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ECC

UNSKILLED LABOUR
SECTOR
REPORT

REPORT

OF

THE

EMPLOYMENT

CONDITIONS

COMMISSION

ON

THE

INVESTIGATION INTO THE UNSKILLED LABOUR SECTOR, SOUTH AFRICA.

CHAPTER ONE........................................................................................................................................4
1.
1.1.
1.2.

INTRODUCTION.......................................................................................................................4
BACKGROUND TO THIS INVESTIGATION.......................................................................4
TERMS OF REFERENCE........................................................................................................5

1.3.

METHODOLOGY.....................................................................................................................6

1.3.1.
1.3.2.
1.3.3.
1.4.

PHASE ONE INFORMATION GATHERING....................................................................6


PHASE TWO CONSULTATION WITH STAKEHOLDERS.............................................7
PHASE THREE ECC PROCESS........................................................................................11
STRUCTURE OF THE REPORT...........................................................................................11

CHAPTER TWO.....................................................................................................................................12
2.1.
2.2.
2.2.1.
2.2.2.
2.2.3.
2.2.4.
2.2.5.
2.2.6.
2.2.7.
2.2.8.
2.3.

DESCRIPTION OF THE TRADES........................................................................................12


Trades with protection..............................................................................................................16
Manufacture of glucose, dextrose, cornflower, starch or gelatine.......................................16
The manufacture of fertiliser, Purification, grinding or packing of salt (sodium chlorite),
and Waste glass recovery..........................................................................................................16
Construction plant hire service, Demolition of buildings, Excavating, levelling and
pumping sand, soil and gravel, and preparing sites for building or other purposes..........16
Carpets and Mending of hessian, other bags..........................................................................17
Quarrying and Stonecrushing.................................................................................................17
Nightsoil removal, Sale or delivery of sand, Shipping agencies, Delivery services, including
messenger services (except delivery by means of power driven vehicles.), and Bunkering....17
Waste paper recovery...............................................................................................................18
Maintenance of agricultural/industrial show grounds..........................................................18
Trades without protection........................................................................................................18

CHAPTER THREE.................................................................................................................................19
3.1.
3.1.1.
3.1.2.
3.1.2.1.
3.1.2.2.
3.1.2.3.
3.1.2.4.
3.1.3.
3.1.3.1.
3.1.3.2.
3.1.3.3.
3.1.3.4.
3.1.4.
3.1.4.1.

The feasibility of having a sectoral determination.................................................................19


Garden Services........................................................................................................................19
Pest Control...............................................................................................................................20
Views of Employees...................................................................................................................21
Views of Employers...................................................................................................................21
Departmental Recommendations............................................................................................21
ECC Recommendation.............................................................................................................21
Tending of racehorses...............................................................................................................21
Views of Employees...................................................................................................................22
Views of Employers...................................................................................................................22
Departmental Recommendations............................................................................................22
ECC Recommendations............................................................................................................22
Funeral Undertaking................................................................................................................22
Views of Employees...................................................................................................................23
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Unskilled Labour Sector ECC Report

3.1.4.2.
3.1.4.3.
3.1.4.4.
3.1.5.
3.1.5.1.
3.1.5.2.
3.1.5.3.
3.1.5.4.
3.1.6.
3.1.6.1.
3.1.6.2.
3.1.6.3.
3.1.6.4.

Views of Employers....................................................................................................................23
Departmental Recommendations.............................................................................................23
ECC Recommendation..............................................................................................................24
Manufacturing of bone meal....................................................................................................24
Views of Employees....................................................................................................................24
Views of Employers....................................................................................................................24
Departmental Recommendation...............................................................................................24
ECC Recommendation..............................................................................................................24
Manufacturing of food for domestic animals.........................................................................24
Views of Employees....................................................................................................................25
Views of Employers....................................................................................................................25
Departmental Recommendations.............................................................................................25
ECC Recommendations.............................................................................................................25

CHAPTER FOUR....................................................................................................................................26
EVALUATION IN TERMS OF ECC CRITERIA................................................................................26
The alleviation of poverty........................................................................................................................26
Cost of living.............................................................................................................................................28
Other information that could be relevant to the ECC..........................................................................28
Conclusions...............................................................................................................................................30

Tables
Table 1: Schedule of Information Sharing Sessions: Dates, Venues & Attendance....................................8
Table 2: Organisation Visited: Province, City or Town, Trade, Name of Organisation...............................8
Table 3: Schedule of Public Hearings: Province, City or Town, Dates, Venue and Attendance...............10
Table 4: The 24 trades reviewed................................................................................................................12
Table 5: A brief description of the trades and the economic sectors in which they are located................12

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Unskilled Labour Sector ECC Report

CHAPTER ONE
1.

INTRODUCTION

In accordance with Section 54(3) and (4) of the Basic Conditions of Employment, Act 75 of 1997
(BCEA), the Employment Conditions Commission (ECC) presents you with a report on the
investigation into the Unskilled Labour sector.

1.1.

BACKGROUND TO THIS INVESTIGATION

When the Basic Conditions of Employment Act (BCEA) of 1997 came into effect, one of the already
existing wage determinations was the Unskilled Labour Wage Determination. This determination
automatically became a sectoral determination, but was not subsequently amended. As a result, some of
the conditions in the determination were inferior to those provided for in the BCEA. Further, with no
amendments to the prescribed minimum wages, there was a serious decrease in the real value of the
wages.
The Employment Conditions Commission (ECC) recognised, however, that some form of protection was
still necessary in the unskilled labour sector. In respect of the sector and/or trades covered by the
Unskilled Labour Determination, the ECC recognized the need for an investigation to determine whether
any of these sectors/trades were accommodated or covered through other means and whether any of
them still required protection by means of specific sectoral determinations.
As a result, a preliminary investigation was commissioned by the Department of Labour (DoL), which
found that the complete cancellation of some of the wage determinations would adversely affect
employees in certain sectors. The results of the preliminary investigation commissioned by the DoL
found that complete cancellation of some of the unskilled labour wage determinations would adversely
affect employees in these sectors:

Unskilled Labour (WD 467) determination cuts across many labour-intensive sectors
employing some of the most vulnerable employees. The view was expressed because this
determination covers the largest number of unskilled workers, to cancel it without replacing
it with a new sector determination would leave a large number of those workers without any
wage protection.

Funeral Undertaking (WD 470) determination is staffed mainly by managers, undertakers


and a few general workers and it was felt that this determination could perhaps be merged
with the unskilled sector to cover the general workers in the sector.
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Unskilled Labour Sector ECC Report

Stone-crushing Industry (WD 475) determination if cancelled would leave vulnerable


unskilled workers in this sector without minimum wage protection. This determination
covers a large number of unskilled workers and stakeholders would like to see the sector
investigated.

Cement Products Industry (WD 448) has no bargaining council or agreement applicable
and inclusion with the Unskilled Labour determination could be considered to protect
vulnerable workers, lest employees be left open to exploitation.

As a result of these findings, the Department of Labour has commissioned a research to examine
conditions of employment and wages in respect of unskilled workers in 24 trades spread among specific
economic sectors

1.2.

