Hundreds of employers marched in Durban’s Gale Street this week, alongside their workers this time. They were protesting against the clothing industry’s big guns whom they claim are forcing them out of business.
More than 700 of these small employers countrywide face jail terms and having their assets seized because the organised industry, the National Bargaining Council (NBC), representing 1 100 employers, is bringing compliance action, which threatens their survival, against them.
At the heart of the conflict are attempts by larger companies to force the extension of industry agreements on to non-member companies. This is allowed by the Labour Relations Act in order to extend worker rights but it is having the unintended consequence of encouraging greater joblessness.
The NBC, for the clothing manufacturing industry, has brought 716 non-compliance order nationally. While the targets of the non-compliance orders are generally smaller players, they nonetheless represent a significant workforce.
Cyril Govender, general secretary of the Cut, Make and Trim Employers Organisation (CMTEO), who led the march, estimates the average workforce for those facing non-compliance at an average of 60 employees each, meaning that more than 40 000 jobs can be lost should the orders be acted upon.
As cheap Chinese imports have flooded into the South African market, larger manufacturers have outsourced their production to cut, make and trim (CMT) manufacturers, many of whom pay lower wages than agreed by the established industry. The result has been a flood on non-compliance awards.
What is happening is that the clothing industry, already in crisis, is further eroding itself as employers fight each other in mini-turf wars.
NBC secretary Robbie Roberts says the council has 1 100 employers as parties representing 92 000 workers. Roberts says if employers do not comply, the law enables them to be liquidated by the NBC, their assets attached and for them to be jailed.
He denies that the council represents the interests of large players, saying membership includes small players too.
Govender says 400 employers participated in the march while “many employees joined the protest”. This latest protest is likely to be grist to the mill of sponsors of an African National Congress effort to ease up labour laws for small businesses. The creation of a more flexible labour law regime and of one that is easier to implement for small businesses is going to form a core debate at the ANC’s national general council meeting on June 29.
The Durban protests also follow President Thabo Mbeki’s State of the Nation address to Parliament earlier this year when he promised a “review of the regulatory framework as it applies to small, medium and micro-enterprises, before the end of the year, [and] government will complete the system of exemptions for these businesses with regard to taxes, levies, as well as central bargaining and other labour arrangements”.
Critics say that the powers contained in the Labour Relations Act prejudice small and emergent business in favour of established players. They say health, safety, basic conditions of employment and the Commission for Conciliation, Mediation and Arbitration provide sufficient protection for workers.
National compliance manager for the clothing bargaining council Leon Deetlefs says inspectors visit companies to check if they are complying with the main agreement as published in the Government Gazette.
A compliance order (“like a summons”) is issued and the matter then goes to arbitration (at the council) where in 99,9% of cases, says Deet-lefs, an award is made.
The award then goes to the Labour Court where it becomes an order of court.
Subsequent non-compliance can result in arrest and imprisonment.
Deetlefs says there are currently 716 awards countrywide, of which 372 are in KwaZulu-Natal.
The CMTEO, which has 220 members, says in a memorandum to the South African Clothing and Textile Workers Union and the NBC that it opposes the imposition of the collective main agreement to non-parties.
It says its attempts to set up a collective bargaining mechanism specifically for CMT operators have been categorically rejected and denied by the council.
Roberts says he has received the memorandum but has not studied it. He will make it available to NBC members at its next meeting.
The CMTEO says the main agreement has been undemocratically imposed via the mechanism of the Labour Relations Act of 1995.
The CMTEO’s memo says the vigorous enforcement of the main agreement, coupled with onerous penalties for non-compliance, has resulted in continued plant closures, job losses and increased poverty.
It says that restrictive practices by the NBC take place against the background of “tremendous increased imports of manufactured goods” from China and other Eastern countries with disastrous effects on local manufacturers.
While labour law allows for exemption mechanisms, “the NBC does not favourably consider exemption applications. Appeal mechanisms are threatening with resultant punitive cost orders.”
It wants a moratorium placed on all compliance and arbitration orders pending the establishment of a “CMT chamber” within the bargaining council.
Roberts says the NBC is a relatively new bargaining council, having begun acting on a national basis only since July 2003. He says the council has a minimum set of conditions, which must be adhered to.
The ANC’s economic reform proposals tabled last month says “government should consider adapting the present bargaining arrangements to limit the effect of agreements on parties outside of the agreement, such as smaller firms”.
In the meantime, business people such as Govender have taken to the streets to protect their assets, businesses and freedom.
Which does he fear most? Chinese imports or non-compliance orders?
“Non-compliance orders.”