Documents Handed Out:
Minister’s Media Briefing [See Appendix below]
Mr Membathisi Mdladlana’s speech concerned the wages and working conditions of farm workers. The Minister of Labour stressed the importance of differentiating between a fair and a minimum wage. It was also stressed that the proposals were just that, only proposals with no legal effect.
Below are questions put to the Minister by the media.
Q: The Minister was reminded that he had said that a minimum wage would not affect the profitability of farms. The question was whether the Department had indeed conducted studies to determine whether this is true.
A: The Minister said that in compiling the report the Department had included a modeling exercise. This exercise tried to determine the effect of a number of minimum wages. This projection was available in the Report [Government Gazette No 22648 of 13/09/01; on Labour website at http://www.labour.gov.za]. The minimum wages had furthermore been set at modest levels which had been specifically selected as the Department’s projections had shown these would have the least impact on profitability.
Q: The projections in the Government Gazette shows that only a certain percentage of farm workers’ salaries would be affected by a minimum wage as they were paid in excess of the minimum. However, these figures also allude to the fact that a percentage of workers would find themselves without employment as a result of the imposition of a minimum wage.
A: The Minister conceded that this was true but said that the figures in the Gazette represented those farm workers which received the ceiling salary. Those workers that received the least payment were however on the other end of the spectrum. These workers receive little or no payment. These are the workers which a minimum wage would seek to protect, for this reason a modest floor has been suggested with farmers being encouraged to pay above the minimum where they could.
The Minister noted that the Department had developed a healthy relationship with the agricultural fraternity and after discussion with this sector the Department did not foresee any significant backlash or retrenchment.
Q: The Department was asked what percentage of workers would actually benefit, in terms of actual money in their pockets, as a result of the minimum wage.
A: The Minister said that this question could not be easily answered because of the fact that information on this sector of the labour market was hard to come by. The Department used what little relevant information could be gleamed from the census. Despite the lack of information, the Department still attempted to make such predictions in the Report.
Q: The Minister, in his presentation had made reference to the fact that often farm workers end up in debt spirals, owing their employers a growing amount of money subject to interest rates often higher that any other. The Minister was asked what steps had been taken to avoid such debt spirals.
A: The Minister said that the problem here was enforcement and said that this matter could not be dealt with exclusively by the Department of Labour. This was because the matter involved a number of other departments. The Minister of Finance and the Treasury also needed to be incorporated to deal with this matter. Interest rates are often as high as 40%, an amount which is illegal and much higher than the maximum set by the Minister of Finance.
Q: A media representative reminded the Minister that a labour organisation for domestic services had opposed the R600 minimum wage. The question was whether the Department had foreseen that a similar opposition might come to the fore in relation to the imposition of a minimum wage for farm workers.
A: The Minister said that indeed unions were opposed to the imposition of such minimum wages by the Department of Labour. What was important was to understand the reason behind the setting of a minimum wage on a regional basis such as this. The Minister said such steps were taken because these individuals were weak and had no bargaining power. These steps however undermine the power of unions who fight for wages at a broader or on a larger regional basis.
The Minister said that this was an increasing problem being experienced by the Department. This was because many farm workers, especially those who worked in rural areas, had a waning interest in labour unions and their leadership. This disenfranchisement with the unions was the result of the fact that these people often disagreed with decisions taken by union leadership or simply did not see anything positive coming from union membership.
Finally the Minister said that the ideal position would be if the unions used this minimum wage as a mechanism to fight for better conditions of employment for farm workers.
Q: The Department was asked to what extent natural disasters had been factored into the determination of regional demarcations and their respective minimum wages.
A: The Minister said that in determining the various regions, factors such as natural disasters had not been taken into account. Instead regions had been determined taking into account factors such as type of crop and other economic variables. However if a certain region was affected by a drought or flood then an exemption or variation could be applied for.
Q: The Department was asked to what extent, if any, had other governmental and non-governmental organisations been consulted in drawing up the report. The media representative pointed out that in the report, the area of Hoopstad had one of the lowest minimum wages while that area was one of the most prosperous regions. Also in specifying the minimum dimensions of accommodation that could be provided as part of payment, had the Department of Housing been consulted.
A: The Report contained merely recommendations that were meant to attract comments and questions such as the one just asked. The Minister added that a good point had been made and such steps would now be taken.
Q: A media representative asked why farmers with less than five workers were excluded. He asked what the argument was against providing that all farmers with any amount of workers are included. Then if a specific farmer is unable to afford the minimum then he can apply for an exemption.
A: The Department said that this could in fact be the way that the Department would decide to go eventually and that public comment would first be needed. One argument against this might be that smaller farmers might not have the resources to apply for an exemption. Bigger farmers could simply fax an application for an exemption while smaller farmers could possibly not have the means or resources to even apply for an exemption.