TERMS OF REFERENCE

The Department published a notice in the Government Gazette No 32933 of 05 February 2010 under
Government Notice No 69. The notice called upon interested parties to send written representations to
the Department within 90 days of publication of the notice. The terms of reference for the investigation
into the Unskilled Labour sector were set out as follows:
(a)

(b)

To investigate the following cancelled wage determinations:


(i)

Wage Determination 488: Cement Products Industry

(ii)

Wage Determination 467: Unskilled Labour Industry

(iii)

Wage Determination 475: Stone Crushing Industry;

To establish the feasibility of grouping them together in a single determination for the
Unskilled Labour;

(c)

To determine how best to group all classes of employees in the under-mentioned sectors
in the Republic of South Africa:
1.

Brewing or bottling of beer and/ or mineral water.

2.

Bunkering

3.

Cement products.

4.

Construction plant hire services.

5.

Delivery services, including messenger services.

6.

Demolition of buildings.

7.

Excavating, levelling or pumping of sand soil or gravel.

8.

Garden services.

9.

Maintenance of agricultural or industrial show grounds.


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Unskilled Labour Sector ECC Report

(d)

10.

Manufacturing of bone meal.

11.

Manufacturing of carpets.

12.

Manufacturing of food for domestic animals.

13.

Manufacturing of fertilizer.

14.

Manufacture of glucose, dextrose cornflower, starch or gelatin.

15.

Manufacture or mending of Hessian, jute or other bags.

16.

Manufacture of tanning extract

17.

Pest control services

18.

Preparing sites for building or other purposes.

29.

Purification, grinding or packing of salt.

20.

Quarrying including stone crushing

21.

Shipping agencies

22.

Tending of racehorses

23.

Water paper recovery

24.

Funeral undertaking

To make recommendations regarding wages and working conditions in the Republic of


South Africa pertaining to this sector.

1.3.

METHODOLOGY

A four-phased project framework was developed for this investigation, as follows:


1.3.1. PHASE ONE INFORMATION GATHERING
The purpose of the first phase was to address the administrative aspects of the investigation and identify
areas of focus. The administrative aspects dealt with in this phase included, in particular,

the publication of a notice in the government gazette as required by section 52(3) of the BCEA,

the processes to ensure that the appropriate legislation was complied with in respect of the
investigation of the unskilled labour sector,

As an addition the Department commissioned a preliminary study into the unskilled labour sector to
report on the gap that has been left by the cancellation of Wage Determination 467, Unskilled Labour,
published under Government Notice R.259 of 30 March 2007. The study found that Wage Determination
467 was applicable to unskilled workers in 39 trades and was made to specifically address the question
of wages for the most vulnerable workers, i.e. those employed as unskilled workers in the lowest

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Unskilled Labour Sector ECC Report

category of employment such as general workers not covered or subject to any other wage determination
or bargaining council agreement.
The cancellation of 18 wage determinations from 1 June 2007, left thousands of employees without the
protection of a minimum wage. These exclude workers that are covered by a BC. The preliminary study
recommended that by providing a minimum wage for the unskilled labour sector would address
vulnerability in respect of the unskilled labour sector.
As a result of the findings of the preliminary study the department commissioned research. The research
had to address the criterion set out in the BCEA and in addition provides the following information.
1.

Labour market information on:


(i)

Labour force composition

(ii)

Conditions of employment

(iii) Wages
2.

Other measures currently regulating wages and conditions in these sectors

During the first phase of the research process, the researchers developed a literature review (secondary
research) which included:

Desktop analysis economic profile and structure

Analysis of data

Analysis of both cancelled sectoral determination and the existing sectoral


determinations, and collective bargaining agreements

Review of other sources with relevant information

The second phase of the research process was the primary research which included:

Stakeholder interviews

Sample survey (900 employers and 1087 employees)

1.3.2. PHASE TWO CONSULTATION WITH STAKEHOLDERS


After the completion of the research process, the Department conducted information sharing sessions in
order to disseminate the research report and findings. In ensuring extensive consultations, all nine
provinces were visited during the information sharing sessions. Stakeholders in the sector, i.e. employers
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Unskilled Labour Sector ECC Report

(including employers organisations) and employees (including labour unions) were invited to be part of
these sessions.
Information sharing sessions were conducted nationally in all provinces. The table below shows the
information sharing sessions together with sites visits schedule and attendance figures:
Table 1: Schedule of Information Sharing Sessions: Dates, Venues & Attendance
Province

City or
Town

Date and Time

Eastern Cape

Port Elizabeth

2010/08/16 10:00

Gauteng

Pretoria

2010/08/16 10:00

Limpopo

Polokwane

Mpumalanga

Nelspruit

Number of
Employees

Number of
Employers

Labour Centre Boardroom

Laboria House Room 101 Boardroom

2010/09/09 10:00

Site Visit

30

2010/09/10 10:00

Provincial Boardroom

2010/09/15 10:00

Labour Centre Boardroom

2010/09/16 10:00

Site Visit

2010/09/07 10:00

Site Visit

21

2010/09/08 10:00

Rustenburg Old Town Hall

18

2010/09/16 10:00

Site Visit

22

11

2010/09/17 10:00

Provincial Boardroom

12

2010/09/20 10:00

Provincial Boardroom

2010/09/21 10:00

Site Visit

2010/10/05 10:00

Sites Visit

15

2010/10/06 10:00

Free State Provincial Office Boardroom

10

Total (Sites Visit)

99

31

Total Information Sessions

38

26

Total

137

57

North West
Northern Cape
Western Cape
Free State

Rustenburg
Kimberley
Cape Town
Bloemfontein

Venue

Subsequent to both information sharing sessions and public hearings, site visits were arranged which
was another effort to interact with employees and employers in their workplaces and issuing them with
questionnaires to complete. The questionnaire required information regarding the current status
conditions of employment and wages paid in the sector. In compiling this report, inputs received through
the questionnaires were incorporated. The following table reflects the organisations visited during the
site visits.
Table 2: Organisation Visited: Province, City or Town, Trade, Name of Organisation
Province
City or Town
Trade
Name of Organisation
Eastern Cape

Port Elizabeth

Courier

Courier it
Talisman Plant & Tool hire

Gauteng

Johannesburg

Tending of Racehorses

Limpopo

Polokwane

Cement

Brick & Pave City

Cement

Concrete Image

Funeral Undertaking

Northern funerals

Quarry and Stone Crushing

Rockcotta Crete

Cement and Stone Crushing

Kwano Bricks

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Unskilled Labour Sector ECC Report

Mpumalanga

Witbank

Waste Paper Recovery

Anti waste

Cement and Stone Cra

Lafarge Cement

Funeral Undertaking

AVBOB

Funeral Undertaking

Doves funeral co

Funeral Undertaking

Northern funerals

Funeral Undertaking

Bopape funerals

Cement and Stone Cra

Red Rock Tombstone

Funeral Undertaking

Capricorn funerals

Funeral Undertaking

Zenzele Funeral Undertakers

Brewing or bottling beer/mineral water

Coca-Cola (Shanduka Beverage)

