Finweek English Edition - - THE WEEK - Editorial@fin­

Writ­ten con­tracts Paid leave Per­ma­nent con­tracts Bar­gain­ing coun­cil cov­er­age No wage bar­gain­ing of any form

tripled be­tween 1994 and 2014, show­ing that unions

Over and above this pre­mium, many union mem­bers are also cov­ered by in­dus­trial bar­gain­ing coun­cil agree­ments. The Labour Re­la­tions Act stip­u­lates that a col­lec­tion of firms and unions may jointly ne­go­ti­ate in­dus­try-spe­cific terms of en­gage­ment on a more macro level. In this sce­nario bar­gain­ing power in­creases as many stake­hold­ers en­gage in these meet­ings.

Should such agree­ments cover a sub­stan­tial num­ber of work­ers, the min­is­ter of labour en­joys the pre­rog­a­tive to ex­tend the stip­u­la­tions to an en­tire in­dus­try or re­gion, re­gard­less of whether firms or work­ers’ rep­re­sen­ta­tives par­tic­i­pated in the ne­go­ti­a­tions.

As the ta­ble shows, public-sec­tor em­ploy­ees en­joy greater ben­e­fits from this bar­gain­ing mech­a­nism: about 35% of public-sec­tor union work­ers re­port that they ad­di­tion­ally ben­e­fit from bar­gain­ing coun­cil ne­go­ti­a­tions, com­pared with only 8.2% of pri­vate-sec­tor union mem­bers.

Not only is cov­er­age greater in the public sec­tor, but so are the wage ben­e­fits: public-sec­tor union mem­bers who are also cov­ered by bar­gain­ing coun­cils en­joy a 22% wage pre­mium com­pared with only 16% in the pri­vate sec­tor.

The ben­e­fits of union­i­sa­tion and col­lec­tive bar­gain­ing are there­fore far more pro­nounced in the public sec­tor. This un­der­lines the gov­ern­ment’s com­mit­ment to im­ple­ment­ing its poli­cies among its own em­ploy­ees.

Unionised public-sec­tor work­ers are also far more likely to have se­cure work­ing con­di­tions than pri­vate-sec­tor and non-unionised work­ers. As shown in the ta­ble, all union mem­bers in the public sec­tor have a writ­ten em­ploy­ment con­tract, while fig­ures are slightly lower in the pri­vate sec­tor.

De­spite im­prove­ments in con­tract cov­er­age for nonunionised work­ers over time, mem­bers still have greater job se­cu­rity (as seen in the graph be­low). The ta­ble also shows Non-union 83.3% 62% 57.6% 2.8% 82.3% that more than 90% of unionised work­ers (in both sec­tors) re­port that they re­ceive paid leave ben­e­fits and that the na­ture of their con­tracts is per­ma­nent, rather than in­se­cure and tem­po­rary. Unions are there­fore highly ef­fec­tive at trans­lat­ing the pre­scrip­tions of the law into real ben­e­fits for their mem­bers.

Non-unionised work­ers do not en­joy these ben­e­fits to the same ex­tent. But in the public sec­tor the dis­ad­van­tage of not be­ing a union mem­ber is greater. So the in­cen­tive to par­tic­i­pate is clear. Re­cent analysis goes as far as to sug­gest that unionised public-sec­tor em­ploy­ees now con­sti­tute a new “labour elite”.


Union 98.4% 92.5% 91% 8.2% 8.3% Non-union 99.7% 54.3% 38.9% 11.4% 72.7%

in­flu­ence in the work­place.

Amend­ments to the Labour Re­la­tions Act in 2015 stip­u­late that low-paid tem­po­rary work­ers be­come per­ma­nently em­ployed af­ter three months of work. This pro­vi­sion has been put in place to avoid firms by­pass­ing labour laws through high staff turnover. While the ef­fects are yet to be seen in of­fi­cial statis­tics, this has broad im­pli­ca­tions for labour bro­kers and out­sourced work­ers. If en­force­ment is poorer in some sec­tors than others, this leg­is­la­tion may not have the full in­tended ef­fects with­out ad­di­tional mon­i­tor­ing and union in­volve­ment. But, if cur­rent trends con­tinue to sup­port higher lev­els of writ­ten (and par­tic­u­larly per­ma­nent) con­tracts, the leg­is­la­tion could en­hance job se­cu­rity.

Union fed­er­a­tions are also lead­ers in the cam­paign for a na­tional min­i­mum wage. Cur­rently, the se­lec­tive sec­toral min­i­mum wages do not gen­er­ally put pres­sure on un­em­ploy­ment. In­creases in wages of bet­ter-paid work­ers – typ­i­cally cov­ered by col­lec­tive bar­gain­ing agree­ments – do, how­ever, tend to place a bur­den on job cre­ation. The bal­ance be­tween unions’ ob­jec­tive to main­tain liv­ing wages and fair­ness for work­ers and job loss re­mains crit­i­cal for fu­ture de­bate.

Over­all, unions in co-op­er­a­tion with gov­ern­ment al­liances – and also in col­lec­tive ne­go­ti­a­tion with busi­ness – have played an im­por­tant role in im­prov­ing both pay lev­els and job se­cu­rity. While neg­a­tive macroe­co­nomic ef­fects re­main de­bated, unions have gone be­yond their po­lit­i­cal man­date to im­prove con­di­tions of the work­ing poor in SA.

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