De­wald van Rens­burg The big­gest in­ter­ven­tion in the labour mar­ket in 20 years could be to SA’s flail­ing bar­gain­ing sys­tem

CityPress - - Voices - Shore up bar­gain­ing coun­cils

The po­lit­i­cal im­pli­ca­tions of a na­tional min­i­mum wage are strangely ab­sent from the heated de­bates about what could be the big­gest labour mar­ket in­ter­ven­tion in two decades. The higher the na­tional min­i­mum wage gets set, the more it will en­croach on sec­toral de­ter­mi­na­tions and the bar­gain­ing coun­cils that al­ready set min­i­mum wages for much of the for­mal econ­omy.

That is no small thing when th­ese struc­tures are the ma­jor bat­tle­ground of eco­nomic ideas be­tween unions, business, aca­demics as well as in­creas­ingly ac­tivist out­side par­ties like the Free Mar­ket Foun­da­tion.

Par­lia­ment hosted work­shops on the na­tional min­i­mum wage this month after the ANC promised that it was a done deal, with only the “modal­i­ties” left to be sorted out.

The de­bate cen­tres almost en­tirely on real and imag­ined trade-offs be­tween jobs and bet­ter wages. The cru­cial ques­tion of what hap­pens to the ex­ist­ing wage-set­ting sys­tems seems to be a “modal­ity” be­ing left for a later stage.

When the na­tional min­i­mum wage re-emerged as a union de­mand in 2010 (it was shelved in the 1990s), there was an as­sump­tion that it would only cover the sev­eral mil­lion work­ing peo­ple for whom there still isn’t a min­i­mum wage at all.

That makes some­thing less than R2 500 a month the most ob­vi­ous tar­get for the na­tional min­i­mum wage – the level where the sec­toral de­ter­mi­na­tions con­verge.

That is if you as­sume that the in­ten­tion is to not fun­da­men­tally al­ter the in­sti­tu­tions where the eco­nomic bat­tles around liv­ing wages are tak­ing place.

Any­thing ap­proach­ing the much-cited liv­ing wage stan­dard of R4 800 or even R3 500 would have in­fin­itely more far-reach­ing ef­fects. It would mostly erad­i­cate the whole sec­toral de­ter­mi­na­tion sys­tem and prac­ti­cally over­take the wage-set­ting func­tion of bar­gain­ing coun­cils for all the lower-paid oc­cu­pa­tions.

Cover the un­cov­ered

Many staunch pro­po­nents of the na­tional min­i­mum wage still see “cov­er­ing the un­cov­ered” as fun­da­men­tally the point of the whole ex­er­cise, while leav­ing the sec­toral de­ter­mi­na­tions and coun­cils alone.

Fig­ures from 2011 put work­ers with sec­toralde­ter­mined wages at 3.5 mil­lion. Those with bar­gain­ing coun­cil-set wages are about 2.5 mil­lion – largely in the pub­lic sec­tor.

Many more work­ers are cov­ered by col­lec­tive bar­gain­ing at company level, but it is clear that the for­mal wage sys­tems are far from univer­sal.

Pro­fes­sor In­grid Woolard, chair of the Em­ploy­ment Con­di­tions Com­mis­sion (ECC), says: “I’m not sure that any­one knows ex­actly [how many peo­ple fall out­side the sys­tem].”

The ECC sets the sec­toral de­ter­mi­na­tions.

From her per­spec­tive, the ma­jor goal of a na­tional min­i­mum wage would be to “catch the em­ploy­ees who fall through the cracks” and re­place only the low­est ex­ist­ing sec­toral min­i­mums.

That solves another prob­lem with the wage sys­tem – it is con­fus­ing.

Know­ing what to pay

“I think small em­ploy­ers in par­tic­u­lar don’t nec­es­sar­ily know what they are sup­posed to be pay­ing,” says Woolard.

Work­ers are also of­ten un­aware of what, if any, min­i­mum wage ap­plies to them.

“If you work in civil en­gi­neer­ing, you are cov­ered by a bar­gain­ing coun­cil agree­ment, but if you work in con­struc­tion, there is no min­i­mum wage,” she says.

The way things are turn­ing out in­di­cate this op­tion is the fur­thest thing from the role play­ers’ minds.

“The na­tional dis­course seems to as­sume a [much] higher na­tional min­i­mum wage than cur­rent sec­toral de­ter­mi­na­tions – this is com­ing both from or­gan­ised business and or­gan­ised labour,” says Woolard.

If a blan­ket na­tional min­i­mum wage over­took sec­toral de­ter­mi­na­tions, it is hard to imag­ine what mech­a­nisms would get called on in a sit­u­a­tion like the

The prac­ti­cal im­por­tance of the na­tional min­i­mum wage would be in­fin­itely greater if the wage was high enough to af­fect how the bar­gain­ing coun­cils op­er­ate.

Cosatu sees the na­tional min­i­mum wage as fun­da­men­tally tied to an over­haul of cen­tral bar­gain­ing, not just a method to cover the un­cov­ered.

That would re­quire a na­tional min­i­mum wage closer to R3 500, which would over­take the low­est wages set in ma­jor bar­gain­ing coun­cils like the Met­als and En­gi­neer­ing In­dus­tries Bar­gain­ing Coun­cil (MEIBC).

South Africa’s post-apartheid labour sys­tem was premised on wall-to-wall col­lec­tive bar­gain­ing through bar­gain­ing coun­cils cov­er­ing ev­ery in­dus­try.

That did not hap­pen and the push for a na­tional min­i­mum wage is partly a com­pen­sa­tion for this fail­ure.

To­day, the sec­toral de­ter­mi­na­tions are by far the big­ger wage-set­ting mech­a­nism, while bar­gain­ing coun­cils in the pri­vate sec­tor are flail­ing.

Em­ployer groups are try­ing to un­der­mine the coun­cils that they feel are the in­stru­ment of only the largest em­ploy­ers and unions.

On the other hand, the coun­cil sys­tem is strug­gling to ac­com­mo­date de­vel­op­ments like out­sourc­ing, which blur the lines be­tween “sec­tors”.

In a de­tailed re­port writ­ten late last year, Cosatu strate­gist Neil Cole­man em­pha­sised that the na­tional min­i­mum wage must go hand in hand with a re­form of the coun­cils.

Cole­man ar­gues for “statu­tory” coun­cils as op­posed to the vol­un­tary ones South Africa has to­day.

The fact that em­ploy­ers need to vol­un­teer for a bar­gain­ing coun­cil to ex­ist, as well as the lack of a ba­sic min­i­mum floor for wages in sec­tors that are cov­ered by coun­cils, lays the ground for “con­ces­sional” bar­gain­ing, says Cole­man. This is when em­ployer groups use the con­tin­ued ex­is­tence of the bar­gain­ing coun­cil as a bar­gain­ing chip dur­ing wage talks.

This is what led cloth­ing union Sactwu to agree to wage cuts in 2011, Cole­man says.

De­mands for a more se­vere wage cut are now at the cen­tre of a bat­tle in the MEIBC where the Na­tional Em­ploy­ers’ As­so­ci­a­tion of SA is mak­ing ever more cred­i­ble threats to in­def­i­nitely dead­lock the coun­cil.

A na­tional min­i­mum wage could re­move the whole is­sue of “en­try-level” wages from the pic­ture and leave the coun­cils to get on with the re­ally trans­for­ma­tive ne­go­ti­a­tions around work­ing con­di­tions, says Cole­man.

In ef­fect, the gov­ern­ment would be draw­ing a line un­der all the cur­rent ef­forts to lower un­skilled wages in in­di­vid­ual sec­tors.

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