Brewing or bottling beer/mineral water

SAB
Quma Plastic CC

North West

Northern Cape

Western Cape

Rustenburg

Kimberley

Cape Town

Quarry and Stone Crushing

Kudu Granite

Quarry and Stone Crushing

Red Graniti S.A

Pest Control

Rustenburg Pest control

Funeral Undertaking

Motsisi funerals

Funeral Undertaking

Everest Funerals

Pest Control

Kill-A-Bug

Funeral Undertaking

Family Friends

Manufacturing of food for domestic


animals
Funeral Undertaking

Leeufontein Voere B.K

Funeral Undertaking

Galeshewe Funerals

Funeral Undertaking

Tsepang Funeral Parlour

Funeral Undertaking

AVBOB

Funeral Undertaking

DHL Worldwide Express

Courier

THWI Trading

Mineral Waters

Water @ waterworks co

Courier

Time Freight

Courier

Debonaire Lawns

Garden Service

SKYNET corrier

Courier

Keipoletse Funerals

Cement

Eureka Bricks & Blocks

Cement

AJ Bricks & DBL Transport

Cement

Pro Brick and Block CC

Funeral Undertaking

Avbob Bellville

Funeral Undertaking

Harmony Funeral Services

Waste Paper Recovery

Cape Waste Paper

Williams Funeral Undertaker

On the Dot
George
Free State

Kwa-Zulu Natal

Bloemfontein

Durban

Cement

Lafarge Quarry

Funeral Undertaking

AVBOB

Funeral Undertaking

Twilight funeral service

Funeral Undertaking

Turningheads funeral services

Garden Service

Garden service- Mangaung

Funeral Undertaking

Ncanda Funeral Parlour


Ubambo Resources HR consulting

Richards Bay

Garden Services

Ridgeview Crushing Plant

Cement

Quary Lafarge

Funeral Undertaking

Thembalabantu Funeral Service

Funeral Undertaking

AVBOB funeral service

Funeral Undertaking

Izwelethu garden service

Funeral Undertaking

Doves funeral service

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Unskilled Labour Sector ECC Report

Subsequent to the information sharing sessions, public hearings were conducted in all provinces. The
table below shows both public hearing together with sites visits schedule and attendance figures:
Table 3: Schedule of Public Hearings: Province, City or Town, Dates, Venue and Attendance
Province
City or Town
Date and
Venue
Number of
Time
Employees
Eastern Cape

Free State

Gauteng

Kwazulu Natal

Limpopo

Mpumalanga

North West

Northern Cape

Western Cape

Port Elizabeth

Number of
Employers

2010/10/05 10:00 Sites Visit

2010/10/06 10:00 Port Elizabeth Provincial Boardroom

27

15

East London

2010/10/07 10:00 Labour Centre Boardroom

11

13

Mthatha

2010/10/08 10:00 All Saints Hall

25

15

Bloemfontein

2010/10/13 10:00 Free State Provincial Office Boardroom


2010/10/13 13:00 Site Visit

4
0

2
0

Bethlehem

2010/10/14 10:00 SAPS Bethlehem Sport & Recreation Club

11

Welkom

2010/10/15 10:00 Protea House

12

Pretoria

2010/10/04 10:00 Head Office Boardroom

19

13

Alberton

2010/10/05 10:00 Labour Centre Boardroom

11

Boksburg

2010/10/06 10:00 Labour Centre Boardroom

10

Randfontein

2010/10/07 10:00

Vanderbijlpark

2010/10/1110:00

14

Durban

2010/10/12 10:00 Site Visits

17

2010/10/13 10:00 Provincial Boardroom

20

Richard's Bay

2010/10/14 10:00 Municipal Auditorium

14

10

Newcastle

2010/10/15 10:00 Majuba Lodge

Polokwane

2010/10/12 10:00 Sites Visit

Thohoyando

2010/10/13 10:00 Moufhe Lodge

10

30

Tzaneen

2010/10/14 10:00 Fairview Lodge

27

Polokwane

2010/10/15 10:00 Provincial Office Boardroom

12

Witbank

2010/10/26 10:00 Site Visit

21

Nelspruit

2010/10/27 10:00 Labour Centre Boardroom

Ermelo

2010/10/28 10:00 Msukaligwa Municipality Civic Centre

Witbank

2010/10/29 10:00 Labour Building Boardroom

12

Rustenburg
Mafikeng

2010/10/19 10:00 Sites Visit


2010/10/20 10:00 Rustenburg Old Town Hall
2010/10/21 10:00 Getaway Guest Lodge

12
4
6

2
6
9

Klerksdorp

2010/10/22 10:00 Pyramids No 1

Upington

2010/10/27 10:00 Sites Visit

Upington

2010/10/28 10:00 Protea Hotel Upington

Kimberley

2010/10/29 10:00 Provincial Boardroom

Cape Town

2010/11/01 10:00 Provincial Boardroom

George

2010/11/02 10:00 George Museum

13

16

West Rand District Municipality


Mayoral's Parlour Emfuleni Local Municipality

2010/11/03 10:00 Site Visit


Total (Sites Visit)

72

Total Public Hearings

242

241

Total

314

250

The hearings thus provided information from a total of 250 employers and 314 employees. This brings a
total number of 309 employers and 451 employees consulted. It should further be noted that the
representation was both from individual employees and employers as well as those representing
organised business and labour.
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Unskilled Labour Sector ECC Report

As part of the information gathering process, the Department was invited by the Funeral Undertaking
Sector employers to come and make a presentation during their seminar which took place in Louis
Trichard (Makhado) wherein 100 employers attended the session of which they later submitted their
inputs in relation to the investigation.
1.3.3. PHASE THREE ECC PROCESS
During this phase the Department presented its findings and proposals to the ECC for its consideration.
The findings and proposals of the Department are discussed in the chapters dealing with the discussion
on conditions of employment and wages, followed by the ECCs recommendations.
1.3.4. PHASE

FOUR-

PUBLICATION

OF

THE

SECTORAL

DETERMINATION

AMENDMENT
This phase will see the publication of the sectoral determination or ministerial report, once approved by
the Minister, in the Government Gazette and subsequent awareness raising.
1.4.

STRUCTURE OF THE REPORT

The report consists of 4 chapters; Chapter 2 of this report outlines the sector profile and current status
of the South African Unskilled Labour sector. Chapter 3 is the discussion on application and scope of
the sectoral determination, wages and remunerations, demarcation, regulated hours of work, and other
conditions of employment, and this is followed by Chapter 4 containing the ECC evaluation criteria.

CHAPTER TWO
2.1.

