1. University of the Western Cape
Presentation to the Portfolio Committee on Labour
Parliament of South Africa
Friday 12 September 2014

2. Social Law Project Vision Mission:
A South African society with a constitutional order, and a regulatory and institutional framework providing for empowerment and effective implementation of the rights of all working people, including non-standard workers
Mission:
To strengthen the movement for social and workplace justice through knowledge production that enhances institutional capacity and facilitates dialogue.

3. Presentation Outline Social Context Constitutional imperatives
Legislative Context
Minimum Wages
The value of work
The national minimum wage – the human development approach
Towards a national minimum wage – some issues

4. Context High levels of inequality and poverty
high levels of poverty and inequality between population groups
Racial, gender and age dimensions – African women most vulnerable
According to OECD inequality amongst highest in world
Gini co-efficient (2011) -0.69
Richest 20% consume 61%; bottom 20% consume 4.5%
45.5% classified as poor – 23 million

5. Context Contd. High level of unemployment
Unemployment rate 25.2%, among the highest in the world, second in the Medium Developed Group of countries, after xxxxxx
Lack of social cohesion – high levels of public protest, high levels of strike action

6. Constitutional Imperatives
Human dignity
Protection against unfair discrimination
Freedom of expression and association
Fair labour practices
Right to organise and bargain collectively
Access to social security including social assistance

7. Legislative Framework
Labour Relations Act (LRA)
Purpose:
To give effect to constitutional rights
To give effect to ILO obligations
To provide framework for bargaining on wages and other terms and conditions of employment
To promote orderly collective bargaining

8. Legislative Framework
Labour Relations Act (LRA)
Four pillars for achieving the purpose of the LRA:
Organisational rights
Voluntary collective bargaining
Workplace and Bargaining Council Collective Agreements
Right to strike and recourse to lock-out

9. Current wage bargaining arrangements
private sector bargaining councils 38
public service & Local gov bargaining councils 6
non-statutory bargaining forums
No. unknown, but estimated to be a few hundred
Total 7.2 million economically active employees : LFS grades 4-9
Councils in 8/9 industrial classifications (LFS)
2,3 million (32%) employees covered by bargaining councils
335, 000 ( 5%) covered by extended agreement
(Godfrey et al 2010)

10. Legislative Framework
Basic Conditions of Employment Act(BCEA)
Purpose
To provide for and enforce basic conditions of employment
To provide for sectoral determinations by the Minister of Labour, in respect of employees and employers not covered by bargaining council collective agreement

11. Legislative Framework
Basic Conditions of Employment Act(BCEA)
Sectoral Determinations
Forestry
Agriculture
Contract Cleaning
Taxi Operators
Civil Engineering ( Bargaining Council now registered)
Private Security
Domestic Workers
Wholesale and Retail
Hospitality
Learnerships
Children in performing arts, advertising etc
Under investigation:
Building
Funeral

12. Legislative Framework
Basic Conditions of Employment Act (BCEA)
Employment Conditions Commission
The ECC must take the following into account when making recommendations to the Minister
the ability of employers to carry on their business successfully
the operation of small, medium or micro-enterprises, and new enterprises
the cost of living
the alleviation of poverty
conditions of employment
wage differentials and inequality
the likely impact of any proposed condition of employment on current employment or the creation of employment
the possible impact of any proposed conditions of employment on the health, safety or welfare of employees
any other relevant information made available to the Commission.
BCEA - Section 54(3)

13. Minimum Wages: Sectoral Determinations
Min per hour
Min per day
(9 hour day)
Min per month
Domestic Work
8.30
74.70
Security Officer
11.74 -
Forestry
10.94
98.46
Farm
12.41
111.69
Contract Cleaning
14.19
127.71
Hospitality
12.39
111.51
Taxi
10.61
95.49
Wholesale & Retail
13.16
118.44
Civil Engineering
20.50
184.50
EPWP (Ministerial Determination)
8.82
70.59
Source : COSATU Organising Department, 2014

14. Minimum Wage by Sectoral Determination

15. Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages
Standard Industry Classification
Number of bargaining units
Estimated number of workers
Median Minimum Wage
Agriculture, hunting, forestry and fishing 37
1614
Community, social, and personal 22
4325
Financial intermediation, insurance, real estate…
111
207644
2755
Manufacturing
453
3578
Construction 24
2731
Mining and quarrying 80
4743
Transport, storage and communication 30
4778
Wholesale and retail
179
2782
Electricity, gas and water 3
38 641
7293
Total
939
3500
Source : Labour Research Service, 2013

16. Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages

17. Sectoral Determination 2260 Bargaining Council 3319
Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages
Sectoral Determination
2260
Bargaining Council
3319
Decentralised (Non-statutory)
3979
All Industry
3500
Source: Labour Research Service, 2013

18. Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages

19. The Value of Work ILO Decent Work Agenda Concept and goals
Work a source of income and personal dignity
Jobs of acceptable quality
Improved social protection
Promotion of social dialogue and tripartism
Country programme agreed in NEDLAC
“ Urgent need for national consensus on what constitutes a minimum wage and minimum level of living sufficient to meet the Constitutional guarantee of life and dignity and the need to develop wage policy on this basis” (SA Decent Country Work Programme, 2010, at page 8)

20. The Value of Work
Guiding concept “…work is valued for multifaceted reasons and serves multifaceted functions, some of which are clearly economic (understood in a restrictive sense of value added and remuneration) and many of which are not. It is in this range of values and functions, both economic and social, that we must seek to understand the place of employment within human development.” (Fischer: 2014 p4)

21. The Value of Work Social & Economic Value
In taking this position forward, in the exploration of a NMW, we would argue that it should locate itself within this range of functions. In support of Fischer’s argument, “A vital role of public policy within development is to strengthen progressive redistributive institutional mechanisms as means to cultivate resilience and positive synergies between social values of employment, and human and economic development.” (Fischer: 2014 p6)

22. The Value of Work Work as promoting wellbeing
“Occupational justice argues for society where people can develop their potential to participate fully in life, not just fit pre-established work roles” (Ross, 2007)
Occupations – as what “occupies” time, energy and resources has influence on wellbeing and Human Development
To what extent can domestic work be repositioned to promote wellbeing for all workers?

23. The Value of Work Human Development
The human development approach is a fundamental shift from market domination with its trickle-down effect to a more direct investment in human capital as the most valuable asset of any society. At its core, human development strategies are expected to result in a lower incidence of poverty and a greater degree of equality.
By bringing a human development perspective to existing initiatives, government can consolidate and bring coherence to its projects and programmes and explore and identify new ways of optimizing human development.

24. The Human Development Index
The Value of Work
Measuring Human Development
The Human Development Index
The human development index (HDI) is a composite measure that combines 3 dimensions:
Health
Education
Living Standards

25. The Value of Work Inequality-adjusted Human Development (IHDI)
IHDI measures the “loss” in potential human development due to inequality.
The global average loss is approximately 22%.
The country with the highest HD, Norway, had a loss of 6.6%, while the country with the lowest HD, Zimbabwe, had a loss of 29.9%.
South Africa, as a medium developed country, has a disproportionately high (31.2%) loss in potential HD, due to its high levels of inequality.

26. The Value of Work Occupational injustice
Domestic work not valued in comparison to other labour
The way work is constituted does not respect personhood
Domestic workers at risk of depression because of the way that work “occupies”
Minimum wage as opportunity to afford respect for what domestic workers do and defining realistic work expectations

27. A summary
Patchwork of overlapping bargaining councils, workplace bargaining and sectoral determinations – issue of representivity
No coherent wage policy to undo apartheid legacy
Increases levels of informal and unregulated work
Compliance and enforcement problems
High levels of inequality and poverty
Growing wage gap

28. Why a national minimum wage
Bridging the Wage Gap?

29. Why a national minimum wage
Contribute to reducing income inequality and poverty
Address existing wage fragmentation by way of uniform coverage
Provide protection to vulnerable workers
Simple and easy to understand and enforce
Serve as foundation for improvements to employment conditions through collective bargaining

30. Towards a national minimum wage: Recommendations
Foster public consensus on the concept including how figure is to be determined. Much work done already through institutes like SPII
Develop a wage policy as part of Decent Work ILO programme
Locate national minimum/a within overall wage framework
A new collective bargaining model ?
Coherent demarcation of sectors
Greater state support to NEDLAC, statutory and non-statutory bargaining fora, better equipped inspectorate etc
New section 55(8) – Minister can be supportive of establishing a forum “for employers and employees who are not covered by any other sectoral determination”
Unpack levels of bargaining
Must move beyond the existing coverage of “standard employees”.

31. National Minimum Wage A Cog in the Wheel of Human Development