Achieving "decent work" in south africa? T cohen? L moodley



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ACHIEVING "DECENT WORK" IN SOUTH AFRICA?

T Cohen?

L Moodley??

1 Introduction

The fundamental goal of the International Labour Organisation (ILO) is the achievement of "decent and productive work for both women and men in conditions of freedom, equity, security and human dignity".1 The concept of decent work "is based on the understanding that work is not only a source of income but more importantly a source of personal dignity, family stability, peace in community, and economic growth that expands opportunities for productive jobs and employment."2 In the furtherance of this goal the ILO's Decent Work Agenda3 aims to implement decent work at country level by means of policy and institutional intervention, and Decent Work Country Programmes have been developed, in coordination with ILO members, to identify decent work deficits in member countries and to devise targets and strategies to overcome such deficits. In support of this the South African government has pledged its commitment to the attainment of decent work and sustainable livelihoods for all workers and has undertaken to mainstream decent work imperatives into national development strategies.4

The four strategic objectives of decent work as identified by the ILO are: i) the promotion of standards and rights at work, to ensure that workers' constitutionally protected rights to dignity, equality and fair labour practices amongst others are safeguarded by appropriate legal frameworks; (ii) the promotion of employment creation and income opportunities, with the goal being "not just the creation of jobs, but the creation of jobs of acceptable quality";5 (iii) the provision and improvement of social protection and social security, which is regarded as fundamental to the alleviation of poverty, inequality and the burden of care responsibilities; and (iv) the promotion of social dialogue and tripartism.

While the ideals of decent work extend well beyond the confines of the employment relationship, this article will be limited to an analysis of five statistical indicators, namely: (i) employment opportunities; (ii) adequate earnings and productive work; (iii) stability and security of work; (iv) social protection; and (v) social dialogue and workplace relations; to measure progress made towards the attainment of decent work objectives in South Africa. In so doing the obstacles to the attainment of decent work and the measures required to overcome such obstacles are identified.

2 The nature of the work force in South Africa

The South African work force is subject to both formal and informal employment relationships. According to the Quarterly Labour Survey for the 1st quarter of 20126 there are 13.4 million people currently employed in South Africa, comprising 9.5 million in the formal sector and 2.1 million in the informal sector. In contradiction the Adcorp Employment Index (September 2011) reports that 12.7 million people are currently employed in the formal sector in South Africa, which comprises of 8.9 million workers engaged in typical employment and 3.8 million in atypical employment. The report indicates that 6.2 million people work in the informal sector, which it identified as the fastest-growing sector.7 Informal employment, defined by Statistics South Africa as "employment in precarious work situations with no written contract and no benefits",8 includes the self-employed in informal enterprises, workers in unregistered enterprises and wage workers in informal jobs, many of whom fall into what has been referred to as the "survivalist" category of workers.9 Whichever are the more accurate statistics remains the subject of intense debate but it is indisputable that the high levels of unemployment, exacerbated by the global recession, have resulted in a disproportionate growth of the informal sector in South Africa.10

An increased reliance upon outsourcing and sub-contracting arrangements has given rise to the growing "casualisation"11 of the labour market and an unregulated and insecure labour force. "Externalisation",12 in terms of which workers are supplied to a client by a third party by means of a commercial contract, has had a similarly detrimental impact on the labour market. The Adcorp Employment Index (September 2011) reports that 998 000 employees are currently employed by temporary employment agencies. In terms of this triangular employment relationship the recruitment, dismissal and employment functions normally performed by employers are outsourced to an intermediary, while the "task side" of the relationship is not outsourced.13 In many instances the identity of the true employer is obscured and such employees are deprived of legal protection as a result.14

Gender inequalities continue to undermine decent work objectives, in spite of female labour force participation in South Africa having increased from 38% in 1995 to 48.5% in 2012.15 Women employees face inequality and disadvantage in the workplace and face glaring pay differentials,16 gender stereotyping, discrimination based on maternity and family responsibilities and difficulties in balancing work and family life. Women are mainly concentrated in the feminised professions such as nursing and teaching (this is horizontal occupational segregation) while at the same time remaining in lower job categories than men (while this is vertical occupational segregation) and remain grossly underrepresented in senior positions. The 11th Annual Commission for Employment Equity Report (2010-2011)17 notes that women constituted a mere 19% of top management, with African females constituting a paltry 3.5%. Of these, women held only 4.4% of CEO/MD positions, 5.3% of chairperson positions, and 15.8% of directorships.18 In the 2010-2011 reporting cycle women constituted 29% of senior management, with African females constituting 5.6%. Despite this, women constituted 39.9% of professionally qualified employees and 43.7% of skilled employees.19 The report confirms that African and Coloured females are disproportionally under-represented at all senior levels and are the least promoted. Women employees remain over-represented in lower paid, less secure and unskilled positions, with 16% of women employees being employed in the informal sector, 21% in the elementary sector, and 15% in the domestic sector. The concentration of women in low-paid jobs, with limited access to job security and benefits, has contributed to the increasing "feminisation of poverty".20