DESCRIPTION OF THE TRADES

According to the Terms of reference, the research had to look at the following 24 trades in order to
provide information in relation to the current status of conditions of employment. Table 4 below reflects
a list of the trades that the research had to focus on.
Table 4: The 24 trades reviewed
Brewing or bottling beer/mineral water
Bunkering

Manufacturing of fertilizers
Manufacturing of glucose, dextrose, cornflower, starch

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Unskilled Labour Sector ECC Report

Cement Products
Construction plant hire services
Delivery services, including messenger services
Demolition of buildings
Excavating, levelling and pumping sand, soil, gravel
Garden services
Maintenance agricultural/industrial show grounds
Manufacturing of bone meal
Manufacturing of carpets
Manufacturing of food for domestic animals

Manufacture/mending hessian, jute or other bags


Manufacturing of tanning extract
Pest control services
Preparing sites for building or other purposes
Purification, grinding or packing of salt
Quarrying including stone crushing
Shipping agencies
Tending of racehorses
Waste paper recovery
Funeral undertaking

The table below provides a list and brief description of the 24 trades reviewed, the economic sector in
which they are located and the various occupations as per the Organising Framework for Occupations 1
(OFO).

Table 5: A brief description of the trades and the economic sectors in which they are located
A brief description of trade/s that fall within

Sector

the sector

Unskilled worker categories found within each


trade as per the Organising Framework for
Occupations (OFO)
Chemical Plant Worker

Performs routine tasks in a chemical


processing plant such as delivering

Chemicals

materials

Manufacturing of fertilizers organic


and

non-organic

materials

to

processing

areas,

dumping ingredients into hoppers,

are

operating machines to heat, cool and

combined to make fertilizers.

agitate chemical solutions, filling and


fasting covers on containers, and
attaching labels and information on

Food
beverages

&

Manufacture

of

bone

meal

the

products.
Mill Worker (Skill Level 1)

manufacture of bone meal is largely

Operates machines and performs routine

mechanised but the sorting of bones

tasks to mix, mill and treat grains and by-

remains the task of workers.

products to make flour, meal and stock

Manufacture of food for domestic animals

feed.

in this trade grinding and crushing is

Other Job Titles

done in order to make pet foods.

Animal Feed Mill Worker

Brewing and bottling beer / mineral water


involves working in factories to ensure
the brewing and bottling of beer and

Stock feed Miller


Lucerne Pellets Maker

The OFO is disaggregated into five (5) skill levels, with level 5 representing the highest skill level required for any occupation. For the purposes of this
study, skill level one (1) occupations is used to represent the unskilled workers throughout. Note that the list of occupations is only an extract from the OFO
and does not represent all the occupations surveyed.

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Unskilled Labour Sector ECC Report

Brewer/Brewery Worker (Skill Level 1)


mineral water.
Manufacture

Operates machines and performs routine


of

glucose,

dextrose,

cornflower, starch chemicals and other

Other Job Titles

blended and combined to manufacture the

Beer Brewer

products

of

glucose,

dextrose,

cornflower and starch.


Purification, grinding or packing of salt
salt is extracted from salt pans and the sea,

a)

Garden services the maintaining of


gardens in both residential and business
areas.
Maintenance

of

Bottling Attendant

Labelling Machine Operator


Garden Workers (Skill Level 1)
Assists in cultivating and maintaining
Farm Maintenance Worker (Skill Level 1)

agricultural/industrial show grounds the

Pruner (Skill Level 1)

employees

of

Pest or Weed Controller (Skill Level 1)

collectors

and

interest
general

are

garbage

maintenance

grounds.

Brewery Worker

gardens.

workers at agricultural or industrial show

Beer Production Worker

Jar or Bottle Filler

and then purified, ground and packaged.

Services

dispatch beer in bottles, cans and kegs.

agents (natural fibres, etc) are mixed,


food

tasks to make beer and package, store and

Applies

pest

or

weed

management

techniques to kill and control pests or

Pest control services involves the

weeds

in

domestic,

commercial

and

spraying and dissemination of pesticides to

industrial areas, roadsides, private and

eliminate insects and other pests.

public lands.

Tending of racehorses involves the

Other Job Titles

feeding, cleaning and caring for of

Fumigator

racehorses.

Knapsack Spray Operator

Funeral undertaking involves the

Chemical Sprayer/Sprayer Supervisor

grave-digging, cleaning, dressing of dead


Construction

bodies and the related activities.


Cement products moulding cement

Level 1)

into various products.

Construction

plant-hire

services

construction plants are hired out and the


tenants

hire

various

employees

to

operate the plant. In the operation of the


plant, various levels of employees are

Performs routine tasks in manufacturing


cement and concrete products such as
greasing and assembling concrete moulds,
holding reinforcing steel in position during
concrete pours, striping mould from dried
concrete products, and finishing products.

hired.

Cement and Concrete Plant Worker (Skill

Demolition of buildings this involves

Other Job Titles

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Unskilled Labour Sector ECC Report

Cement Finisher Worker


Concrete Finisher
Concrete Processing Worker
Earthmoving Worker (Skill Level 1)

the tearing down of existing buildings

Performs routine tasks in excavating earth,

and structures to make way for new

clearing and levelling sites, and digging

buildings.

irrigation channels.

Excavating, levelling and pumping sand,

Builders Worker (Skill Level 1)

soil, gravel involves the digging of

Performs routine tasks in erecting and

sand, soil and gravel for building and

repairing

structures

and

facilities

on

other construction purposes.

building and construction sites and in

Preparing sites for building or other

factories producing prefabricated building

purposes involves the clearing of

components.

building sites and the levelling of the

Other Job Titles

ground for the purpose of construction.

Bitumen Mixer Roading


Bricklayer's Assistant
Carpenter's Assistant
Demolition Contractor/Labourer
Joinery Worker
Tiller's Assistant
Fabric and Textile Factory Worker (Skill
Level 1)

Manufacture of carpets threading and


other weaving of materials is done by
hand.

Textiles

Performs routine tasks in a fabric and


textile factory such as cutting canvas,
upholstery and curtain fabrics, delivering
materials to machines, operating automatic

Manufacture/mending of hessian, jute or

machines using computerised patterns,

other bags involves the mending and

pressing partially completed and finished

threading of materials to create bags

garments, and inspecting and finishing

from Hessian, jute and other organic

completed garments.

materials.

Other Job Titles


Loom Threader
Textile Products Cutting Worker

Transport

Delivery
messenger

services,
services

including

involves the

delivery of goods utilising messengers.

Bunkering involves the loading of

Thread and Yarn Piecer


Delivery Driver (Vehicle) (Skill Level 1)
Drives a van or car to deliver goods.
Delivery Driver (Motorcycle) (Skill Level
1)

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Unskilled Labour Sector ECC Report

Drives a motorcycle or scooter to deliver


goods.
Leaflet or Newspaper Deliverer (Skill
Level 1)
Collects leaflets or newspapers from a
collection point and delivers them to homes

coal mainly onto ships.

Shipping agencies involves the


administration

of

goods

that

are

transported by ship.

in a specified area.
Waterside Worker (Skill Level 1)
Transfers cargo between ships and other
forms of transport or storage facilities.
Other Job Titles
Boat and Ship Cargo Loader
Docker Wharf
Longshoreman
Wharf Labourer
Recycling or Rubbish Collector (Skill

Manufacture of tanning extract

Level 1)

involves the combination of dyes and

Collects

other colouring agents to make extract to


Forestry

dye leathers and other materials.

