Farm worker minimum wage set at R105 per day - Mildred Oliphant
Farm worker sectoral determination review
4 January 2013
Welcome to this press briefing. A special welcome to the members of the Employment Conditions Commission (ECC): The chairperson Professor Ingrid Woolard who joins us from Cape Town via video link and Professor Adriaan Van Der Walt, a government appointee who is here in Pretoria.
Today we have called you in to give feedback on the process the Department has been involved in following the labour strife that engulfed farmworkers, especially in the Western Cape as well as announce the Minister's recommendation for the minimum sectoral wage which is effective from March 1 2013.
This is more than just a report back, but also a testament of the Government's resolve to respond appropriately to the plight of those who are vulnerable in society. Without a doubt, farmworkers and domestic workers fall within this group and this department will do its utmost to ensure that we make not only their lives better, but design a better deal for labour in general. But first let us recap how we got here.
In November 2012 farmworkers in the Western Cape went on strike demanding R150 per day as the minimum wage. Government responded by sending senior representatives including Ministers to intervene and resolve the strike. We did this by bringing parties together to negotiate a settlement.
Here is a brief look at what was done at the time to try and resolve the situation:
- On 10 November 2012, the Minister of Agriculture, Forestry and Fisheries called a meeting to urge parties to resolve the strike through negotiations. The meeting collapsed as employers indicated that they did not have a mandate to enter into discussions regarding wage increases. Instead, they proposed that negotiations should be held at the farm level
- On 12 November 2012, DAFF Minister called another meeting with employers again to persuade them to negotiate with the trade unions. Again there was no favourable response from employers.
- On 15 November 2012, the Department of Labour (DoL) published two notices in the Government gazette announcing the intention to cancel the sectoral determination and also announced the start of a process to review minimum wages in the agricultural sector.
- On 16 November 2012 after the publication of the two notices, DoL convened a meeting with AgriSA and other employer organizations to initiate a process of negotiations. They agreed to such a process, and agreed also to coordinate a delegation of 10 members from the sector to negotiate on their behalf.
- Government also appealed to parties to make a joint submission to the ECC before it made its recommendation to the minister.
During the negotiations, the following parties participated: AgriSA, Agri-Sector Unity Forum, Afasa, LWO employer's organization, AWETUC, Farm workers Dwellers Forum, Food Sovereignty Campaign, Women on Farms Project, Mawubuye Land Rights, United Democratic Front, Food and Allied Workers Union, Cosatu, Cape Agriculture Employers Organization and TAU-SA.
The first negotiation meeting between the parties was in held on 22 November 2012 under the auspices of the CCMA. During the negotiations the following was agreed to by the parties:
- Overarching framework for conducting negotiations
- That the negotiations will be conducted within the ambit of the Labour Relations Act, of 1995 and Basic Conditions of Employment Act 75, of 1997.
- Parties agreed that there is a sense of urgency in finding a solution to the dispute, which also necessitated a consideration of options outside of the legislative framework
- That the challenges confronting the sector can be categorised into short term and medium to long term.
After a list of demands by labour was tabled, parties agreed to adopt the following:
- That issues relating to wages; dismissal; disciplinary action; evictions and intimidation on the farms should be addressed as a matter of urgency.
- That a two-aside task team be appointed and establish a mediation task team which will evaluate and assess all complaints brought by workers and farmers
- That the mediation task team would attempt to resolve the issues through a process of facilitation and negotiations
- That in the event the dispute remains unresolved; it will be referred to the relevant and appropriate forum or institution that has the legal mandate to address the complaint.
- That the task team would engage the Bureau for Food and Agricultural Policy (BFAP), as proposed by AgriSA and supported by all parties, to provide an agricultural economic analysis that will inform the parties in their negotiations.
- That the next plenary meeting would be held on 29 November 2012, in Cape Town, where the report by the BFAP would be discussed. Parties duly met but negotiations could not take place as the BFAP report was not ready and consequently, Labour indicated that they are going back on strike.
