the forestry sector’s concerns regarding the labour relations and basic condition of employment...

The Forestry Sector’s Concerns Regarding The Forestry Sector’s Concerns Regarding the Labour Relations andthe Labour Relations and

Basic Condition of EmploymentBasic Condition of EmploymentAmendment BillsAmendment Bills

Submission by Forestry South Africa Submission by Forestry South Africa To Parliamentary Public Hearing on Labour BillsTo Parliamentary Public Hearing on Labour Bills

July 24July 24thth 2012 2012

Presentation OutlinePresentation Outline

Introduction & BackgroundIntroduction & Background

Industry’s Main Concerns in respect of:Industry’s Main Concerns in respect of: The Labour Relations Amendment BillThe Labour Relations Amendment Bill Basic Conditions of Employment Amendment BillBasic Conditions of Employment Amendment Bill

ConclusionConclusion

Section 1 Section 1 Introduction & Background Introduction & Background

Introduction to Forestry South Africa Introduction to Forestry South Africa Forestry South Africa (FSA) is a voluntary Association which Forestry South Africa (FSA) is a voluntary Association which

represents the interests of its members in particular and the represents the interests of its members in particular and the promotion of the Industry in general. promotion of the Industry in general.

It does this in part through interacting with those It does this in part through interacting with those organisationsorganisations who’s actions have a direct bearing on the wellbeing of its members who’s actions have a direct bearing on the wellbeing of its members and the Industry.and the Industry.

Its members, which include all 9 corporate timber companies Its members, which include all 9 corporate timber companies operating in SA, 1 100 commercial timber farmers and 20 000 operating in SA, 1 100 commercial timber farmers and 20 000 emergent black timber famers, own or control over 90% of the emergent black timber famers, own or control over 90% of the Industry.Industry.

Due to its representivity, FSA is viewed by both Government and the Due to its representivity, FSA is viewed by both Government and the Private Sector as THE body which represents the Forestry IndustryPrivate Sector as THE body which represents the Forestry Industry

Why we are Making a SubmissionWhy we are Making a Submission

The Industry directly employs 70 000 people, all in rural areasThe Industry directly employs 70 000 people, all in rural areas The outsourcing of forestry operations is commonplace, with over The outsourcing of forestry operations is commonplace, with over

300 contractors collectively employing over 30 000 workers 300 contractors collectively employing over 30 000 workers Forestry work is seen as employment of the “last resort” making Forestry work is seen as employment of the “last resort” making

recruiting difficult, even in areas of high unemploymentrecruiting difficult, even in areas of high unemployment Labour turnover rates are extremely highLabour turnover rates are extremely high A vast majority of forestry jobs are low skilled onesA vast majority of forestry jobs are low skilled ones Forestry operations are becoming increasingly mechanisedForestry operations are becoming increasingly mechanised

Although the Bills will impact all employers, of significance to the Although the Bills will impact all employers, of significance to the South African Forestry Industry are the following circumstances:South African Forestry Industry are the following circumstances:

Due to the above, the Bills will have a profound impact on future Due to the above, the Bills will have a profound impact on future employment practices in the Industryemployment practices in the Industry

Objective of this Presentation Objective of this Presentation Forestry South Africa fully supports Government’s overall Forestry South Africa fully supports Government’s overall objectives of reducing unemployment, creating more jobs, objectives of reducing unemployment, creating more jobs, eradicating exploitation of vulnerable workers and creating eradicating exploitation of vulnerable workers and creating

sustainable livelihoods……sustainable livelihoods……

BUTBUTWe are extremely concerned that the Bills will have severe We are extremely concerned that the Bills will have severe

unintended consequences that will result in employers hiring less unintended consequences that will result in employers hiring less rather than more workers. We therefore need to bring these to rather than more workers. We therefore need to bring these to the Labour Portfolio Committee’s attention before the Bills are the Labour Portfolio Committee’s attention before the Bills are

enacted in their current form.enacted in their current form.

The Current Context The Current Context

SA has a huge structural unemployment problem – 25.3% (4.4 m) on SA has a huge structural unemployment problem – 25.3% (4.4 m) on narrow definition or 36.6% (7.4 m) on the expanded definitionnarrow definition or 36.6% (7.4 m) on the expanded definition

The economy, although technically out of recession, is still far from The economy, although technically out of recession, is still far from buoyantbuoyant

The economy lost over 1 million jobs following the 2008 crisis and The economy lost over 1 million jobs following the 2008 crisis and continues to struggle to create more jobscontinues to struggle to create more jobs

An estimated 2.13 million people (16% of the labour force) are An estimated 2.13 million people (16% of the labour force) are classified as temporary, fixed term or seasonal workersclassified as temporary, fixed term or seasonal workers

Red tape, over-regulation, and excessive administered price increases, Red tape, over-regulation, and excessive administered price increases, which are adding to the “cost of doing business”, are impacting which are adding to the “cost of doing business”, are impacting negatively on SA’s competitiveness negatively on SA’s competitiveness

The Bills come at a time when..........The Bills come at a time when..........