Q: The Department had stated that there would be a cost to the industry and that there would be job loss, but exactly what would the cost to the industry be and how much job loss is envisaged.
A: The Minister said that the Department had done a modeling exercise. This exercise was however a static one that did not take into account some of the indirect factors. Job loss was already occurring because of the changing nature of the economy and competition. It would therefore be difficult to predict or even determine, ex post facto, how many job losses will occur, or occurred, as a result of the minimum wage.
They had set a very modest wage. this was done just to set a floor, a floor that was much needed in light of the position in which farm workers find themselves. In the Eastern Cape the Minister had spoken to farmers who proudly profess that they do not pay their labourers. These individuals say that they simply give their workers milk when it is sour, or tell their workers that when a certain cow gives birth, then the calf would be theirs.
The Minister said that implementation would be slow so that farmers would have time to adjust. While the slow implementation was taking place, the Department would consult with the farmers in an attempt to show them that it was not in their interest or South Africa’s interest for farm laborers to live in poverty. The Department would show farmers that the best way would be to increase the capacity of their workers and to increase productivity through more reasonable wages.
Appendix:
THE HONOURABLE MINISTER OF LABOUR MEMBATHISI MDLADLANA Parliamentary briefing and release of investigation into minimum wages and conditions of employment for farm workers
13 September 2001
I welcome you all to this press briefing. I would dearly have loved this briefing to have been different. I would have loved to have had seated at my side, and acting as chairperson a rather tall and heavy gentlemen with a wide smile and a small cell phone pinned to his ear. This is not to be.
Tragically, this weekend we buried Eddie Jiyaya, my media spokesperson. Eddie had a passion for issues dominating discussions around the labour market both as a journalist and as a communicator. He helped us tremendously in the last few months to ensure that we were able to effectively communicate through the media to the public about the many things we are doing and the strides we are making to meet expectations and demands of employers, workers, the employed and the unemployed. At this point I would like to pay my respects to his family and friends with a moment of silence. ...... Thank you.
Moving to the business at hand. During my budget speech on 18 May 2001, I spoke about how we, as a Department, were on course in terms of delivering to our key constituencies in the labour market - both on the legislative and institutional fronts.
Developments in recent months have reflected the dynamism of the labour market and how our social partners are adapting positively to the new legislative environment. This has been no more evident than during the current round of wage negotiations.
Robust negotiations have taken place with some disputes ending in strike action but the majority ending in settlement including in the large mining and metal sectors and the majority of the clothing sector.
Many settlements that have been reached, including in the car sector are for three year agreements. Not only does this mean that we are likely to see more industrial relations stability in the next period but also that more space exist for unions and employers to talk about other issues such as skills development and workplace equity. Something that I have been campaigning for.
The days of intense violence where anarchy reigned in workplaces around the country have been replaced by an industrial relations environment which has become more predictable and stable.
I hope that the recently concluded agreement at NEDLAC between government and organized business and labour will also contribute to stability in the labour relations environment. These, coupled with other government initiatives, are intended to encourage much needed foreign and local investment.
Mechanisms to improve efficiencies in the labour market and improve the protection of vulnerable workers are also reflected in the current amendments on the Unemployment Insurance Bill which I have already tabled before parliament.
The development of human capital too, is a critical factor in encouraging investment into the country. Time and time again we are reminded by the fact that underpinning economic development and sustainable growth is the development of human capital.
A lack of skills is a critical factor in determining a country's competitiveness and ability to operate successfully in the global economy. We are moving ahead swiftly to create a high skilled economy through the various provisions of the Skills Development Act. Recently, we saw the launch of the learnership programme which is intended to encourage greater access to training for the employed and unemployed, especially the youth. A critical component of a successful human resource development strategy is employment equity. Ahead of the World Conference Against Racism we launched our first report on employment equity. This report provided the first indications of how companies are beginning to adapt to the Employment Equity Act.
As United Nations secretary general Kofi Anan said at the start of the last week's conference: "South Africa is on track in dealing with discrimination". We are moving ahead to ensure the eradication of discrimination in the workplace. There is no place for those who continue to pursue discriminatory practices in the workplace.
So too is there no place for the continued exploitation of vulnerable workers or allowing un-safe workplaces to continue operating. We are beginning to get a grip on the problems around health and safety in the workplace while also putting in place an appropriate regulatory framework for vulnerable workers such as farm and domestic workers. As the state, we have a responsibility to protect vulnerable workers, who by virtue of their vulnerable state are on the margins of the labour market.
In July we unveiled a report on domestic work in the country and today we are releasing results of our intensive investigation into setting minimum wages and conditions of employment for farm workers.
