Home Press Releases Archived 2013 The Pietermaritzburg High Court judgment on the clothing industry wage agreement: SACTWU response *Update*
The Pietermaritzburg High Court judgment on the clothing industry wage agreement: SACTWU response *Update* PDF Print E-mail
Thursday, 14 March 2013 13:42


PRESS RELEASE: IMMEDIATE
 


Judge J Koen has ruled yesterday that the Minister of Labour’s decision to extend the 2010 clothing industry wage agreement to companies not party to the clothing industry bargaining council should be set aside. That is all.
 
Yet, there has been widespread misreporting about the actual content and effect of the judgement and people’s imaginations are running wild!
 
The Southern African Clothing & Textile Workers Union (SACTWU) responds as follows:

The sky won’t fall!

We are further studying the judgment. We will decide whether or not to appeal, based on at least the following two questions:
-does it set a bad industrial relations legal precedent?
-does it have a detrimental practical effect on clothing workers’ wage levels?

For now, we respond as follows:

It is a hollow victory for non-compliant employers. It has now only hardened SACTWU’s attitude towards them, the opposite effect of what they expected.

It is not true that the judgment has the effect of setting aside the clothing industry minimum wage regime. As we speak now, there is still a gazetted and extended industry-wide minimum wage agreement in place, despite the setting aside of the 2010 extension. This covers all clothing employers and clothing workers in every part of the country. All employers are required to comply with their obligations legislated in this agreement, including the payment of legal minimum wages.  We expect them to do so, and will do everything in our power to compel them to do so.

It is not true that the Judge has ruled that non-compliant, non-party companies now have the right to negotiate outside of the bargaining council system. This is nowhere to be found in the written judgment. But we are not surprised, as sites and levels of bargaining is an organisational matter, not determined by our Courts. For us, the bargaining council remains the only place where we intend to bargain. There will be no negotiations outside this forum.

It is not true that the judgment means that the bargaining council is prohibited from executing writs of execution against non-compliant companies. Only those writs held against the now set aside 2010 extended agreement is now held in abeyance. But the vast majority of writs still remain legally valid, as these have been issued against many other legitimate agreements, other than the 2010 extension. We will now step up our fight against illegality, by ensuring that legitimately secured writs are executed as speedily as possible.

It is not true that the Minister will no longer in future be able to extend a bargaining council agreement to non-parties. The judgment has only identified an administrative error in the manner in which the Minister has extended the 2010 wage agreement. The judgment does not remove this power from the Minister. We will work with the Minister to strengthen extension capacity.

It is not practically and legally possible for employers to now “take back” increases granted to workers, in consequence of the 2010 extended agreement. It will unleash widespread and spontaneous industrial unrest. In fact, Judge Koen himself, in his judgment of yesterday, cautions against this, as follows:

“(84)  It might be irresponsible for employers who have paid employees higher wages in terms of the extended agreement to now seek to recover the extent of such over-payment. That could obviously bring disruption to the industry, but particularly  to individual work places, which employers presumably would want to avoid. I have however no evidence on the application in front of me that any non-parties to the extended collective agreement contemplate such action.”

Issued by
Andre Kriel
SACTWU
General Secretary


<< A copy of the High Court Judgement can be found here >>

Other ‘myths’ about the judgment are addressed in the SACTWU General’s previous responses, set out below:

Myths, repeated often enough, can incorrectly be assumed to constitute reality or truth. Take, for example, the recent flood of clearly one-sided negative assertions about the clothing industry, falsely spewed out as facts.  This drivel is disingenuously constructed to justify exploitation of mostly black women workers. Its broader aim is to dismantle our industrial relations system for even worse exploitation opportunities.

It is claimed that the industry’s collective bargaining structure is just a cosy club of big business, the union (SACTWU) and government, who deliberately manipulate wage levels to the detriment of small companies. The facts are different:  87% of companies that are members of associations belonging to the bargaining council are SMMEE’s. SACTWU represents more than 85% of these companies’ workers. Government is not represented on the bargaining council at all.

The myth of an inflexible, ‘once-size-fits-all’ wage regime is also perpetuated. In reality, the industry’s wage agreement prescribes at least 220 different wage levels for the benchmark job category (machinists) alone, depending on location, experience and manufacturing operations type, spread over nine different geographic areas. 

The industry wage agreement actually does provide for productivity-linked wage payments, contrary to false public perceptions being created that this is not the case.

Prescribed wages are actually very low. In an area like Newcastle, a machinist’s gazetted starting minimum wage is only R369 per week for a 45-hour work-week.

The bargaining council is monsterised as the cause of wide-spread wage non-compliance. In fact, the council has not always assumed wage jurisdiction over non-metro areas like Newcastle. Prior to 2002, non-metro area employment conditions were set by sectoral determination.  Even then, the same employers deliberately refused to comply with the law. The bargaining council inherited this historic non-compliance when its registered scope was expanded to cover non-metro areas. It did not create non-compliance.

Non-compliant manufacturers in non-metro areas do not compete with compliant metro-based manufacturers, because their product markets differ, it is claimed.  This is not the case.  SACTWU regularly engages in retrenchment negotiations with law-abiding companies, where the cause of job losses is verifiable loss of orders to illegal non-compliant companies.
The fiction is created that clothing industry job losses are primarily caused by high wages. Actually, wages is bitterly low. In Durban metro, for example, the current gazetted starting minimum wage for a machinist is only R364.10 per week. In Cape Town it is R446.50 and in Johannesburg it is R360.40. This is lower than the R525 weekly wage recently prescribed for farm workers. It takes new clothing machinists at least 18 months to reach the top rate, which in itself is very low. In fact, even top rate clothing workers are the lowest paid in the whole of the domestic manufacturing industry. Yet, there is a now an aggressive onslaught to drive wage levels even lower. How low can you go? 

In reality, the main cause of the massive job losses which the industry had experienced were primarily attributable to the fast-tracked tariff reduction regime introduced under GEAR in 1996: tariffs were reduced at a faster rate than required by the WTO regulations and, in addition, to lower binding levels. This was compounded by high levels of illegal imports and serious instances of widespread under-invoicing at our ports of entries. Fortunately, government has now taken serious steps to correct the previous tariff reduction debacle. More needs to be done to stem illegal imports and under-invoicing, though.

False information is being spread that the clothing bargaining council is to close down 450 factories, causing 16000 job losses. Has anybody taken the time to check the facts instead of just blindly regurgitating propaganda?   The bargaining council currently holds writs of execution against 297 factories (not 450) employing about 5500 workers (not 16000). Many of these companies have now actually taken steps to become compliant and everything must be done to reward their quest to legalise their operations.  Many others still deliberately refuse. Their illegality cannot be allowed to continue. It causes job losses in law-abiding workplaces.

The issue is not a trade off between jobs and decent work, almost as if the two issues are mutually exclusive. Competitive advantage cannot be based on illegality and a race to the bottom.

For comment contact SACTWU’s 1st National Organising Secretary Chris Gina on cell numbers 0829409456/0741932258, or 2nd National Organising Secretary Bonita Loubser on cell number 082 8007142.

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