New Growth PathNew Growth Path5 m jobs and halving unemployment to 15% within 10 years5 m jobs and halving unemployment to 15% within 10 years

Section 2 Section 2 Industry’s Main Concerns Industry’s Main Concerns

Labour Relations Amendment Bill Labour Relations Amendment Bill

LRA Amendment Bill (1)LRA Amendment Bill (1)

New sub-section 51 (9)(b) gives bargaining council right to impose New sub-section 51 (9)(b) gives bargaining council right to impose a “dispute resolution levy” on all participantsa “dispute resolution levy” on all participantsIn addition, a new sub-section 51(9)(c) also provides for the In addition, a new sub-section 51(9)(c) also provides for the payment of a “fee” for any service rendered by the CCMA payment of a “fee” for any service rendered by the CCMA

Section 51(9): Dispute Resolution Function of Bargaining CouncilSection 51(9): Dispute Resolution Function of Bargaining Council

ProblemsProblems

Levy unfair to those not using conciliation / arbitration servicesLevy unfair to those not using conciliation / arbitration servicesSuch a levy would increase cost of doing businessSuch a levy would increase cost of doing business

RecommendationRecommendation

Scrap levy and institute a “user pay” system using payment of Scrap levy and institute a “user pay” system using payment of fees for any work actually undertaken fees for any work actually undertaken


Provision is made for holding of “ballots” before strike action or Provision is made for holding of “ballots” before strike action or lock-outs can occurlock-outs can occur

Section 64: Right to Strike and Recourse to Lock-OutSection 64: Right to Strike and Recourse to Lock-Out

ProblemProblem

Level of intimidation and indeed violence (including murder) Level of intimidation and indeed violence (including murder) associated with strike action is commonplaceassociated with strike action is commonplace


Change word “ballot” to “secret ballot” Change word “ballot” to “secret ballot”


New sub-section 186(1)(b)(ii) states that a worker on a fixed term New sub-section 186(1)(b)(ii) states that a worker on a fixed term contract may claim unfair dismissal if there was a contract may claim unfair dismissal if there was a “reasonable “reasonable expectation”expectation” that at the end of the contract, he / she would be that at the end of the contract, he / she would be offered an offered an “indefinite contract of employment” “indefinite contract of employment” but was not but was not actually offered oneactually offered one

Section 186(1): Meaning of Unfair DismissalSection 186(1): Meaning of Unfair Dismissal

ProblemProblem

Employers may be forced to employ a contract worker on a Employers may be forced to employ a contract worker on a permanent contract even if there was no intention to make the permanent contract even if there was no intention to make the position a permanent one.position a permanent one.


Remove sub-section 186(1)(b)(ii) Remove sub-section 186(1)(b)(ii)


The dismissal of workers earning over a certain threshold (as The dismissal of workers earning over a certain threshold (as determined by the Minister) will be deemed fair if 3 months determined by the Minister) will be deemed fair if 3 months notice given or pays out in lieu of notice period.notice given or pays out in lieu of notice period.Rationale is that such workers have sufficient bargaining powerRationale is that such workers have sufficient bargaining power

Section 188 B: Dismissal of Employees Earning above a ThresholdSection 188 B: Dismissal of Employees Earning above a Threshold

ProblemsProblems

This is a huge assumption to make – many such workers will not This is a huge assumption to make – many such workers will not have such bargaining powerhave such bargaining powerDoes not comply with principle of equityDoes not comply with principle of equity


Change wording in this Section (and other Sections in Bill) to Change wording in this Section (and other Sections in Bill) to remove reference to earnings threshold remove reference to earnings threshold


If an employee’s dismissal results from “operational If an employee’s dismissal results from “operational requirements” can be referred to CCMA or Labour Court if;requirements” can be referred to CCMA or Labour Court if;– Consultation procedure only applies to that employee;Consultation procedure only applies to that employee;– Operational requirements relate only to that employee; orOperational requirements relate only to that employee; or– Employer employs less than 10 employeesEmployer employs less than 10 employees

Section 191 (12): Disputes Over Unfair DismissalsSection 191 (12): Disputes Over Unfair Dismissals

ProblemProblem

Many small & micro businesses will be caught in this net Many small & micro businesses will be caught in this net Will lead to substantial increase in cases going to CCMA & LCWill lead to substantial increase in cases going to CCMA & LCWill have a huge negative effect on small businesses in terms of Will have a huge negative effect on small businesses in terms of cost and timecost and time


