BASIC CONDITIONS OF EMPLOYMENT BILL:
SUBMISSION TO THE DEPARTMENT OF LABOUR AND TO THE PARLIAMENTARY COMMITTEE BY MANCO-FIBASA

INTRODUCTION : REPRESENTATIVE CHARACTER OF MANCO-FIBASA

Numerous SME groups have no voice in NEDLAC. MANCO-FIBASA represents a fair cross-section of such "un-aligned" employers including the following:
a) Athlone CMT Employers Association
b) Chemical Employers Association (Western Cape)
c) Independent Clothing Manufacturers Association (I.C.M.A.)
d) Mitchell's Plain Garment Manufacturers Association
e) National Milk Distributors
f) National Independent Employers Association of South Africa (N.I.E.A.S.A.)
g) Waste Contractors Association

PLUS
companies served by Frank Lighton, our executive director, a labour consultant with extensive experience of industrial court, conciliation board and CCMA hearings.

In addition we have through the Free Market Foundation obtained a copy of NAFCOC's representations on the Bill. We are in agreement with the views of NAFCOC in so far as its comments are concerned in relation to obvious additional burdens on Small Business but are perturbed that no reference is made by NAFCOC or the Free Market Foundation in relation to less obvious but equally important additional cost factors. We are equally perturbed by the fact that these less obvious factors also do not appear to have been raised at NEDLAC.

Part A of our submissions accordingly deals with the additional direct costs the bill will inflict on employers and Part B will deal with the equally important direct costs that will add to the problems of Small Business and adversely affect employment and the economy as a whole.

Big Business has sufficient personnel to attend Labour Court and CCMA hearings without disruption of its normal activities but in the case of "one man" enterprises the operation of his business can be seriously affected. Even medium sized factories with 30 or more employees are in the same category. To Big Businesss an out-of-court settlement or an award involving R20 000 or more is "nothing" - to a small concern it can mean financial disaster and add to the already unacceptably high level of unemployed.
The Central Statistical Service - CSS - recently released figures showing South Africa has lost 42 000 jobs in the first quarter of 1997; the hardest hit sector being manufacturing. SME's are through-out the world recognised as the engine for growth and prosperity and in South Africa great emphasis is placed on this sector as employment generators.

The Basic Conditions of Employment Bill, if it becomes law in its present form, add yet further restrictions on the growth of Small Business. Is it not time that NEDLAC was restructured to give Small Business a direct voice in this "parliament within a parliament"?

PART A : COMMENTS ON HOURS OF WORK AND OTHER DIRECT COST FACTORS
1) HOURS OF WORK:
We support the concept of a maximum working week laid down by statute with provision for more favourable conditions being negotiated under collective bargaining. Although the existing maximum is 46 ordinary hours, the actual working week varies not only from industry to industry but even within the same industry. For example, a recent survey in The Chemical Industry locally showed a range from 42 to 46 hours being observed. We agree with NAFCOC that a 45 hour maximum would be acceptable butrecommend no commitment to further reduction at this stage.

In regard to COSATU's demand for a 40 hour week, acceptance of even a time-table for reduction to 40 hours would be harmful to the economy and nullify the prospects of four and a half million unemployed currently seeking work at almost any price. We urge the authorities to stand firm in rejecting COSATU's threats of mass action as in our experience workers are no longer as willing to lose pay as during the apartheid years. Not only is there now a democratically elected government, but that government has, despite financial restraints, embarked on a visible programme to reduce the "legacy of apartheid". As a result, COSATU's recent one day stay-away was certainly not as widely observed in the Western Cape as in previous years. Although some firms such as clothing and chemical, reported 100% stay-away by union members, in others attendance was normal and in industrial areas such as Epping, it was "business as usual". Some employers indeed welcomed the "no work, no pay" stay-away as due to slackness of trade the loss in production caused no problems.

2) OVERTIME
NAFCOC's recommendation of 15 hours a week is supported as the security industry is not the only one in which long hours cannot be avoided. In the waste removal business, for example, it is necessary for heavy vehicles to set out early to avoid peak hour traffic congestion. Travelling to the many official dumping sites takes time and the number of loads dumped to make the service an economic proposition inevitably involves overtime. Furthermore, urgent calls involving after hours work may be received from ships in the docks or from builders who can only work if rubble is removed from sites. During loading and at dump sites there are ample opportunities to rest and overtime working in the waste removal trade is thus not stressfull. The additional earnings through overtime is welcomed by the drivers and van assistants involved.

Overtime work is thus a condition of employment but bona fide requests to be excused are not unreasonably refused e.g. if the worker has to be at home for personal reasons. Flexible working hours is thus essential. Any idea that restricted hours means more jobs must immediately be refuted - it only leads to less jobs where employers are forced to mechanise.

