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Shopsteward Volume 26 No. 2

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COSATU Today  |  COSATU Speeches

Zwelinzima Vavi, COSATU General Secretary’s, address to the National Press Club, CSIR International Convention Centre

Zwelinzima Vavi, COSATU General Secretary’s, address to the National Press Club, CSIR International Convention Centre, Pretoria

6 March 2012

Mr Yusuf Abramjee
Members of this press club
Ladies and Gentlemen

Thank you very much for the opportunity to present our side of the argument to this august gathering of those who inform the opinion of millions of our people.

I have been asked to essentially answer a question – why we are marching in March?

We are marching against the labour brokering system and for the total scrapping of the inner-city e-tollgate system.

Our campaign against both labour brokering and inner-city e-tollgates is part and parcel of the war we are waging to salvage the working class from a further assault on its living standards.

Despite the political and social gains scored since 1994, the working class in this country continues to reel under the pressure of neoliberalism and the legacy of apartheid/colonialism. Poverty, unemployment and inequality are the three principal challenges facing the working class in the current period.

We recognise the major advances our country has registered under the ANC government. This includes delivery of basic needs, which has meant millions having access to housing, water, electricity, education, healthcare, etc.

However, most of these gains have been undermined by the slow pace of transformation in the economy, as well as the rampant commodification pursued through privatisation and other neoliberal programmes including the user-pay principle.

Today South Africa takes the first prize in terms of being the most unequal society in the world. The richest decile is earning about 94 times more than the poorest decile. Africans, who constitute 79, 4% of the population, account for 41, 2% of the household income from work and social grants, whereas whites, who account only for 9, 2% of the population, receive 45, 3% of income. The poorest 10% of the population share R1, 1 billion whilst the riches 10% share R381 billion. Our country is trapped in a developmental paradigm that has simply reproduced these conditions for 18 years now.

In terms of the expanded definition unemployment is currently at 35.4%. Income inequality in South Africa is the highest in the world and half of our population survives on 8% of the national income while the other half enjoys 92%. In 2007 approximately 71% of African female-headed households earned less than R800 a month and 59% of these in fact had no income, while 58% of African male-headed households earned less than R800 with 48% with no income. The educational profile of the unemployed reflects that over 60% of the unemployed have not completed matric level education.

One of the foremost indicators of the inequality characterising or society is unemployment, which discriminates according to race, gender and geographical location. Almost 25% of South African household experience hunger on a daily basis. An average member of a working class household lives on R18 a day, but many actually live on less; 6 million workers, 44%, live on less than R10 a day.

The rate of exploitation is increasing and business is raking even more profits than ever. Atypical forms of employment have increased tremendously with 30% of the work force being casualised.

Labour brokers

Labour brokers are the main drivers of the casualisation of labour. Their practices are the absolute contradiction to the principle of decent work. They have driven down workers’ wages and conditions of employment. They do not create any jobs but sponge off the labour of others and replace secure jobs with temporary and casual forms of employment.

The National Association of Bargaining Councils (NABC) suggests that there are 979, 539 labour broker workers in the country, significantly larger than suggested thus far.

Whilst most workers under labour brokers take home a pittance as a salary, their bosses reward themselves with millions.

Whitey Basson CEO of Shoprite earned the highest-ever monthly earnings ever recorded in a single year in 2010 – an unbelievable R627.53 million in salary, perks and share options. This contrasts sharply with the situation of many workers at Shoprite who take home peanuts on payday. Shoprite is but one example of a company that makes extensive use of labour brokers.

Shoprite Checkers have a staff compliment of about 73 000, of which 35% are full time with 5% being what is termed 40-hour full-timers/flexitimers and 60% comprised of various categories of variable time employees or casuals. Expansion or growth of Shoprite Checkers does not translate into employment growth but increases the intake of workers supplied by labour brokers.

At Pick n Pay there are 36 538 workers, of which 16 000 are full-time with almost 20 000 being varies categories of variable time employees or casuals supplied by the labour brokers. At Woolworths it is estimated that there is a ratio of 70% casuals to only 30% so-called permanent workers. In smaller retail companies the situation is much more dire.