An analysis of the employment-to-population ratio for persons aged 15-24 years (the "youth" population) between 2000 and 2009 reveals that the percentage of the youth population employed dropped from 16.2% in 2000 to 14.6% in 2008,21 with 71% of the unemployed being under the age of 34.22 The Organisation for Economic Development (OECD) Economic Survey for South Africa 2010 23 confirmed that South Africa has "an extreme and persistent low employment problem which interacts with other economic and social problems such as inadequate education, poor health outcomes and crime" and recommended that youth-specific measures be made an integral part of the employment strategy.24

The Quarterly Labour Force Survey (1st quarter: 2012) places South Africa's unemployment rate at 25.2 %, with total unemployment having increased from 23.9% in the previous quarter. Nonetheless 4.5 million people remained unemployed during the surveyed period, with 68,2% of these persons having been unemployed for a period of 1 year or more.25 Women account for 2.3 million of the 4.5 million unemployed persons, with an increase in the proportion of unemployed women, as opposed to men, being noted. Discouraged work seekers26 constitute 2.335 million of the 14.8 million persons in the "not-economically active" population. The global economic crisis that has resulted in limited available credit, trade finance and investments in the real economy, cautious spending leading to lower economic output, decreased employment and a lack of consumer and investor confidence has further served to undermine governmental efforts to combat unemployment.27

  1. Measuring decent work in South Africa

3.1 Employment opportunities

In order to overcome the decent work deficit in South Africa, job creation is imperative. The concept of decent work entails the existence of employment opportunities for all who are willing and able to work. The South African Decent Work Country Programme prioritises "job rich growth, sustainable enterprises including formalization of the informal sector, and skills development".28

An important indicator of decent work is the extent to which a country's population is employed.29 Employment opportunities may be measured using either (a) the employment-to-population ratio, which measures the proportion of the working age population that is employed; or (b) the unemployment rate, which measures the number of unemployed persons as a percentage of the labour force.30 In the first quarter of 2012 the employment-to-population ratio in South Africa was reported to be 40.9%, the labour force participation rate 54.7% and the unemployment rate 25.2%31 - a far cry from attaining decent work objectives.

A number of national policies and institutional structures have been established, with the technical and policy support of the ILO, to facilitate job creation. The Expanded Public Works Programme aims to create job opportunities for the unemployed with particular focus on women, youth and other vulnerable groups. The ILO has supported government in the design of the programme and has assisted in its implementation at national and provincial levels. However, research indicates that, in spite of the creation of 500 000 new jobs during phase one of the programme (2004-2009), these jobs were short-term, poorly remunerated and without benefits. A simultaneous loss of 900 000 jobs during this period, attributable to the global recession, undermined any gains made. A target of creating 2 million full-time jobs during phase two of the programme (2010-2014) has been set, yet progress towards the attainment of these goals has been slow.32 Other national job creation initiatives include a national training layoff scheme33 to minimise job losses arising out of the global recession and a National Skills Development Strategy.34 However, governance problems with regard to the management of SETAs have undermined the effectiveness of skills development initiatives and the training layoff scheme remains poorly understood and under-utilised at present.

Government's New Growth Path, premised on a restructuring of the South African economy, sets an ambitious target of creating 5 million new jobs by 2020, through planned infrastructure development and focus on the manufacturing, agricultural, tourism and mining sector and the green economy.35 Nonetheless this job creation programme has been criticised by both business and labour as lacking tangible measures to counter unemployment and as being likely to fail.36

In furtherance of the governmental objective of ensuring that young people have access to "decent work in productive and competitive enterprises"37 the implementation of a youth wage subsidy, which aims to subsidise a portion of the wages of workers aged 18 to 29 years for a period of up to two years, is currently under discussion at NEDLAC. A sum of R5 billion has been allocated to this project in the 2011/12 national budget, with the intention of creating 133,000 new and sustainable jobs over a three-year period.38 This is in keeping with the ILO's youth employment initiatives, which include mainstreaming youth employment into broader policies and programmes and developing targeted interventions for disadvantaged youths.39 This initiative has, however, been vehemently opposed by COSATU as being likely to facilitate the further casualisation of the labour market and to undermine minimum standards.

Despite 2011 having been earmarked as South Africa's "year of job creation"40 early indications are that these ideals have not been realised, nor are likely to be. The South Africa Survey 2011 notes that the current rate of job creation will need to increase ten-fold in order to meet government's job creation target of 5 million jobs by 2020.41 The report indicates that

External economic factors, labour regulation, and policies affecting investor sentiment will all play a role in determining how much employment will increase over the next decade. The Government has control over two of these three influences and it will need decisive action on its part to create the conditions necessary for so many jobs to be created over a relatively short space of time.42

Until job creation can be effectively addressed, decent work objectives are likely to remain solely aspirational.