The remainder of this briefing will focus on our farm worker report. More detailed notes on developments taking place around other policy issues is covered in the documentation that you have.
Release of report on investigation into minimum wages and conditions of employment for farm workers
I believe that the release of this report for public comment represents yet another step forward in giving effect to our promise for a better life for farm workers.
This report is an eye opener on what is going on in the agricultural community. It tells a story of poverty of farm workers and of relative prosperity for farmers. It takes us back into our apartheid history but it also takes us forward to confront the new challenges of global competitiveness.
The report is the result of a very thorough process. It included discussions with farmers and farm workers in public hearings across the country, an in depth look at the agricultural economy, case studies of approximately 70 farms and ground breaking research on the determination of poverty. The investigation revealed that apartheid left an indelible mark on the livelihoods of farm workers and their families. The 930 000 farm workers in South Africa remain to a very large extent voiceless and labour under feudal relations. Nowhere is the inequality in power relations between employer and employee so starkly etched as in the farming sector.
Farm workers and their families live in conditions of absolute and relative poverty. Children living on farms are more likely to be stunted and underweight than any other children including in the former homeland areas. Farm workers have the lowest rate of literacy in the country and 35% do not live in formal dwellings. The average cash wage in agriculture is R544 per month but this figure masks the high differentials between the best and worst wages.
On the other hand, the report tells us that the farming sector has generally benefited from the major changes, including deregulation, that it has experienced over the last two decades. The farming sector has been doing better since 1990 than in the periods before this.
In this context we sought to consider the role of minimum wages in improving the plight of farm workers. And our conclusion was that at this point in time setting a realistic and modest minimum wage can contribute to poverty alleviation, protect current employment and enable the agricultural sector to continue to grow. A realistic minimum wage can improve the condition of the most vulnerable workers including women workers.
The report however argues that the success of the minimum wage depends on the articulation of minimum wage setting with other government strategies aimed at improving the conditions of rural workers and their communities. These include the Integrated Rural Development Strategy, land reform, increased provision of energy and water to rural areas and improved access to education and health facilities.
In addition, we do not see minimum wage setting in isolation from other labour market initiatives to address the skills need of workers in this sector, improve access to social security, improved conditions for health and safety and improvement enforcement.
In this regard I am looking forward to increased collaboration and working together with both farmer and farm worker organizations. In June this year, the Department of Labour, organized agriculture represented by AgriSA and the National African Farmers Union (NAFU) and organized labour represented by the South African Plantation Workers Union (SAAPAWU) and the Farm and Allied Workers Union (FAWU) signed a joint vision statement for agricultural relations and committed ourselves to work together to achieve this vision. We committed ourselves to ensure that there is a skilled workforce working in a safe and secure environment under good working and living conditions to ensure a competitive agricultural sector.
The minimum wages proposed by the report range from R400 to R750 per month depending on the capacity of farms to pay. Detailed research was conducted to identify which farming areas are more or less or more profitable and on this basis magisterial districts were divided up into four categories each with their own wage level.
Payment in kind has and continues to form an integral part of remuneration of most farm workers. Doing away with this practice may on the face of it look progressive but in reality may lead to increased poverty. It is proposed that such payment be limited and should never exceed 20% of the cash wage. This deduction will only be allowed in the event that farmers provide accommodation of a certain standard and food.
A number of proposals were also made to amend the existing basic conditions of employment to more appropriately respond to the circumstances of farm workers. These include in respect of sick leave, working time, night work, termination of employment and provisions for small and new employers. Setting minimum wages and conditions of employment is no doubt a sensitive and potentially controversial issue. It is for this reason that we have decided to release the results of this investigation to the public for their comment until 13th December 2001.
The Employment Conditions Commission, a body that includes representatives of organised business and labour as well as individuals with expertise in respect of vulnerable workers, will consider the comments.
They will then make their final recommendations in the form of a draft sectoral determination which will include provisions on minimum wages and conditions of employment, to myself.
We hope that the report will spur an informed, constructive and vigorous debate on how to improve the working and living conditions of about a million workers and their families.
I will shortly be requesting an official from my Department to take you through the report but before I do that I would like to conclude by stressing a few points that we learnt from the release of the report on domestic workers.
Firstly the proposals in this report are exactly that: PROPOSALS for public debate and comment. They are not yet legally enforceable. There will be an extensive communication campaign preceding the release of the final legally binding sectoral determination.
Secondly, the wages that are set by government in sectoral determinations are ONLY minimums. Employers are free and encouraged to pay wages above these minimums. Workers are free to use this as a basis: as a tool and weapon to fight their cause.
Thirdly, and this is a call to my compatriots in the farming sector. Let us move away from our painful past and give all South Africans an opportunity to reap the fruits of our new democracy. Giving farm workers a better life, will lead to a better and more secure future for us all.