To make this situation even worse, the face of casualisation is predominantly the black working class youth that is employed by labour brokers. The industry is an exploitative businesses designed to circumvent labour laws and regulations.

We demand a total ban of the labour brokers, a system we have described as human trafficking and modern day slavery.

COSATU notes the proposals made by government which include the following elements:

  • Limiting usage of labour brokers to temporary work not exceeding six months or to situations where employees work as substitutes, or in categories of work determined by the Minister of Labour in consultation with NEDLAC;
  • Immediate application of the principle of joint and several liability where the employee could cite both the client and the labour broker in CCMA and/or Labour Court proceedings;
  • Application of the principle of equal pay for work of similar value to employees of labour brokers, in relation to employees of the client company;
  • Amending Section 21 of the LRA to consider the extent of engagement of employees in atypical forms of employment in determining sufficient representativity.

We also note that Business seeks to dilute these proposals, especially the application of the principle of equal pay for work of equal value and have proposed 18 months as duration for temporary work. COSATU and NACTU are still adamant that one day under a labour broker is one day too long!

Why Labour Brokers must be banned?

  1. 1. Labour brokering is equivalent to the trading of human beings as commodities. Generally the main commercial contract is agreed to bcontracts associated with labour brokering and other forms of atypical labour.

COSATU and NACTU also reject the following exclusions, proposed by government and supported by business, from protections for employees in fixed term contracts:

Businesses that employ less than 10 employees and which employ less than 50 and have

  1. between the labour broker and the so-called “client” enterprise, which sets out the various stipulated labour services to be supplied and the price at which these services are to be supplied, whereas the true suppliers of labour (namely the workers) are excluded from this process, thereby undermining their rights to negotiate their wage and employment terms. The Constitution of South Africa guarantees a right to fair labour standards and the right to collective bargaining. The practise of labour brokering tramples both of these Constitutional protections of workers.
  2. Labour Brokers do not create jobs but merely act as intermediaries to access jobs that already exist, and which in many cases would have existed previously as permanent full time jobs
  3. Labour Brokers destroy permanent jobs as they lead to insecure contractual relations and downgrading of wages and employment terms
  4. Labour Brokers do not practise the principle of equal pay for work of equal value. Workers employed by the Labour Brokers work longer hours without any compensation, they work Monday-to-Monday and 365 days without any compensation for working on Sundays and public holidays.
  5. Apart from undermining collective bargaining rights, labour brokers also provide scab labour and therefore serve as strike breakers!
  6. Labour brokering, combined with other forms of atypical work, reflects the current trends of the intensification of the rate of exploitation of workers.
  7. Significant emphasis is placed on the commercial rationale of using labour brokers to lower costs for clients, which is commonly achieved by reducing wages and excluding employment benefits.
  8. Labour brokering allows employers to evade their obligations as stipulated in the LRA. This is tantamount to outsourcing labour relations to a third party.
  9. Workers under labour brokers are unable to enforce their rights against any party that may be identified legally as the employer. In cases where this may be imposed against the labour broker agency, its precarious financial standing, especially in cases on insolvency, renders workers’ rights of enforcement as merely notional.
  10. Increased regulation of the industry will not work because capacity constraints within the Department of Labour to enforce existing legislation and a ban against labour brokers may be administratively simpler than detailed regulation, thereby simplifying enforcement.
  11. Most of the workers employed by the labour brokers do not enjoy pension/provident funds, medical aid benefits, etc. The employers dump these workers into the government social security system, thereby increasing the state burden to provide for them in their pension life. This means the taxpayers are subsidising the employers to make super profits.
  12. Labour broker are also anti-trade unions because ‘their’ workers are constantly being moved around from one workplace to another within short periods, often with no access to union officials or the possibility of stop-order deductions for union subscriptions, they find it very hard to join a union or to remain members.
  13. Labour brokers contribute to the progressive de-skilling of workers, especially as a result of the short-term and irregular nature of the contracts associated with labour brokering and other forms of atypical labour.
  • Employees who are engaged on official public works schemes or similar public job creation schemes.