Retain Section 191 (12) of original Act Retain Section 191 (12) of original Act


Temporary contracts limited to 6 months unless Temporary contracts limited to 6 months unless “justified”“justified”Employers will need to Employers will need to “justify” “justify” need for a contract, its length need for a contract, its length and reasons for any difference service conditionsand reasons for any difference service conditionsNon-standard employees to Non-standard employees to “be treated on the whole not less “be treated on the whole not less favourably”favourably” than an employee of the client than an employee of the client

Section 198: Temporary Employment ServicesSection 198: Temporary Employment Services

ProblemsProblems

Contract limitation limits flexibility Contract limitation limits flexibility Justification process extremely cumbersome and costlyJustification process extremely cumbersome and costlyIf If “less favourably” “less favourably” relates to wages, ok, if all benefits, problemrelates to wages, ok, if all benefits, problemWill add significantly to cost of doing businessWill add significantly to cost of doing business

RecommendationsRecommendations

Scrap justification obligation – can be done in case of disputeScrap justification obligation – can be done in case of dispute““Less favourably” Less favourably” to relate only to wages, not service benefits to relate only to wages, not service benefits

Basic Conditions of Employment Basic Conditions of Employment Amendment Bill Amendment Bill

BCE Amendment Bill (1)BCE Amendment Bill (1)

Sub-section 33A (2) states that an employer can oblige an Sub-section 33A (2) states that an employer can oblige an employee to buy goods or services if, in terms of contract of employee to buy goods or services if, in terms of contract of employment or collective agreement, an employee is employment or collective agreement, an employee is “required “required to partake in a scheme” to partake in a scheme” to buy such as long as the employee to buy such as long as the employee receives receives “financial benefit” “financial benefit” from doing so.from doing so.

Section 33 A: Prohibited ConductSection 33 A: Prohibited Conduct

ProblemProblem

Pension contributions would be ok but in some cases employee Pension contributions would be ok but in some cases employee will not get financial benefit from contributing will not get financial benefit from contributing (e.g. medical aid (e.g. medical aid contributions)contributions) or not part of a “scheme or not part of a “scheme” (e.g. paying for ” (e.g. paying for electricity in company provided housing)electricity in company provided housing)


Provision needs to be broader to cater for non scheme and non Provision needs to be broader to cater for non scheme and non financial benefit situations financial benefit situations


The Minister has the power to set not only minimum wage The Minister has the power to set not only minimum wage rates (as currently) but also rates (as currently) but also “minimum increases in “minimum increases in remuneration” remuneration” where setting of such not covered by a where setting of such not covered by a collective agreementcollective agreement

Section 55(4)(b): Making of Sectoral DeterminationSection 55(4)(b): Making of Sectoral Determination

ProblemsProblems

In effect the Minister will take on the role of a bargaining council In effect the Minister will take on the role of a bargaining council – but will set increases unilaterally. This is unacceptable.– but will set increases unilaterally. This is unacceptable.In any event, the “one-size-fits-all” approach to wage In any event, the “one-size-fits-all” approach to wage determination is highly problematic (no scale taken into account)determination is highly problematic (no scale taken into account)


Remove sub-section 55(4)(b)(ii) thereby allowing the Minister to Remove sub-section 55(4)(b)(ii) thereby allowing the Minister to determine minimum wage rates only determine minimum wage rates only


This amended sub-section empowers the Minister to This amended sub-section empowers the Minister to ““prohibit prohibit or regulate or regulate task-based task-based work, piecework, home work, sub-work, piecework, home work, sub-contracting and contract work”.contracting and contract work”.

Section 55(4)(g): Making of Sectoral DeterminationSection 55(4)(g): Making of Sectoral Determination

ProblemProblem

This leaves the door open for the Minister to ban these activities This leaves the door open for the Minister to ban these activities Of particular concern is that the task-based system is universally Of particular concern is that the task-based system is universally used in the Forestry Industry. Job losses could occur if banned used in the Forestry Industry. Job losses could occur if banned A ban could be contrary to section 22 of the Constitution A ban could be contrary to section 22 of the Constitution


Remove the words “prohibit or” thus allowing the Minister to Remove the words “prohibit or” thus allowing the Minister to regulate these forms of work but not to ban them outright regulate these forms of work but not to ban them outright


This new sub-section makes provision for the Minister to set This new sub-section makes provision for the Minister to set “a “a threshold of representativeness threshold of representativeness within a sector within a sector at which a at which a trade union trade union automaticallyautomatically has the organisational rights” has the organisational rights”

Section 55 (4)(o): Making of Sectoral DeterminationSection 55 (4)(o): Making of Sectoral Determination