Alongside the negotiation process, DoL commenced a process of public hearings conducted throughout the country to obtain inputs from the entire sector for purposes of reviewing the sectoral determination. This process was concluded on 18 December 2012 in all provinces except for the Western Cape where hearings were concluded on the 20 January 2013.
During the public hearings, 483 employers/employer organizations attended, whilst 1145 employees/employee organizations attended and made meaningful inputs. Throughout the hearings, workers and their representatives continued to demand R150 per day whilst employers wanted to wait for the results of BFAP. They also wanted the report to be factored in in the review of minimum wages.
Early this year on 4 January, the Director-General of DoL met with the parties again to try and persuade them to resume negotiations under CCMA auspices. Employer parties still maintained that they did not have a mandate to discuss minimum wage increases and thus no negotiations took place. He also met the parties again on January 7 and 8 but no solution was found.
As indicated, DoL had already commenced with the review process alongside the negotiations processes. The investigation by the Department and the ECC has been duly completed and the report with recommendations was forwarded to the minister.
When considering the report by the ECC, the BCEA requires that amongst other issues, the ability of the employer to conduct business successfully; the impact that the proposed wage will have on job creation and job retention; the impact of the minimum wage on poverty alleviation; and the impact that it would have on the cost of living should be considered. In addition, the ECC in its report indicated that when making its recommendations to me, they were also guided by the BFAP report.
The BFAP report, which I am sure you are privy to, made a number of conclusions. There is no need to go through all of those except to these highlights:
- That the average wage base of farm workers is R84.90 per day
- That if the average wage increases to more than R104, 98 per day, many farms will be unable to cover their operating expenses, and hence not be able to pay back borrowings or to afford entrepreneurs remuneration.
- The study also indicated that the real problem is that even at what it seems to be an unaffordable minimum wage of R150 per day; most households cannot provide the nutrition that is needed to make them food secure.
- That none of the hypothetical typical rural Western Cape wage earning households presented can actually afford an energy adequate and nutritionally balanced daily food intake (as seen in ‘balanced daily food plate' option 1) - not even a household with two adults earning a wage of R150 per worker per day.
Consequently, the ECC had to take into consideration and balance a number of factors. Having duly studied and considered the recommendations by the majority members of the ECC, I would like to announce the following in relation to the new minimum wage level and minimum wage increases during the subsequent years,
- That the new level of the minimum wage for 1 March 2013 to 28 February 2014 be pegged at R105 per day for employees who work 9 (nine) hours a day or R11.66 per hour, R525weekly or R2274.82 per month
- That the new sectoral determination be promulgated for a three year period and that during year two and three, wages be increased by CPI (Quintile 1) plus 1.5%
In line with the new minimum wage, DoL will, towards the end of term of the new wage dispensation, undertake a similar study to assess the impact of the new wage in the sector. In addition, DoL will also forward the BFAP report to NEDLAC for consideration in dealing with the long term issues relating to the transformation of the agricultural sector in South Africa.
I would urge organised business and labour in the agricultural sector to use this opportunity to come together to find ways of improving labour relations in their sector. As the National Development Plan 2030 states and I quote:
"The relationship between farmers and farm workers is difficult and needs to be far better to achieve agricultural expansion, higher employment and better living conditions" (NDP, page 233).
It is time to begin working together towards a vision for the farming sector, one in which the sector expands and creates jobs and where there are better relations between farmers and farmworkers and their organisations.
Government would like to thank those farmers who have come to the party and have negotiated in good faith with their employees or their representatives. Agriculture is an important sector of our economy and it is imperative to ensure that it is stable at all material times.
We would also like to urge those who still have not engaged in meaningful negotiations to do so. After all, a healthy working relationship between the employer and the employee makes good business sense. /Ends
Statement issued by Minister of Labour, Mildred Oliphant, February 4 2013
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