Labour also disagrees with the proposal by government and business proposal to exclude part-time employees from labour law protections during the first six months of their employment.

Open Road Tolling

We wish to convey also our total opposition to the introduction of open road tolling in Gauteng and the planned introduction of the same in other parts of the country including Durban and Cape Town amongst others, for the following reasons:-

  1. First and foremost, the tolls will add to the burdens of the poor of Gauteng and our country broadly, who will be forced to pay for travelling on the tolled roads.

The tolls will also put an indirect burden on the poor of the whole of South Africa, by adding to the cost of transporting goods within and to and from our industrial heartland. It will have an immediate effect on food inflation.

It is quite clear that if the tolling goes ahead, it will be extended to urban areas in other Provinces, spreading the pressures on the poor.

It is not true that the poor are not users of our motorways. Many low income earners in our country use private cars to travel to work, precisely because our public transport system is so unreliable. Public transport is also unavailable during outside of peak commuter hours, including weekends, when Gauteng residents travel distances across the Province to visit friends, attend funerals, etc.

Our second objection is that the tolls will perpetuate exclusion

We already live in a society highly divided by income disparities. The poorest 10% of the population shares R1.1bn whilst the richest 10% shares R381bn.

The logic of those who say that the poor do not use our motorways, except by public transport, is that they should be permanently excluded from access to the best roads. They must find the potholed side-roads to get from A to B, while the rich glide along in their fancy cars.

The toll roads are therefore a reminder of the divisions that still exist in access to basic services. Good health and education services currently belong to the wealthier sections of society, who can afford to pay. We do not want yet another addition to the list such divided services, especially in the context where good progress is being made in the health sector, to bring about one universal service.

Our third objection is that public transport is totally inadequate.

We acknowledge that government has now exempted registered public transport vehicles from the tolls. However, the fact is that public transport remains woefully inadequate both in quality and in the numbers of people that it serves.

A third of our people use private cars to get to and from work. This is not a free choice. It is because our public transport system is expensive, unsafe, and unreliable.

The promise of massive investment in our overcrowded, run-down commuter rail services is good news, but this will take years to come on stream. So where are the new bus services? Apart from the BRTs in Joburg and Cape Town, not a single new subsidised bus route has been put in place for over ten years! And where is the enforcement of safe conditions in the taxi industry?

The use of our motorways by private cars is therefore not a luxury for most users. If the users are forced off the motorways because of cost, they will not transfer to non-existent reliable public transport. They will take their cars onto the side roads, and create levels of congestion that our municipalities will not be able to cope with. Traffic management will become a nightmare, and it is highly likely that our already shocking road fatality statistics will rise.

Finally, the tolls represent a form of privatisation, which we have always been opposed to

COSATU has an unwavering record of being opposed to privatisation, and the introduction of a tolling system that brings in the private sector to operate the tolled roads is, in our view, nothing else but privatisation.

What makes it worse is that the contracts signed with the toll operators remain a secret. All the evidence indicates that the revenues from the tolls are going to be enormous and that the loans will be paid off quickly, leaving the private operator to milk the public.

This is why we have consistently argued that the fiscus must be directly involved in the funding of road infrastructure. If additional revenues have to be raised by government, then this must be done in a way where the burden is fairly shared through a progressive tax system. We pay taxes so that government can build and maintain roads, hospitals, schools, etc.

In the meantime, we are convinced that if more effort were put into stopping fraud and corruption, then the money would be easily available to cover the costs of road construction and maintenance.

For all of the above reasons, we demand the dismantling of the Gauteng motorway gantries, and the immediate halting, for good, of the Gauteng open tolls.

Patrick Craven (National Spokesperson)
Congress of South African Trade Unions
1-5 Leyds Cnr Biccard Streets

P.O.Box 1019
South Africa

Tel: +27 11 339-4911/24
Fax: +27 11 339-5080 / 6940
Mobile: +27 82 821 7456
E-Mail: patrick@cosatu.org.za