ProblemsProblems

Representivity threshold set at sector level not at workplaceRepresentivity threshold set at sector level not at workplaceGiven the level of unionisation in forestry, threshold will be lowGiven the level of unionisation in forestry, threshold will be lowPrinciple is undemocraticPrinciple is undemocraticThis is NOT a basic conditions of employment matter – it’s a This is NOT a basic conditions of employment matter – it’s a labour relations onelabour relations one


This sub-section is not in the scope of the BCEA and should be This sub-section is not in the scope of the BCEA and should be removed removed


The above Sections, which have been repealed, deal with:The above Sections, which have been repealed, deal with:– Objections to a compliance order issued by a labour inspector; Objections to a compliance order issued by a labour inspector; – Appeals to a compliance order issued by an order of the Appeals to a compliance order issued by an order of the

Director General.Director General.

Sections 71 & 72: Compliance Orders and Related MattersSections 71 & 72: Compliance Orders and Related Matters

ProblemsProblems

The DG can bypass the appeals process and apply directly to the The DG can bypass the appeals process and apply directly to the Labour Court for a court orderLabour Court for a court orderThis heavy handed approach is completely contrary to This heavy handed approach is completely contrary to administrative justice principles & would increase costsadministrative justice principles & would increase costsThe Labour Court would be overburdened with workThe Labour Court would be overburdened with work


These Sections should not be repealed These Sections should not be repealed

Section 3 Section 3 Conclusion Conclusion

Concluding Remarks Concluding Remarks It is evident that the Bills are aimed primarily at protecting those It is evident that the Bills are aimed primarily at protecting those with jobs – not creating new ones.with jobs – not creating new ones.New jobs can only be created through sustained economic New jobs can only be created through sustained economic growth which in turn needs a business environment conducive to growth which in turn needs a business environment conducive to achieving this. achieving this. Will the Bills create this?Will the Bills create this?Businesses, particularly small ones, are the creators of Businesses, particularly small ones, are the creators of sustainable jobs – not Government or Unions. They need sustainable jobs – not Government or Unions. They need encouraging to do this. encouraging to do this. Will the Bills do so? Will the Bills do so? Any laws & regulations need to be achievable, enforceable and Any laws & regulations need to be achievable, enforceable and cost effective to implement and comply with. cost effective to implement and comply with. Are these Bills?Are these Bills?To remain internationally competitive, amongst other things, the To remain internationally competitive, amongst other things, the cost of doing business needs to be low and labour laws flexible. cost of doing business needs to be low and labour laws flexible. Will these Bills assist in achieving this? Will these Bills assist in achieving this?

Given the above, we would recommend that another Given the above, we would recommend that another Regulatory Impact Assessment be undertaken Regulatory Impact Assessment be undertaken

Conclusions Conclusions

Employers will respond to the imposition of more stringent labour Employers will respond to the imposition of more stringent labour regulations by:regulations by:– Cutting down on hiring new/replacement permanent employees;Cutting down on hiring new/replacement permanent employees;– Not taking on contract workers for fear that they may have to employ them Not taking on contract workers for fear that they may have to employ them

permanently; andpermanently; and– Automating or mechanising operations wherever possible.Automating or mechanising operations wherever possible.

The “cost of doing business” for business and the administrative The “cost of doing business” for business and the administrative burden on Government will both increase dramaticallyburden on Government will both increase dramaticallyThe result of the above will be that SA business will become more The result of the above will be that SA business will become more uncompetitive and the already overburdened taxpayer will have to uncompetitive and the already overburdened taxpayer will have to fund the employment of more civil servantsfund the employment of more civil servants

In our view, should the Bills be enacted in their current In our view, should the Bills be enacted in their current form...form...

The Government’s job creation objectives will not be The Government’s job creation objectives will not be met – indeed, the level of total employment may fall met – indeed, the level of total employment may fall

The Final Word The Final Word The South African Forestry Industry wants to assist the The South African Forestry Industry wants to assist the

Government in achieving its objectivesGovernment in achieving its objectives BUTBUT

For this to happen, a far more “business friendly” For this to happen, a far more “business friendly” approach to labour legislation and regulation is needed.approach to labour legislation and regulation is needed.

It is therefore hoped that the Department will take FSA’s It is therefore hoped that the Department will take FSA’s comments and recommendations in the spirit with comments and recommendations in the spirit with

which they were made.which they were made.

At the end of the day we need to work together to At the end of the day we need to work together to create a WIN WIN situation that will defeat the scourge create a WIN WIN situation that will defeat the scourge of exploitation & unemployment. That can only happen of exploitation & unemployment. That can only happen

through sustained long-term economic growth.through sustained long-term economic growth.

Thank You Thank You

the forestry sector’s concerns regarding the labour relations and basic condition of employment...

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