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Ineffective direct state intervention in the labour market

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Although collective bargaining is the cornerstone of the South African system of labour law, there are residual provisions for direct state intervention, in particular in relation to ‘vulnerable’ workers. This sub-section focuses on sectoral determinations, which offer very limited protection to workers, and on the weak enforcement capacity of the Department of Labour. Not only is protection minimal, it is often elusive.

Sectoral determinations set minimum conditions of work and pay for sectors where there are no bargaining councils, usually reflecting the weakness of unions, as well as documented exploitation; they have concerned sectors such as forestry, agriculture, domestic work and security.8 The establishment of minimum wages seems to have helped increase sometimes extremely low nominal wages, but case studies suggest that employers have found ways to counter wage increases by shifting to hourly or task payment, or reducing other benefits (Murray and Van Walbeek 2007). Sectoral determinations have thus resulted in increased casualisation because they are not monitored by trade unions, and also because of poor enforcement mechanisms (see below).

As Coleman (fortcoming) puts it: ‘(t)he system of sectoral determinations … is both partial (only covering some low paid sectors), uncoordinated, with big variations in the minima, and without any coherent rationale in terms of the basic subsistence needs of workers.’ Indeed, as illustrated in Figure 2 below, the minimum wages set in this way tend to be very low, with an average of just above R2 000 per month. Increasingly, the minimum becomes the benchmark, with wages hoarding around the regulated minimum wage. In other words, even if it was implemented rigorously, direct state intervention in the labour market would hardly manage to uplift poor workers.

There is, moreover, a severe lack of enforcement of labour regulations. It is striking that in 2007, four years after the adoption of a sectoral determination for agriculture, 28 per cent of workers were paid below the minimum wage, and that 36 per cent still did not have written contracts (Bhorat et al. 2012). In a recent study of Gauteng horticulture, Nkosi (2013) finds that most workers are unregistered immigrants who ‘do not have rights’. This poor compliance on the part of employers is related to the weak enforcement (inspection) capacity of the Department of Labour. As Stanwix (2013) argues: ‘[in] agriculture, the risks [associated with non-compliance] have been low and the penalties light.’ Inspectors are tasked with monitoring and enforcing compliance with the Basic Conditions of Employment Act and sectoral determinations, as the state does not monitor agreements emerging from collective bargaining (which are supposedly monitored by BCs themselves). While the violence inherent in some sectors probably deters inspections (as in the collective taxi sector), there are many suggestions that the South African labour inspectorate is slow and ineffective. Research into why this is the case, and how the deficiencies of such an essential function can be fixed, is urgently warranted, for many South African and foreign workers have no one else (hence, often, no one) to turn to in case of abuse.

Figure 2: Minimum wage levels in sectoral determinations in rands per month, 2013-14


Source: Department of Labour, various documents available at http://www.labour.gov.za/DOL/legislation/sectoral-determinations.

Note: Domestic A & B correspond to different geographical areas; Hospitality >10 & <10 refer to enterprise size. For Security, the minimum wage indicated is for the category ‘general worker’, applicable after six months of service; for Wholesale it is for a ‘general assistant’; and for Taxi it is for ‘workers not elsewhere specified’.

As a result of the limited scope of bargaining councils, as well as the limited coverage of sectoral determinations, the extent to which minimum conditions are in fact regulated is at best uneven. Combined with poor enforcement capacity, this produces a striking picture of an inefficient legal framework at odds with the widespread perception. Overall, state intervention in the labour market mirrors the inefficiency of collective bargaining in defending workers against employers.

The new labour law regime in South Africa was inspired by ‘corporatism’. The central idea was that it was going to protect workers thanks to strong trade unions negotiating conditions in centralised bargaining councils. This was consistent with demands by Cosatu unions dreaming of a ‘mixed’ economy based on co-determination – but capital wanted none of it. The pervasive increase in atypical employment has entailed an erosion of trade union ability to protect workers and take advantage of many of the provisions of the new legal framework.9 The workplace strength of unions has been seriously dented with the transition to democracy, with many union cadres taking up jobs in government and the private sector, thus enhancing unions’ political influence – what Buhlungu (2010) calls the ‘paradox of victory’. This happened at the very moment when workers needed to be defended in the context of widespread restructuring; thus, while unions retain power in certain sectors, they have not prevented widespread casualisation, even in the public service (Hassen 2005).

The weakening of trade unions in post-apartheid South Africa has to a large extent been masked by two phenomena: the participation of unions in the ruling Tripartite Alliance, and the massive unionisation of workers in the public sector which has prevented a collapse in the number of unionised workers (standing close to 3.1 million out of a total workforce of 13.5 million – see Macun, in this volume) while accelerating sociological and political evolution in Cosatu. This may explain why unions have failed to respond to capital’s systematic dodging of the new labour relations regime which they promoted. Rather than ‘co-determine’ anything with their workers, most employers have turned (often starting in the 1980s) to externalisation and casualisation.

New South African Review 4

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