Waste paper recovery involves the


collection of waste or recycling paper.

household,

commercial

and

industrial waste for recycling and disposal.


Paper and Pulp Mill Worker (General)
(Skill Level 1)
Other Job Titles
Pulp, Paper Making and Paper Products
Labourer
Mining Support Worker (Skill Level 1)
Performs routine tasks in mining and
mineral ore treating operations such as
assembling, operating and dismantling

Mining
minerals

&

Quarrying is the extraction of

mining equipment, taking ore, rock and

building stone or slate from an open

dust samples, and mixing ore treating

surface quarry.

chemicals and catalysts.


Other Job Titles
Gravel Worker
Pit Crew Support Worker
Quarry Hand/Worker
Sand Pit Worker

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Unskilled Labour Sector ECC Report

2.2.

Trades with protection

Out of the 24 trades the research revealed that most of these trades are covered by either a Bargaining
Council agreement, sectoral determination or collective agreements. The following trades have been
identified as having such coverage:
2.2.1.

Manufacture of glucose, dextrose, cornflower, starch or gelatine

The National Bargaining Council for the Chemical Industry has a jurisdiction in these trades and it is
bound to be extended to all the activities mentioned in this sector.
2.2.2. The manufacture of fertiliser, Purification, grinding or packing of salt (sodium chlorite), and
Waste glass recovery
Presently the manufacture of fertilizers is subject to the National Bargaining Council for the Chemical
Industry. The unskilled workers are generally not regarded as vulnerable due to the activities of four
effective trade unions actively engaged in the Chemical Industry.
2.2.3. Construction plant hire service, Demolition of buildings, Excavating, levelling and pumping
sand, soil and gravel, and preparing sites for building or other purposes.
Traditionally this trade has been regarded as a trade in its own right. However, employers and employees
in the Civil Engineering Sector who excavate, level, prepare the site for foundations etc are subject to
Sectoral Determination 2. In cases where an employers business is only to prepare a site, then it is
contended that such activity does not fall within the scope of the Civil Engineering Sector. The numbers
of unskilled workers are few in relation to plant operators who are regarded as semi-skilled or skilled
workers. Due to the wages prescribed in Sectoral Determination 2 they have a ripple effect on the hiring
of construction plant employees and unskilled workers are usually paid on a comparable level.
2.2.4. Carpets and Mending of hessian, other bags
In 2009, the collective agreement that was concluded in the National Textile Bargaining Council was
declared as binding on the parties which concluded the agreement as well as on the other employers and
employees in this Industry with effect from 2 February 2009. In this regard the textile industry was
defined as an enterprise in which the employers and the employees are associated, either in whole or in
part, for any activity relating to the processing or manufacture of fibres, filaments or yarns, natural or
man-made and the processing or manufacture of products obtained there from, including all activities
incidental thereto or consequent thereon. Due to bargaining council intervention many unskilled workers
in the trade have been replaced by semi-skilled workers in a highly mechanised industry.
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Unskilled Labour Sector ECC Report

2.2.5. Quarrying and Stonecrushing


This trade must be considered together with Determination 475 Stonecrushing Industry which by
definition includes the quarrying or minning of stone if carried on by employers who are engaged in the
crushing of stone. The sector is one of the sectors which is represented by the strongest labour trade
unions in the country. These trade unions have negotiation powers on issues like wages and conditions
of employment in the mining sector. With all the negotiation power and bargain for better salaries in the
industry there is no need for a further protection for this sector.
2.2.6. Nightsoil removal, Sale or delivery of sand, Shipping agencies, Delivery services, including
messenger services (except delivery by means of power driven vehicles.), and Bunkering
Where nightsoil removal is undertaken by municipalities then the South African Local Government
Bargaining Council has jurisdiction. When nightsoil is transported for reward then the National Road
Freight Industry Bargaining Council claims jurisdiction. Sectoral Determination 9 does not exclude the
sale or delivery of sand from its scope activities are subject to Determination 9 in view of the
cancellation of Wage Determination 467. The sale of sand includes certain basic unskilled operations
and for employers to pay the minimum wage laid down in Determination 9 for unskilled workers and
drivers of motor vehicles might cause undue hardship to certain employers.
Further, where sand is conveyed for reward by a cartage contractor such operations fall under the scope
of the National Bargaining Council for the Road Freight Industry as the latter claims jurisdiction over
such activities. Transport of sand by Transnet falls under the jurisdiction of the Transnet Bargaining
Council. Sand sold and delivered by hardware establishments are now considered to fall within the
scope of Sectoral Determination 9. If retained as an unskilled labour sector activity then the exclusion
found in clause 1(3)(a) of Sectoral Determination 9 could apply.
Unskilled workers employed in bunkering services by Portnet are subject to the Bargaining Council
Agreement for Transnet. The two trades examined in this project, namely bunkering and shipping
agencies, belong to one of the four transport chambers, (the maritime chamber of the transport sector).
Moreover, they represent this chamber only partially because this chamber comprises more than
bunkering and shipping agencies.

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Unskilled Labour Sector ECC Report

2.2.7. Waste paper recovery


Whilst the definition of Wood and Paper Sector covers pulp and paper which includes the
manufacture of pulp, paper, dissolving pulp and paper board including incidental activities in terms of
the Bargaining Council for the Wood and Pulp Industry is sufficiently wide to cover the actual collection
of waste paper. Individual persons who on their own for their benefit collect and sell waste paper are not
regarded as employees in this trade.
2.2.8. Maintenance of agricultural/industrial show grounds
This trade is not subject to any wage regulating measure and is usually conducted over a short period
whilst the show is in progress utilising casual labour. Where cleaning operations are conducted by
contract cleaning firms the provisions of Sectoral Determination 1, Contract Cleaning Sector applies.
The employees of store owners selling goods at a show are subject to Sectoral Determination 9. Where
local authorities collect garbage during shows such activity is governed by the South African Local
Government Bargaining Council. Where garbage is conveyed for reward, other than by a municipality
the National Bargaining Council for the Road Freight Industry claims jurisdiction.
2.3.

Trades without protection.

Out of the 24 trades which were focused on eighteen trades have protection, however the report will
focus on six trades without protection which include the following trades:
1.

Garden services

2.

Tending of racehorses

3.

Funeral undertaking

4.

Pest Control

5.

Manufacturing of bone meal

6.

Manufacturing of food for domestic animals.

CHAPTER THREE
In line with the discussions in Chapter two this chapter will focus on the six trades that are not covered
in terms of a bargaining council agreement, sectoral determination or collective agreement, furthermore
the chapter will also discuss the feasibility of establishing a sectoral determination for the unskilled
labour sector.

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Unskilled Labour Sector ECC Report

3.1.

Trades without protection

3.1.1.

