Download A Retail Perspective

Labour Relations Bill
Basic Conditions of Employment Bill
Submission to the Portfolio Committee on Labour
25 July 2012
Overview
1. Retail Association in Context and General
2. Labour Relations Bill
1. Equal Treatment Provisions
2. Collective Bargaining Issues
3. Basic Conditions of Employment Bill
1. Increases on Actual Rates of Pay
2. Compliance and Enforcement
4. Conclusions
July 2012
Retail Association in Context
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Member of BUSA and align with the BUSA submission
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Represent large national and specialist retailers
– Directly employ 223 819 employees
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Wholesale and Retail Sector
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22.8% of national employment (largest employer)
46% of employment growth between 1995 – 2010 (economy as a whole was 6% )
3rd largest contributor to GDP
Facilitates access to domestic market for manufacturers
Bridge between formal and informal sector
Low barriers and a portal for entry particularly for
– Small business
– Employees seeking first time work experience (youth, women, black people, with rural and
urban spread)
July 2012
General
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Policy imperatives
– Create and retain jobs to address poverty and income inequality
– Address abusive practices that exclude those who do not enjoy full protection of the law
– Promote decent and productive work and sustainable enterprises
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Policy choices made in the Amendments will erode current and prospective
employment and growth within the retail sector
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Directly increase cost of employment
Require significant reorganisation of work
Create instability and uncertainty
Trigger workplace conflict
Necessitate complexity, administrative burden and legal processes
Concentrate employment among fewer people
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Contrary to international norms and current trends in international responses,
particularly given prevailing economic conditions
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Better policy choices are available
July 2012
LABOUR RELATIONS BILL
Equal Treatment - Part Timers
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Part time work is now included
– not in the 2010 Bill, unclear policy objective and far exceeds any international standards
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Within retail, part time employment is fully regulated and enforced
– Governed by a Sectoral Determination which provides for minimum pay, hours of work, leave and
other protections.
– Paid a premium minimum wage for lesser hours
– By choice can elect under 27 hours a week to earn wages in exchange for leave
– Covered by all labour legislation – OHSA, EEA, UIF, COIDA, LRA and BCEA
– Have long term work security
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Regulatory framework has promoted employment, decent work and provides critical
flexibility for variable trading patterns.
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Amendments will erode current and prospective employment and business
competitiveness.
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Particular impact on Part Time employment, given the Sectoral Determination and history
in the sector.
July 2012
LABOUR RELATIONS BILL
Equal Treatment - Impact & Options
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99 291 of the 1.3 million part time workers in South Africa are employed by our Retail
Association members
– Historical employment and bargaining has resulted in full time employment which includes many
additional, non-statutory benefits such as Healthcare and Pension, additional leave and other
payments.
– Part time workers enjoy statutory benefits, and more limited access to other benefits.
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Amendments require retailers to make significant changes
– Restructure their workforce , remuneration, contracts, employment scheduling and process
– Increase cost of employment by 5 – 102%
– Impact on Competitiveness:
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Reduce non-statutory full time benefits
Consider retrenchment of comparable full time workers (exacerbated by the uncertainty of the wording of
the amended provision of s187)
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Race to the bottom - massive cost, complexity, administrative burden, and a litigation
floodgate
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Better policy options are available
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Part time workers: premium payment in Sectoral Determination
Fixed term and labour broker employees : graduated rights after 12 and 18 months
July 2012
LABOUR RELATIONS BILL
Industrial Peace and Workplace Democracy
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Shop Floor Representivity will be destabilised and this will erode existing collective
bargaining arrangements and majoritarianism in the sector
– Previously majority rights and thresholds can now be obtained by minority unions
– BCEA Amendment thresholds can also override workplace agreements
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Sector Representivity and Centralised Bargaining promote minority at the expense of
the majority
– Extension of minority agreements
– Statutory councils
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Access to 3rd party premises as provided for will
– Increase intimidation, injury and harm
– Result in more damage to property
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Current provisions in the law should remain
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Public interest and strike violence provisions
– insufficient in practice and law
July 2012
BASIC CONDITIONS OF EMPLOYMENT BILL
Adjustments to Actual Pay
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New provision allows the Minister to regulate minimum increases of remuneration
above the minimum pay
– No upper earning limits
– No exceptions based on economic conditions, productivity or performance, new entrants.
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Significant Impact on:
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Cost of employment and remuneration strategy
Collective bargaining arrangements and Union membership
Inspections and Enforcement
Administrative obligations – document control
Privacy of information issues
Retail Business models and competitiveness
Will trigger ‘race to the bottom’ behaviour
Regulatory impact not considered
Additional gains should rather remain within the scope of
– Bargaining and Sectoral Determinations
– Possible exception for Domestic Workers only
July 2012
BASIC CONDITIONS OF EMPLOYMENT BILL
Compliance and Enforcement
• Amendments provide for a one-step process of enforcement (previous 5-step process)
• No pre-legal recourse prior to the matter going to Court
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Contrary to principles of alternative dispute resolution
Legal expenses excessive and takes significant time
Damaging to the relationship
Limited by-in and win-lose outcomes
Contrary to principles of ILO Convention 81, Art 3
• Attempt to secure enforcement
• Supply technical information
• Bring to the notice of authorities defects / abuses
– Court cannot substitute for well resourced, professional and competent inspectorate
– Retail experience of inspectorate – extensive training and skill inconsistency
– Regulatory impact not considered
• Better solution would be to:
– Build capacity of inspectorate
– Keep undertakings compulsory
– Keep one of the pre-Court processes
July 2012
Conclusions
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Focused on provisions with the highest impact on retailers
– Each retail model is different
– Small business must be considered
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Within Retail, Amendments will:
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Result directly and indirectly in the loss of jobs
Concentrate employment among fewer people
Increase uncertainty, litigation and administrative burden
Negatively impact on efficiency and adaptability
Restrict growth in employment and economic growth
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Labour law framework based on security and flexibility with minimum standards,
and collective bargaining for increased gains is as relevant now as it was in 1994.
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Submit
– Impact on economy, jobs and the labour market in general must be considered
– Better policy options are available
July 2012