NAFCOC's 15 hours a week overtime is accordingly supported.
3) ANNUAL LEAVE
We urge that any extension of the existing 2 weeks should be left to collective bargaining. Whilst we support NAFCOC's view that provision should be made for payment in lieu of annual leave, this should not become the norm as annual leave is for health purposes. Occasions arise however in which workers are faced with unexpected expenses e.g. sickness in the family, and would welcome pay in lieu of leave and can afford to remain at work for that year without adverse affect on their health. In such instances employers should be permitted to grant the workers' request.

4) MATERNITY LEAVE
We believe that the existing provisions of the U.I.Act are adequate but would not oppose basic leave of 3 months as recommended by NAFCOC as the U.I.Act permits this to be exceeded where required by a doctor. Payment should however come from the U.I.Fund and not from the employer.

5) FAMILY RESPONSIBILITY LEAVE
As is already the practice in regard to sick leave, what is prescribed becomes the "norm"! As the bill now reads the 3 days is not even restricted to "per annum". It is in fact possible for more than one child to be fathered during the year by the same male or for illness/death to strike more than once a year. Occasions do arise in which a male employee requires time off to take his wife to a maternity hospital and bring her back if no relative or friend is available to do so. Such cases or illniss/death of an immediate family member are nomally treated as "compassionate leave" for which most employers treat each case on its merits.

We therefor do not recommend any provision of this nature as the natural relationship between employer and employee cannot be prescribed.

6) NOTICE OF TERMINATION OF EMPLOYMENT
The provisions of the existing B.C.O.E. Act have worked well and should not be changed.

7) PARTICULARS OF EMPLOYMENT
The particulars called for under section 38 are not normally set out in writing where SME's have neither the time nor the staff to do so. In fact, few SME's have written job descriptions as they rely on definitions in any wage determination or bargaining council agreement to define what, for example, a cutter, a boiler-maker or a general worker can do. Most information is given verbally on engagement of during induction. Only large concerns would be able to provide the details in writing. Prescribing that job descriptions shall apply is not practical and not acceptable.

8) CHAPTER 8 : SECTORAL DETERMINATIONS
The principle of incorporating provisions similar to those in the wage act is not opposed but provision must be made for employer and trade union assessors to assist the "authorised person" conducting an investigation.

We stronly object to determinations: - prohibiting or regulating task-based work,
- piece work, home work and contract work - 57(2) E and specifying conditions of employment for persons other than employers who work for another person.

It is of course acceptable to stipulate that persons on piece/task work must not receive less than the corresponding daily/weekly wage. The LRA already covers "labour brokers". Employers are increasingly employing "independent contractors" and labour brokers cannot undermine collective bargaining agreements/other legislation.

An independent contractor is however not an "employee" and the Minister should not be allowed on that account to "specify conditions of employment" (s.57 (2)(i)] for independent contractors. This would put the parties in a straight jacket as it is impossible to regulate every relationship between a contractor and a contractee.

9) "NIGHT WORK"
We would remind the Department that because of slavish adherence to the relative ILO convention, industry could for many years not employ women after 6 pm. Not a single industrialized country overseas observed this ridiculous restriction which the writer was instrumental in getting abolished in South Africa eventually.

To define "night work" as between 6pm. and 6 am. is equally ridiculous. We accordingly support NAFCOC's recommendation that night work should be limited to shifts between 10 pm. and 6 am. Except
that this should not only apply to "very small businesses".

PART B
a) COMPLIANCE ORDERS AND UNNECESSARILY PROTRACTED AND CUMBERSOME MACHINERY FOR COMPLIANCE

b) PROCEDURE FOR DISPUTES: INCORPORATING OF LRA PROVISIONS

a) CUMBERSOME MACHINERY FOR UNDERPAYMENTS AND CONTRAVENTION OF "COMPLIANCE ORDERS"
The writer was on the staff of the Labour Department at its inception and as such during World War II shared responsibility for the training of inspectors and introduction of standard procedures at Cape Town with resultant saving in time and expense not only to the Department but to employers and employees concerned.

First requirement was a standardised inspection report setting out the alleged contraventions and a schedule of alleged underpayments. This report was handed in to a senior official who first satisfied himself concerning the allegations and assessments before sending a standard letter to the employer requesting him to reply within a specified period. If the employer admitted "unconditional liability" for any underpayments, the money had to be paid into the Department for handing over to the employee(s) underpaid at no cost to the workers concerned.

There will always be a minority of employers who deliberately underpay but in the vast majority of cases, underpayment is unintentional and readily admitted. The system worked speedily and well and did not cost the employees one cent to recover any underpayments due to them. The only delaying factor was when the Department considered that the contraventions warranted prosecution of the employer. In Cape Town the Department of Justice provided a public prosecutor experienced in labour matters in the same way as is done for traffic offenses, etc. and despite the delay, if the employer was found guilty of underpayment, the amounts due were made a court order where under payment has to be to the Department of Labour for transmission to the employees concerned - again at no cost to those concerned.