Garden Services

When Wage Determination 467 was investigated in 1993 by the Wage Board this sector was found to
pay the lowest wages. Now that Determination 467 has been cancelled there is no wage regulating
measure applicable to this sector. The number of employers providing gardening services has increased
due to the publication of Sectoral Determination 7, Domestic Workers. Employers rendering gardening
services usually employ 4 to 5 unskilled workers per unit who do gardening in the place of domestic
employees who are subject to Sectoral Determination 7. Apart from that there are employers who
perform garden service for both household premises and industrial premises on a fixed term contract
basis.
3.1.1.1. Views of Employees
In terms of the questionnaire analysis the majority of employees support the establishment of a sectoral
determination. The main reason why garden service employees supported the need for sectoral
determination was because of the current level of wages being paid in the sector which ranges from R50
to R60 per day.
3.1.1.2. Views of Employers
The employers support the need for a sectoral determination in order to regulate the sector. They
however argued that a sectoral determination should not include all trades under one umbrella since each
trade operates differently. The employers further indicated that the Department should take into
consideration the current economic climate when pegging a minimum wage, business operational cost,
productivity of the worker.
The majority of employers were not in support of a single minimum wage in the unskilled labour sector
and asked the department to check the difference when in comes to the cost of living at each province
for an example, comparing Johannesburg and Bloemfontein.
3.1.1.3. Departmental recommendation.
The Department considered the research findings, views of various stakeholders and wish to concur with
the view that protection is indeed needed for the garden service trade. The Department however would
suggest a different approach in terms of dealing with this trade. The Department proposes that the trade
should be aligned to Contract Cleaning Sectoral Determination no 1 if it is performed on a contract
cleaning basis.
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Unskilled Labour Sector ECC Report

3.1.1.4. ECC Recommendation.


The ECC believes that the sector can be covered by Contract Cleaning Sectoral Determination no 1.
Considering the scope and application of the determination they believe that it is the suitable
determination for the garden service trade although the challenge it will be the issue of wages due to the
fact that the current wages in the contract cleaning are higher than what currently garden service trade
are paying. The ECC indicated that if wages are pegged at the current contract cleaning minimum wage
rate level it will negatively impact on the affordability. The ECC therefore proposes that an investigation
should be conducted for this sector to determine the feasibility of aligning this trade with the Contract
Cleaning Sectoral Determination.
3.1.2. Pest Control
Apart from one or two large registered companies the services of pest control is in the hands of small
one and two employee establishments. There is no bargaining council for this sector and in respect of
individual businesses there are few collective agreements in operation. The majority of workers in this
sector are skilled due to the nature of work (dealing with highly intoxicant chemicals). The sector
employs very few unskilled workers like those workers who spray the insects and its only seasonal so
they mainly use casual workers to complete the task.
3.1.2.1. Views of Employees
No inputs received from employees on this matter.
3.1.2.2. Views of Employers
The Employers indicated that they need a sectoral determination but further pointed that their workers
are trained as they deal with poisonous chemicals and those who can be regarded as unskilled worker in
their work place is cleaners, pest control assistant and handyman. They further stressed that pest control
services should be included, especially for the above mentioned employees. They proposed a single
wage in opposition of the provincial based minimum wage. They believe that the cost of equipment as
well as poisons, used to fumigate, is more or less the same even outside Rustenburg depending on the
quantity they buy and they also believe that the minimum wage should be the same as well.
3.1.2.3. Departmental Recommendations
The Department is of the view that pest control trade is a trade that employs mostly skilled employees,
and that means the sector employs very few of unskilled worker as indicated above and the unskilled
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Unskilled Labour Sector ECC Report

workers who are employed are only seasonal so they mainly use casual workers to complete the task.
Taking that into consideration the Department propose that if regulation of this trade is needed as called
for by employers the Department would suggest that they aligned to Chemical Industry Bargaining
Council.
3.1.2.4. ECC Recommendation
After considering all the different proposals and information provided, the ECC recommends that the
process should be establish to look at the viability of extending the scope of the Chemical Industry
Bargaining Council to cover this trade.
3.1.3. Tending of racehorses
There is no bargaining council for the tending of racehorses. This sector comprises mainly of unskilled
workers and although termed the sport of kings they are not always paid handsomely. In some cases the
only major financial benefits is if a horse wins or is placed in the top three a bonus is paid. In the
absence of a trade union specifically for this sector it is doubtful that any collective agreements exist. As
far as the breeding of racehorses on farms is concerned such activity falls within the scope of Sectoral
Determination 13, Farm Worker Sector. Unskilled workers, other than farm workers, who tender
racehorses, are regarded as farm workers. During the current investigation it was revealed that wages
paid in this sector for the emerging racehorse tenders are similar to those paid in Farm Workers sector,
whereas for bigger racehorse tenders pay a minimum of R1800, 00 per month with benefits like free
accommodation, provident fund and 13th cheque.
3.1.3.1. Views of Employees
During the site visit employees in this sector indicated that they dont think it is necessary to establish
sectoral determination for this trade as they are currently receiving most of the benefits as stipulated in
the Basic Conditions of Employment Act. They further indicated that they are currently receiving
benefits like provident fund and they are also getting accommodation free of charge. The employees
concur with the fact that their activities in the trades are familiar with those in farm workers. Most of the
employees stay in hostels which are provided by the employers and they are not restricted who to bring
along.

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Unskilled Labour Sector ECC Report

3.1.3.2. Views of Employers


Employers indicated that their activities are familiar with those activities performed in farm worker
sector. They also pointed out that the lowest earner in the sector is paid R1600 per week. Big employers
indicated that they have a concern about those small employers who are usually paying less in the trade.
3.1.3.3. Departmental Recommendations
The Department is of the view that the activities and the scope of this trade is equivalent to the farm
worker sectoral determination and therefore the Department propose that this trade should be align the
Farm Worker Sectoral determination 13, to address those employees who are employed by small
employers in this trade.
3.1.3.4. ECC Recommendations
ECC recommends that those working on farms breeding racehorses they are already covered by Farm
Worker Sectoral Determination however tending of racehorses should be left alone because the ECC do
not find areas of vulnerability.
3.1.4. Funeral Undertaking
Funeral Undertaking is a sector on its own. The sector employs a large number of unskilled workers in
both rural and urban areas. Since the cancellation of the wage determination no 470 the employers
complied with Basic Condition of employment Act which does not prescribe minimum wages.
Employees particularly those who are employed by the emerging funeral undertakers mostly in rural
areas are paying lower wages as compared to those in urban areas.
3.1.4.1. Views of Employees
The majority of the employees in this trade across the country they indicated that they wanted a sectoral
determination that will address specifically the issues in funeral undertaking due to the fact that their
trades are totally different in operation. SACCAWU stated that unskilled sector is very complex and the
Department needs to conduct a thorough investigation in relation to this sector.
They indicated that in most areas and industries the concept unskilled has different meanings. They
indicated that in many sectors if you have worked for a particular period, you are considered to be semiskilled. The union emphasized that the establishment of Sectoral Determination will have adverse
consequences if thorough investigation was not done. The employees in the sector further proposed that
the Department must establish the Sectoral Determination for funeral undertaking separately.
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Unskilled Labour Sector ECC Report

