Presentation to the Portfolio Committee on Tourism 31 August 2010

1. Presentation to the Portfolio Committee on Tourism 31 August 2010

2. Purpose Introduction and background Legislative framework Daily Inspections Scope of the Inspections per clauses Minimum wage levels Commissions Calculation of wages Information concerning pay Structure of the presentation

3. Scope of the Inspections per clauses Deductions & other acts concerning remuneration Written particulars of employment Compressed working week Work on Sundays Night work Daily & rest period Recommendations Structure of the presentation

4. What are the historical facts? Tourist destination of choice . It is a 1st contact point and exit contact point for tourists The sector consists of very small, micro & medium businesses Background

5. Hospitality is one of the growth engines of SA economy. The 4th largest generator of GDP, following manufacturing, mining & quarrying. The sector is “booming” & sustainable. Background

6. The tourism sector plays a significant role not only in the economy of the country but also building a positive image of our country. Hospitality industry is one of those which supports tourism in the country. Internationally there is a growing demand for patrons to support establishments that respects and uphold human rights and dignity of workers In order to protect the image of the sector, sound Labour Relations are very important. Introduction

7. To respond to a request from the Portfolio Committee for the Department to share information on: Assessment of the conditions of employment in Tourism sector prior to the 2010 Fifa World Cup findings and recommendations in terms of building Tourism sector in South Africa Purpose

8. A Sectoral determination was introduced in terms of the BCEA, to set minimum conditions of employment and wages Compensation for Occupational Injuries and Diseases Act (COIDA) Occupational Health and safety Act Unemployment Insurance Act. Legislative Framework

9. Through our daily inspections a total of 2622 establishments were visited in the hospitality sector in the first quarter of the financial year 2010/11. Out of which 1493 complied with the legislation. There was a 56% non-compliance. Daily inspections

10. We have identified hospitality industry as one of the high risk and problematic sectors to be inspected for this financial year 2010/11 2583 inspections were conducted with 1377 employers found to be complying with legislation During our inspections, the following observations were made on the following: Clause 2: Minimum wage levels Clause 4 : Calculation of wages Clause 6: Information concerning pay Clause 7:Deductions and other act concerning remuneration Clause 8 Written particulars of employment Clause 12: Compressed working week Clause 14: Work on Sundays Clause 15 Night work. Clause 17 Daily and rest period Hospitality Blitz inspections

11. Employers are not aware of the annual increases and this would lead to underpayment of salaries. Undertakings were issued for the correction of this bad practice. Clause 2: Minimum wage levels

12. Although the majority of restaurants employ on a commission basis they neglect to ensure that the employee still gets the minimum wage in the event where the commission earned is not the same as the minimum wage. The commission structure is sometimes written in such a way that the employee would not understand and this creates huge confusion. Clause 3: Commission.

13. Employers have a tendency of calculating the wages on a monthly basis thus having a fixed number of hours per month irrespective of how those Clause 4 : Calculation of wages

14. Hours were accumulated. Although the normal hours of work are stipulated in the contract of employment the only time overtime would be considered is when those fixed hours for the month has been exceeded. Employers have been asked to fix this problem with the payroll administrators and not use that as an excuse. Claims for overtime were submitted to the employer Clause 4 : Calculation of wages

15. Although pay slips are issued to employees the information supplied on the pay slip are problematic. No clear breakdown is provided on hours of overtime or public holidays worked. When interviewing employees it was clear in most cases that they had no clear indication of how the employer came to amount paid out. Clause 6: Information concerning pay

16. When employers issued uniforms and work clothes they would deduct a certain percentage of the employees’ salary and keep it as a security in the event that the employee absconds. The act is clear that under no circumstances can an employer require or permit an employee to pay the employer in respect of the supply of any work clothing. This was addressed with employers to correct the misunderstanding and repay employees. Clause 7:Deductions and other act concerning remuneration

17. When employees commence employment they are offered contracts of employment but they are not provided with copies for there safekeeping. This would lead to unnecessary friction when both parties are interviewed by the inspector as he/she would get different interpretations of the content of the contracts. Employers were issued with undertakings to ensure this is corrected. Clause 8 Written particulars of employment

18. Employers would request workers to work two shifts per day with a rest period of 4 hours in the event of other workers being absent. They would then average the hours to 45 hours in the week. This is a contravention in terms of the rest period of 12 consecutive hours in terms of Clause 17. Employers were instructed to stop this practice immediately as it creates a high risk of injuries occurring due to fatigue. A clear explanation was given on how to interpret this part of the SD. Clause 12: Compressed working week.

19. Employers still regard Sunday worked as an ordinary day in terms of payment made for that day worked although Clause 14(d) is clear in that it must be paid at one and a half times the employees wage for that Sunday worked if the employee ordinarily works on a Sunday. This wrong perception is due to the interpretation of the old wage determination for this sector. Clause 14: Work on Sundays

20. This industry requires that a high number of staff members are available to perform night work, however employers would not compensate for these hours worked and it was explained to them that there must be an agreement between the two parties on the amount or time off in lieu of the night work. Clause 15 Night work

21. As explained under clause 12 the rest periods of twelve hours is not adhered to due to absenteeism. The employers were requested to find alternative ways to deal with the problem instead of asking the same person(s) who worked earlier in the day to return in place of the absent worker(s). This was especially prevalent in restaurants and kitchens where only one cook/chef is present Clause 17 Daily and rest period

22. Occupational Health and Safety In most cases, the contraventions pertained to the non-existence of electrical certificates of compliance as well as housekeeping. COIDA Non-registration of COIDA was addressed with employers and undertakings issued for correction. Continued….

23. Unemployment Insurance Act In most cases, the contravention was around non-registration and the inability to provide proof of payment. Undertakings were issued to those who contravened the Act. Continued….

24. We therefore need to make sure that this sector encourages all the industries or entities that are crucial in supporting its growth to ensure that workers rights are observed. This will surely galvanized every one to support efforts to boost tourism in the country. Recommendations in terms of building Tourism sector in south Africa

25. We also recommend that joint inspections with relevant enforcement agencies should be conducted in order to promote an integrated approach in ensuring compliance to legislation and uphold good Labour standards. Its when we all work together that we can achieve more. Recommendations in terms of building Tourism sector in south Africa (Cont..)

26. Thank you