    1. Adequate earnings and productive work

An adequate living wage is imperative for the attainment of decent work.43 As pointed out by Anker, "nearly all individuals who work or seek work do so in order to earn an income and ensure the economic well-being of themselves and their households".44 In South Africa wages and incomes remain highly unequal between the informal and the formal economy, with poverty and inequality assuming racial, gender and age dimensions.45 A study conducted on informal workers in 2003 reported that more than half of informal workers earned less than R500 per month.46 According to the study approximately 75% of the informal economy workers earned less than R1000 per month, whilst only 15% of the formal economy workers fell within this range.47 The United Nations Development Project National Human Development Report for South Africa48 reported that in 1995 the average white household earned four times as much as the average African household and by 2000 was earning 6 times the income of the average African household.49

These differentials remain substantially unchanged in current times, with statistics of the monthly earnings of South Africans in 2010 revealing the median monthly earnings of white workers to be R9 500 and Indian/Asian workers R6 000 - substantially higher than the median monthly earnings of their coloured (R2 652) and black African (R2 167) counterparts. Thus black employees in 2010 earned 22% of white employees' earnings, 36.1% of Indian employees' and 81.7% of coloured employees'.50 Median monthly earnings for informal sector employees were calculated as R1 600, being 43% of the median monthly earnings of formal sector employees.51 Research confirms that employees employed by temporary employment services are generally paid considerably less and receive fewer benefits than the client's employees performing the same work.52

In South Africa the gender wage gap is evident in all occupations except domestic work, and women tend to average monthly earnings of R2 340 or approximately 77% of the R3 033 average earnings of their male counterparts.53 These glaring wage differentials persist despite the educational advances of women and are evident at all levels of employment.54 A 2003 NALEDI report, considering average earnings in selected occupations55 in all industries in the informal sector save for mining and quarrying, confirmed that female earnings were well below the earnings of male workers.56 This remains the position in 2010 where the wage gap is evident in all sectors save for domestic work.57

There is a direct relationship between low wages and poverty. A study of the average monthly income for households in 1993 established that for the poorest members (20%) of the population 31% of their income comes from sources other than regular employment, with regular employment contributing only 23% of the monthly household income.58 Since it is self-evident that low wages have a direct impact on poverty levels, improving wages and conditions of employment is of crucial importance in overcoming decent work deficits.

While minimum wages59 have been established for domestic workers, farm workers, forestry workers and the informal taxi and hospitality sectors - thereby extending protection to more than 3 million workers in South Africa - the income disparities that characterise the South African labour market must be dismantled before decent work objectives can be fulfilled.

3.3 Stability and security of work

Job security is regarded as a fundamental component of decent work. Job loss involves not only the loss of income but has far-reaching consequences for the dignity of employees and their family and community stability.60 High levels of unemployment in South Africa imply that job loss is likely to endure for a prolonged period of time.61 The constitutional guarantee of fair labour practices and legislative protection against unfair dismissal, unfair labour practices and unfair discrimination aims to protect the job security of employees in formal and typical employment relationships. Despite this, employees in atypical employment relationships and in informal employment face insecure and unstable working conditions.

Temporary employment services contribute significantly towards externalisation and insecure working conditions.62 Section 198(2) of the Labour Relations Act63 (LRA) stipulates that the temporary employment service is the employer of the person whose services have been procured for a client,64 and limits the client's liability to joint and several liability with the employer for a contravention of the terms and conditions of a collective agreement, arbitration award, sectoral determination or provision of the Basic Conditions of Employment Act.65 The temporary employment service's employees' terms and conditions of employment are governed by the commercial contract concluded between the temporary employment service and its client and are inevitably reflective of the completely skewed bargaining positions of the contracting parties. It is the client that "determines the parameters of the relationship and is dominant in the relationship".66 As the economic rationale for the utilisation of temporary employment services is to circumvent the contractual nexus between the client and the employee that would typically arise in a standard employment relationship and allow the client to bypass the gamut of statutory and contractual obligations, these employees are left in a vulnerable position. This vulnerability is at its most acute upon the dismissal of an employee, as the statutory protection against unfair dismissal is rendered impotent by carefully constructed contractual provisions that usually stipulate that employees of temporary employment service are employed in terms of "limited duration contracts" that are deemed to terminate automatically upon the happening of an uncertain future event.67 While the consequence of joint and several liability is that if a temporary employment service fails to pay amounts owing to its employees the clients for whom the employees work are liable to make payment, this remains a default liability as the client is not the employer and cannot be challenged directly in the Council for Conciliation Mediation and Arbitration (CCMA) or the Labour Court.68 An employee can proceed against the client only if s/he has obtained judgment or an order against the temporary employment service.69

Furthermore, outsourcing and subcontracting arrangements that create ambiguity as to the identity of the employer, the misuse of fixed-term contracts of employment and the fraudulent use of cooperatives have served to deprive employees of labour law protection and security of employment, and burden workers, their families and society with the costs associated with unregulated work.70

The proposed amendments to the Labour Relations Act in the Labour Relations Amendment Bill 201271 aim to regulate temporary employment services, fixed-term employment contracts and outsourcing arrangements in a bid to ensure decent work for all workers.72 While the Amendment Bill remains subject to ratification it is clear that the misuse of temporary employment arrangements and the abuse of fixed-term contracts will no longer be tolerated – a welcome step towards the attainment of decent work objectives.

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