3.1.4.2. Views of Employers


There are diverse feelings in terms of this issue wherein some employers feel that they dont need a
sectoral determination and stated that they currently comply with Basic Conditions of Employment Act
which is working for them and while others feels that introduction of sectoral determination in the sector
will set a standard that will basically assist in issues of wages. Employers who are against the issue of
establishing a sectoral determination they further indicated that it will be difficult to establish a Sectoral
Determination for unskilled because of the different backgrounds of the Sector; for example, funeral
undertaking is completely different from other sectors.
The small business employers were concerned that a sectoral determination would set the minimum
wages high that will hamper the operating of the business. The employer currently remunerate the
employees R75 per day, the driver R 2800 and the lowest employee is paid R 1500 per month. Some
employers indicated that they cant afford to employ full time workers, specifically drivers, as they are
not busy during the course of the week but only busy during weekdays, therefore they employ casual
drivers who will only come when there is a funeral.
3.1.4.3. Departmental Recommendations
Given the situation and considering recommendations from both stakeholders in this trade, the
Department is of the view that this trade need to be investigated separately to establish the feasibility of
reviving wage determination 470 Funeral Undertaking if necessary. In addition to that Funeral
Undertaking stakeholders concur with the fact that this trade it is very different as compared to other
trades as employees in many occasions have to work extreme hour in order to complete their
obligations.
3.1.4.4. ECC Recommendation
With respect to the Funeral Undertaking trade, the ECC recommends that there should be a separate
investigation for the sector investigating wages and conditions of employment.
3.1.5. Manufacturing of bone meal
The manufacture of bone meal in itself is largely mechanised but the sorting of bones remains the task of
the unskilled worker. This trade is not subject to any wage regulating measure since Determination 467
was cancelled. The number of unskilled workers in this trade is considered to be small and conducted in

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Unskilled Labour Sector ECC Report

very few areas. The unskilled workers in this trade are protected by Basic Conditions of Employment
Act which does not regulate wage.
3.1.5.1. Views of Employees
No inputs received from employees on this matter.
3.1.5.2. Views of Employers
No inputs received from employers on this matter.
3.1.5.3. Departmental Recommendation
The Department is of the view that this trade needs a further investigation to determine whether it is
feasible to align it to either bargaining council, or sectoral determination or collective agreement.
3.1.5.4. ECC Recommendation
The ECC believes that manufacturing of bone meal and manufacturing of food for domestic animals is
the same thing and would recommends that they should be checked and if viable group them together.
3.1.6. Manufacturing of food for domestic animals
This trade has been limited by the exclusion of employers whose undertaking is in conjunction with the
grinding, gristing or crushing of cereals or the production of any raw cereal products by grinding,
gristing or crushing. There appears to be no compelling reason for the said exclusions. However, the
main reason for the exclusion appears to be that some employees are subject to the Bargaining Council
agreement for the Grain Co-operative Trade. This trade does employ a small labour corps which is
considered to be unskilled. The unskilled workers in this trade most of them are covered by the
Bargaining Council Agreement. Employers who do not form a part of bargaining council have indicated
that they comply with the BCEA in terms of conditions of employment and in terms of wages they pay
R50, 00. Through the extension of the bargaining council agreement to these employees the elements of
vulnerability could be alleviated.
3.1.6.1. Views of Employees
There was no proposal from the employee received from this trade.
3.1.6.2. Views of Employers
Employers in this trade indicated that there is a need for a sectoral determination that will regulate
wages and conditions in the sector. They requested that general workers must be covered as the use or
24
Unskilled Labour Sector ECC Report

employ casual staff for packaging food in their containers. They also indicated that this workers start by
packaging food including loading in the trucks then afterwards they clean their work stations as well as
the entire building. Employers also indicated that its no feasible for them to have each employee
delegated to do a specific task e.g. because they package food then the floor and/ or work stations
becomes dirty and they cant clean as they go instead they have to do the same work first then after they
all clean. Employers suggested a provincial based minimum wage and further indicated that it should be
demarcated or categorized into Area A and Area B.
3.1.6.3. Departmental Recommendations
Considering the fact that there is an existing bargaining council for Grain Co-operative Trade, the
Department is of the view that through the extension of the bargaining council agreement to these
employees the elements of vulnerability could be alleviated.
3.1.6.4. ECC Recommendations
The ECC recommends that the two trades manufacturing of bone meal and manufacturing of food for
domestic animals should be aligned to the bargaining council for Grain Co-operative.
3.2.

The feasibility of having a sectoral determination.

The study found that most of conditions of employment in the investigated trades are aligned to the
Basic Conditions of Employment Act. The majority of employers are complying with such conditions of
employment as ordinary hours of work, meal intervals, Sunday work and contributions to UIF. The
majority of employees reported not getting any medical benefits, bonuses or 13 th cheques and any
pension or provident funds.
In most of the trades, written contracts are widely used. The research further revealed that most
employees work 40 to 45 hours which is in line with the maximum ordinary hours prescribed in BCEA
regulations.
In terms of wages the research indicated that 51% of unskilled workers in 24 trades earned more than
R2,000 per month. The standardised analysis shows that in most trades, more than 50% of unskilled
workers reported that their salaries meet their basic needs. The research concludes that while a small
majority of employees in the trades under review earn more than R2, 000 per month, most of them have
large households (more than five members), do not have medical benefits and do not earn bonuses or
13th cheques.
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Unskilled Labour Sector ECC Report

3.2.1. Departmental Recommendations


The Department considered the research findings, views of various stakeholders and the Department is
of the view that protection is indeed needed for the trades without protection, however there should be
careful to what extend are this trades exploited, taking it consideration that currently most of this trades
comply with BCEA. The Department would like to point out that for the fact that this investigation deals
with more than one trade with different conditions of employment it does pose a challenge in terms of
establishing a uniform legislation which will cater this six different trades.
The Department is mindful of the difference existing in conditions of employment in this trades and the
fact that the issue of wages depends on the affordability in those trades. With that note the Department
would like to propose that for those trades which have been identified to be without protection should be
either looking at the possibility of aligning them with the applicable bargaining council or establish a
separate investigation for this specific trades. In essence the Department proposes that the sectoral
determination for unskilled labour should not be established as it will confuse that labour market.
3.2.1. ECC Recommendations
The ECC supports the view put forward in the departmental report.

CHAPTER FOUR
EVALUATION IN TERMS OF ECC CRITERIA
The alleviation of poverty
The introduction of social protection measures in the form of social grants has played an important role
in bringing much sought-after relief to people living in poverty, however, accelerated economic growth
is still a necessary ingredient to assist in the battle against poverty in conjunction with strengthened
labour market policies and an improved education system.

