New Labour Law will be a major setback for workers

Cosatu march against state capture in Johannesburg in September.

On 17 November 2017 three bills were gazetted that propose major changes to the rights of workers through amendments to the Labour Relations Act and the Basic Conditions of Employment Act, as well as the introduction of the National Minimum Wage bill. Taken together these bills represent the rolling back of hard won rights for workers.

Johannesburg, Gauteng, South Africa

Analysis:

One of the most important rights for any worker is the right to strike, a right that is constitutionally protected. The proposed amendments to the Labour Relations Act (LRA) will see a series of measures which, although designed to minimize the prospect of violent strikes, will in practice discourage strikes. For example, the amendments will require trade unions to hold secret ballots to decide on strike action. By individualising the decision to strike, the secret ballot fundamentally undermines the collective nature of strikes. Even if workers do successfully hold a secret ballot, the obstacles to having a protected strike do not stop there.

The LRA amendments allow for the extension of the conciliation period from 30 days to 35 and provide for the establishment of an advisory arbitration panel to resolve strikes. An advisory arbitration panel will be led by a senior commissioner of the Commission for Conciliation, Mediation and Arbitration (CCMA) and it will have the power to make resolutions to resolve the dispute and the strike. If unions do not indicate rejection of the proposed resolution then it becomes binding and the strike must end. An advisory arbitration panel can be established if the Minister of Labour or the Director of the CCMA deem it to be in the ‘public interest’ or if it is requested by any party to the dispute.

The proposed amendment sets out criteria for ‘public interest’ that are so wide, almost any strike could be subjected to advisory arbitration. Employers will in addition, have the right to request advisory arbitration which will obviously be in their interests to do.

On top of this, trade unions can be interdicted throughout procedures. If passed, protracted strikes such as the 2014 platinum strike would be unlikely to ever happen again. By curtailing the most powerful tool available to workers the likelihood is that South Africa’s vast inequality will continue to deepen.

Show us the money

While much has been made of a national minimum wage (NMW) of R3,500, the details of the bill reveal a different picture. There will be no monthly minimum wage, only an hourly minimum wage of R20 p/h. For those that work flexible hours or part-time will not earn R3,500 if they work under 40 hours a week. If you’re a domestic or farm worker it is worse: farm workers will earn R18 p/h, while domestic workers will receive only R15 p/h. Only in 2020 will these workers receive the full minimum wage.

As many have pointed out, the NMW is far from a living wage. In 2012 those earning R3,500 or less were already considered to be ‘working poor’. With rapid rates of inflation such a low wage will be stretched even further. But with an estimated 3.5-million workers currently earning less than R20 p/h, this should, in theory, represent a step forward for the poorest paid workers in the economy. However, things are unlikely to be that simple.

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An unenforceable National Minimum Wage

What has often been overlooked in the debates about the NMW is the fact that some sectors in South Africa, including domestic work and farm work, already have minimum wages, as prescribed in the sectoral determination. However, non-compliance by employers with existing minimum wages can be as high as 50%, as is the case within the agricultural sector. Based on current experience there is no reason to think that compliance with the NMW will be any different. The ability of workers to get justice, however,will become significantly more difficult.

If the proposed amendments are passed, the enforcement of the NMW will fall to the CCMA and not the Department of Labour, as is the case now. This will dramatically increase the scope of the CCMA’s work, in addition to its new responsibilities as part of the advisory arbitration panels. This will come at a time when the demands on the CCMA are already high, with an average of 745 cases referred to it every day in 2016 – 2017.

If a worker is being underpaid, under the proposed amendment, they will have to refer their case to the CCMA, which will have to proceed through the channels of conciliation and arbitration. The average time for a case to reach arbitration is 60 days but in the experience of the Casual Workers Advice Office it can take many more months for a case to reach arbitration. Even if a worker is successful and receives an arbitration award, experience demonstrates that many employers simply choose to ignore it. The next step is for the worker to have the award certified by the CCMA. If the employer still refuses to abide by the award the worker has to get a writ of execution, which is then served by a sheriff but often only after the demand for a deposit has been met. In 2016/2017, the CCMA had to assist 4,000 low-paid workers in getting a writ of execution. This figure excludes the presumably higher numbers of workers that had given up hope that their arbitration award would ever be enforced or did not know the CCMA could assist them to do so.

By making the CCMA the primary enforcer of the NMW the process is likely to become fraught with legal and practical difficulties that is likely to make the whole process unworkable.

An attack on hard won rights

What’s worse is that the proposed amendments to the Basic Conditions of Employment Act (BCEA), in order to accommodate the NMW, will actually roll back important rights for some workers. Sectoral determinations do not only prescribe minimum wages but provide important protections for workers, such as provident funds and other important rights. For example, the Farm Worker sectoral determination protects farm workers’ rights to housing. Amendments to the BCEA will effectively mean that the sectoral determinations will be phased out and replaced with the NMW Act. This could mean that the wages of workers currently earning higher wages through some of the sectoral determinations, such as Wholesale & Retail, could fall as well as the loss of other important rights and protections.

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How did it come to this?

You would have expected trade unions to have objected loudly to such fundamental changes to worker rights. But the bills being proposed were all negotiated at the National Economic Development and Labour Council (NEDLAC) by the leading trade union federations including Cosatu, Fedusa and Nactu.

The proposed legislation reflects the balance of class forces in South Africa today. Trade union membership has been declining and now only about a quarter of the workforce is unionised. Of those that are unionised the overwhelming majority are likely to be in full-time, permanent, professional or skilled employment, as the latest findings from the Cosatu membership survey show. The simple truth is that unions largely do not organise workers that will benefit from the NMW and are therefore indifferent to its practicalities.

The deal that unions appear to have made has been to compromise on the right to strike in order to bolster their power within bargaining councils. As trade union membership has been declining some trade unions have been at risk of no longer being representative of members as required by the law. The amendments alter the requirement of what is meant by representation.

Currently the employer organisations must employ the majority of employees and unions must have the majority of employees as members for collective agreements to be extended to non-union members. With the amendments, unions would not have to represent a majority of workers as long as the employer organisations employ the majority of employees for the Minister of Labour to extend collective agreements to non-party workers. This only serves to bolster the power of unions within sectors that have bargaining councils and allow greater scope for new bargaining councils to be established.

What is equally concerning is that the public have been granted less than 2 weeks to comment on bills that will make such fundamental changes to the rights of workers. If all of these proposed amendments become law it will be a significant setback for workers and their rights which were fought for so hard during and after the apartheid era.

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