MANCO-FIBASA's CRITICISM OF THE RELEVANT PROVISIONS OF THE BILL
Firstly, there is no provision for "vetting" of compliance orders by a senior official. Secondly, the inspector in relation to contraventions not involving underpayments can quote the maximum appropriate fine ranging, according to number of previous contraventions, between R4 000 and R20 000 - enough to scare the pants off any small employer and leading to possible bribery and corruption. The situation is worse if underpayments are involved - up to 200% of the amount due plus interest!

And what if the employer refuses to pay? Firstly, he can appeal to the Director-General but if his objections are not upheld, he can appeal to the Labour Court - a time consuming and expensive procedure. S.79 says the above does not prevent the Small Claims Court being requested to recover monies due in terms of the Act. Thus both employers and workers may have to take action to protect their interest in an unnecessary and involved manner.

Presumably this cumbersome machinery is because only five catergories of offenses are classed as criminal offenses e.g. victimising an employee or obstructing an inspector. Underpayments are thus classed as civil matters whereas deliberate underpayment is tantamount to stealing money due to workers - is this another attempt to curry favour with ILO?

b) DISPUTE PROCEDURE (SECTION 82)
1) Whilst the principle of incorporating dispute mechanisms from the LRA is accepted, it is premature to
do so in the light of proven defects in that machinery.

2) MANCO-FIBASA accordingly recommends that the defects referred herein be first addressed and in
this regard has certain proposals - see Annexure A.

3) We also believe the dispute machinery eventually to be provided in the B.C.O.E. Act should cover all
disputes and not only "protection of rights" as per section 81.

4) Resolution of disputes: Part C of LRA (section 145 onwards)
The Wiehann commission resulted in widespread amendments to the law and were widely acclaimed except by MANCO-FIBASA - as introducing a new era in industrial relations. Whilst welcoming abolition of apartheid in industrial legislation, MANCO-FIBASA critisised the wide definition of "unfair labour practices" and creation of industrial courts/industrial appeal courts as likely to become unworkable in practice. The Cheadle commission's subsequent recommendations were widely acclaimed - again with the exception of MANCO-FIBASA - as another "new era" in which dispute resolution would be quick, fair and inexpensive. MANCO-FIBASA prophesized that it would not be many years before another commission would be required to review chaos created by acceptance of Cheadle's recipe for industrial peace!

Although it is not even a full year since the new LRA was introduced, the problems we envisaged are already being felt increasingly. We deal with these in annexure A to prove that what Cheadle recommended is being progressively undermined by exactly the same factors as caused the collapse of the relevant recommendations of Wiehann.

5) Unions now increasingly use the threat of costs and delays to obtain out-of-court settlements. And despite settlements at the conciliation stage, the number of cases going to arbitration is increasing and the delay on that account is widening, forcing the CCMA to employ expensive part-time commissioners as well. Bargaining councils are still gaining experience in regard to conciliation procedures and the number of cases going to CCMA or the Labour Court is escalating.

6) Unlike under the old CB system there is no "vetting" of disputes. Under the old legislation the Minister had to be satisfied that a "dispute" existed before granting a conciliation board. Today, all disputes, however nonsensical or frivolous, are dealt with - a terrible waste of time and money. In Annexure A we quote specific examples and propose certain remedies.

PART C : PRACTICAL SUGGESTIONS TO REMEDY THE SITUATION
From Annexure A it will be seen that existing dispute mechanisms are not always speedy, inexpensive and effective.

A few suggestions:
A) At present no record is made of conciliation meetings - the chairman merely issues a certificate that the dispute has been settled/not settled. This means that the whole procedure has to be repeated if Labour Court/CCMA proceedings have to follow.

Recommendation no.1: That the chairman of the conciliation meeting furnish minutes which can be used firstly to determine whether a valid dispute exists and secondly to give the arbitrator a "preview" of the situation he is called on to meet. Both sides should receive copies of the minutes.

The chairman should also add his own reasonings, findings and recommendations. Although the chairman cannot arbitrate, his views in writing could give both sides an opportunity to consider carefully before taking the next step. Some arbitrators have in fact asked what transpired at the conciliation stage but have been faced with rulings by chairmen that what transpires at conciliation is "without prejudice" and "cannot be quoted". Some unions make no attempt at conciliation as they wish to pressurise employers into settlements. If they were aware that their tactics would be reflected in the minutes they will adopt a more reasonable attitude.

Recommendation no.2: That the minutes and report be used by the registrar of the Labour Court/CCMA to decide whether the Court/CCMA is willing to take the alleged dispute further. This "vetting" process could eliminate cases of a frivolous nature and reduce the load on the Court/CCMA.

B) Arbitration award. At present these are quite intended to be "final and binding" but the common law rights off an aggrieved party to seek review have not been recognised. At present about the only avenue of redress is if the aggrieved party can prove the arbitrator was "corrupt"!

Recommendation no.3: That aggrieved parties can appeal to the Chief Commissioner for the area who will be assisted by a competent employer-nominated assessor and a union-nominated assessor.