University of the Western Cape

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 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: • Organisationalrights • Voluntary collective bargaining • Workplace and Bargaining Council Collective Agreements • Right to strike and recourse to lock-out

9. 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) SectoralDeterminations • 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 Source : COSATU Organising Department, 2014

14. Minimum Wage by Sectoral Determination

15. Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages Source : Labour Research Service, 2013

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

17. Minimum Wages: 2012 Wage Agreements and Sectoral Determinations: Median Wages 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 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 sectoraldetermination” • Unpack levels of bargaining • Must move beyond the existing coverage of “standard employees”.

31. National Minimum WageA Cog in the Wheel of Human Development