cape -591  Eastern Cape -107  Northern Cape  Free State -56  North West -21  Kwa-Zulu Natal -97  Gauteng -25 TOTAL NUMBER RECEIVED TO DATE (15/03/2013) =

WAY FORWARD Currently DoL is capturing the applications received for processing On an on going basis, letters demanding additional information forwarded to the farmers immediately during the capturing Farmers will be informed of the outcome as soon as processing of the application has been finalized 15