Labour Law Conference 2011

Is there a Future for Collective Bargaining

in South Africa?

Johann MareeUniversity of Cape Town

Core of IR and CB in SA

The Industrial Conciliation Act of 1924 has been at the core of South Africa industrial relations and collective bargaining for the past 87 years.

It has been amended several times and changed its name to the Labour Relations Act in 1981. However, in essence it has remained the same.

Core of IR and CB in SA

The Industrial Conciliation Act of 1924 has been at the core of South African industrial relations and collective bargaining for the past 87 years.

It has been amended several times and changed its name to the Labour Relations Act in 1981. However, in essence it has remained the same.

Industrial Councils played central role, but were deeply flawed

At the heart of the IC Act has been the establishment of industrial councils.

However, there was a fundamental flaw in the IC Act. It excluded Black Africans from the definition of employee. They could therefore not belong to registered trade unions and were excluded from ICs. This lasted until 1979.

Industrial councils take off

Industrial councils were rapidly formed. They reached their peak in 1983 when there were 104 in operation.

The councils varied enormously in size from large national councils to small local ones.

Collective bargaining in ICs Centralised collective bargaining

took place on Industrial Councils. They negotiated wages and working

conditions of all the employees represented by the unions and employers’ associations.

The Agreements could be extended to cover all employees in an industry in the region covered by the IC.

Durability of the councils

This arrangement suited large companies and registered trade unions on the councils as it prevented the undercutting of wages by small companies and non-unionised workers.

This has been the key factor explaining the durability of the industrial council system.

Post-apartheid collective bargaining

In 1995 a new LRA was passed. It extended collective bargaining rights to almost all employees including civil servants. It reconstituted industrial councils as bargaining councils and made provision for public service bargaining councils.

Trends in Bargaining council

coverage The number of bargaining councils

declined by more than half from 1983 to 2004. In spite of that the number of registered employees covered by BCs more than doubled over the same period.

The drastic rise in employees covered by BCs between 1995 and 2004 was due to the establishment of four large public service bargaining councils.

Table: Trends in bargaining council

coverage

Year Number of Councils

Total registeredemployees covered

1983 104 1 171 724

1992 87 735 533

1995 80 823 823

2004 48 2 358 012

Private sector industrial councils decentralisation 1978 - 1992

During this period the number of national and regional industrial councils declined.

This was due to the fact that Black unions deliberately collapsed some of the industrial councils.

In this they were assisted by employers who favoured deregulation.

Private sector bargaining councils centralisation 1992-2004

During this period the number of regional, local and single company councils declined while the number of national councils increased.

This was due to the merger of some regional councils into national councils because of pressure from strong national unions, and the collapse of smaller councils.

Level 1978 % 1992 % 2004 %

National 13 13 7 9 13 30

Regional 52 51 33 43 14 33

Local 31 30 31 40 15 35

Single Company

6 6 6 8 1 2

Total 102 100 77 100 43 100

Private sector bargaining councils by level of centralisation 1978, 1992 & 2004

Coverage of bargaining councils in 2004

In 2004 bargaining councils covered only 20.3% of employed labour force. The proportion of employees covered by the extension of agreements was 2.9%.

Only the transport, services and manu-facturing industries (in that order) have strong bargaining council coverage.

Collective bargaining outside bargaining councils

There are two large centralised bargaining forums: the Chamber of Mines and National Bargaining Forum in the motor assembly industry.

Plant- and company-level bargaining has declined since the mid-1980s although there is extensive company-level bargaining in the retail trade.

Contemporary Challengesfaced by Collective Bargaining

Strikes

Strikes in South Africa since political transformation in 1994

At first it was thought that strikes had declined in frequency and intensity after the democratisation of South Africa in 1994.

There was a trend towards fewer working days lost due to strikes after 1994 up to 2006.

Strike intensity explodes

Then, in 2007, and again in 2010, South Africa experienced the most disruptive strikes in its history.

The number of workdays lost due to strikes averaged 1.8 million per year from 1994 to 2006.

In 2007 it shot up to 12.9 million and in 2010 to 16 million work days lost.

Work days lost due to strikes1979-2010

0

2000

4000

6000

8000

10000

12000

14000

16000

1979 1984 1989 1994 1999 2004 2009

Work days lost(1000s)

Reason for rise in work days lost in 2007 and 2010

The increase in work days lost was mainly due to massive strikes by public service unions in 2007 and again in 2010.

The bargaining unit in public service is enormous and this makes it extremely difficult to reach a settlement.

Sectoral BC Total Union Membership in Sectoral BC 2007

Public Health & Welfare PHSDBC TOTAL 268 700Education ELRC TOTAL 370 548Safety and Security SSSBC TOTAL 152 189General Public Service GPSSBC TOTAL 237 968 GRAND TOTAL 1 029 405

Public Service Trade Union Membership by Sectoral Bargaining Council in the Public Service Coordinating Bargaining Council

Trade unions in Public Service Coordinating Barg.

Council 1

SADTU – SA Democratic Teachers’ Union

NAPTOSA – National Professional Teachers’ Organisation of SA

NEHAWU – National Education, Health and Allied Workers’ Union

DENOSA – Democratic Nurses’ Organisation of SA

Trade unions in Public Service Coordinating Barg. Council 2

POPCRU – Police and Prisons Civil Rights Union

SAPU – SA Police Union PSA – Public Servants Association ‘COMBO’ – a combined trade union

made up of health and other services, teachers, public and allied workers.

Contemporary ChallengeNumber 2

Unemployment

Unemployment in South Africa The level of unemployment in South

Africa is extremely high and has been so for many years. Goes back to 1960s.

The official unemployment rate in 2010 was 25%, but this figure excludes discouraged workers.

Including discouraged workers, the rate of unemployment in 2010 rises to 33%.

Bargaining councils and unemployment

Many employers, especially those running small businesses, maintain that bargaining councils contribute to unemployment because of the extension of agreements.

However, only a small proportion (2.9%) of all employees are covered by extensions and exemptions are generally granted when firms apply.

Bargaining councils and compliance

Of late, compliance with bargaining council agreements has become an unemployment issue.

A survey in 2010 by the National Bargaining Council for the Clothing Manufacturing Industry found that 558 or 53% of 1058 registered firms were non-compliant. Between them they employed 15 000 people.

Non-compliant Newcastle firms threatened with closure

A writ was served on 47 offending firms in Newcastle who were paying between R90 and R120 per week. The minimum wage in non-metropolitan areas was R334 per week at the time.

The writ required the firms to pay the minimum wage or face being closed. The 47 firms employed 4000 people.

Appeal and compromise:a moratorium

The firms appealed to the government and a moratorium was declared.

A compromise was worked out: firms had until 31 March 2011 to pay 70% of the minimum wage, 1 January 2012 to be 90% compliant and 100% by 30 April 2012.

Firms still not compliant:Bargaining council acts

At the end of March 2011 more than a third of 192 firms surveyed were not yet paying 70% of the minimum wage.

Consequently 4 factories, 2 in Durban and 1 each in Newcastle and QwaQwa were closed down.

The National Bargaining Council has threatened to close more factories.

How to move to fair collective bargaining with security

To ensure fair wages and preserve employment there has to be more flexibility: regulated flexibility.

The greater flexibility must not be at the expense of insecure workers. The solution is a policy of flexicurity as practised in Denmark.

How to move to more peaceful collective bargaining

The bargaining unit in public services has to be “downsized and rightsized” into appropriate bargaining units.

The public service must adopt interest arbitration in sectors where innocent parties like patients and learners suffer during a strike.