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Unskilled Labour Sector ECC Report

South African business leaders have always argued that the need of unskilled employees to have the
alleviation of poverty addressed should be considered against the backdrop of the need for more
relaxation of current labour laws. However, Barnard (2009) has found that overall, employment
protection legislation (EPL) in South Africa appears to be relatively flexible, with respect both to the
average of OECD countries and to those other non-OECD member economies (Brazil, Chile, China, and
India), and that South Africas labour legislation seems to live up to its creators aim of providing for
regulated flexibility. He does point out that it is true that ease of firing is one area where South Africa
shows up as being less flexible, but that even in this case, South Africa scores below the average for
OECD economies in this regard.
This finding suggests that the perception of business that the South African labour market is
overburdened by regulation is distorted and that compared to developed and developing countries, South
Africas employment protection legislation is relatively flexible.
The majority (71.4%) of elementary workers in the different sectors studied indicated that their salaries
do not cover their basic needs. This 71.4% spans both the group that earned more than R2,000 per month
(51%) and the group that earns under this amount (49%). This suggests that unskilled workers feel that
they are living in poverty. That even the group earning over R2,000 monthly felt that their salaries do
not cover their basic needs emphasises the deprivation experienced by the group earning less.
The report argues that this must be balanced with what the poverty line in South Africa is. If the lower
bound poverty line, which provides for essential food and non-food consumption and amounts to R322
per capita per month in 2000 prices is used, then only 32.4% of the study sample can be said to be living
below the poverty line. This corroborates the finding by Armstrong et al (2008) that the consumption
levels of 33.2% of all households were below the "lower-bound" poverty line.
Armstrong et al used two absolute poverty lines that they indicate were proposed by Statistics South
Africa. The lower bound poverty line, which provides for essential food and non-food consumption,
amounts to R322 per capita per month in 2000 prices. The upper bound poverty line, which includes
an additional R271 for non-essential non-food items, amounts to R593 per capita per month.
They found that the consumption levels of 33.2% of all households were below the "lower-bound"
poverty line, while 53.3% of households consumed less than the "upper-bound" poverty line. Poorer
households were bigger, on average, than richer ones; hence, there was even more poverty when
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Unskilled Labour Sector ECC Report

measured in terms of the proportion of individuals rather than the proportion of households who were
poor. The proportions of the population that consumed less than the "lower-bound" and the "upperbound" poverty lines were 47.1% and 67.6% respectively.
The income earned from employment will be important, particularly since the aim is to reduce
unemployment and poverty. Strengthening broad-based economic participation can be the best way to
ensure a more equal distribution of income. This requires, not only low rates of unemployment, but also
rising income earned from work. In other words, some path is needed that would create jobs and also
enable real wage growth in a way that is supportive of long run economic expansion.
In South Africa, earnings from employment and self-employment are low relative to the cost of living.
The Labour Force Survey shows that about 65% of all workers earned less than R2, 500 per month, and
39% earned less than R1, 000 per month. Low earners are not only found in the informal sector: just
over half of formal sector workers earned less than R 2,500 per month. Low earners in the formal sector
are not only found in low level jobs: about two-thirds of craft workers and plant and machinery
operators earned R2, 500 per month or less. What does this mean for poverty? There is no official
poverty line, but the National Treasury recently released a discussion paper suggesting that it might
initially be set at the equivalent of R 430 per person per month in 2006 Rand. About 50% of the
population would fall below this level. What if the unemployment problem were virtually resolved and
fell from about 25% to 13% to 6.5%? Most of us assume that this would dig deeply into the poverty
problem.

Cost of living
Absolute earnings for African workers are still quite low relative to living costs, with 28.5% of workers
earning less than R1,000 per month in 2004, and 64.7% earning less than R2,500 per month (Altman,
2006). Great inequality persists. As discussed earlier in this report, wage differentials by race continue to
be significant and it has been shown that there is no room to reduce real wages, all things being equal.
As discussed elsewhere in this report, the option of increasing the social wage to reduce the pressure on
private wages for firms and households through a widened social security net has already been exercised
to arguably the point where further widening could be unsustainable in the long run.

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Unskilled Labour Sector ECC Report

In these circumstances, other forms of ensuring that the consumption levels of low paid workers are at
least maintained or improved need to be examined taking into account their potential impact on
inflation.
Inflation in terms of household expenditures particularly affects the poor. Those who are worst affected
by rising inflation are the poor because they spend the bulk of their household income on basic
necessities such as food, transport, education and medical care (NALEDI, 2008).
The NALEDI report further observes that on average, low income groups experience higher rates of
inflation in comparison with those in the middle- and high-income brackets. Importantly, people in the
very low- to low-income groups spend the bulk of their household income on necessities, such as food,
transport, medical care and education among others. So when compared with those in the middle- and
higher-income groups, the higher rates of food inflation and other basic necessities affect them
disproportionately.
With the majority of workers earning less than R2,500 per month, increasing inflation and very high
food prices, it is safe to suggest that between 2006 and 2007, wages have not kept pace with inflation.
Consequently, the purchasing power of the majority of workers has continuously been eroded.
Other information that could be relevant to the ECC
A significant proportion (65%) companies indicated that were moving towards a 50-50 labour-capitalintensive split in their mode of production, suggesting that companies are generally not looking towards
major investments in transforming their modes of production to more capital-intensive and automated
modes. This could mean that the number of current jobs is not generally or imminently in danger due to
a shift in the mode of production, however, it could have an impact on the availability of jobs and wages
earned particularly by unskilled workers in that these workers rely on labour-intensive jobs that do not
require much skills and if the mode of production required more skilled workers, these workers would
be negatively affected.
The findings revealed that in small and medium-sized organisations, wage agreements were primarily
made on a one-on-one basis with the majority of employers surveyed reporting that they recruited a
large number of unskilled workers through walk-ins and informal referrals. In large organisations, these
agreements were equally negotiated at industry-level and on a one-one-one basis.

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Unskilled Labour Sector ECC Report

The study also found that although sectoral and wage determinations for unskilled labour were cancelled
in 2007, certain sectors continue to have Bargaining Councils which meet annually to negotiate wages,
conditions of employment and other related issues. A number of substantive wage agreements were
reached within these sectors and industries in 2009 and a summary of agreements that are relevant to the
trades under review in this study is provided below.
Fast Moving Consumer Goods sector
The following trades were included:
Manufacture of glucose, dextrose, cornflower, starch.
Brewing or bottling beer/mineral water.
Industrial Chemicals Sector
The following trades were included:
Manufacturing of fertilizers
Civil Engineering Industry
The following trades were included:
Construction plant hire services
Demolition of buildings
Excavating, levelling and pumping sand, soil and gravel
Preparing sites for building or other purposes
Textiles
This sector had binding agreements to 31 December 2009, subsequent to which only the clothing
manufacturers reached an agreement binding between 2009 and 2010. A textiles sector agreement was
reached in 2009 binding until 31 August 2010 but it only covered clothing and excluded the textile
trades under review in this study, which now renders these trades vulnerable.
However, there are still a significant number of trades and sectors that have not negotiated any
agreements which, according to this study, can be classified as being vulnerable and could need a
determination to ease their vulnerability. These trades and sectors are listed below:
Services
Garden services
Maintenance of agricultural/industrial show grounds
Pest control services
Tending of racehorses
Food and beverages
Manufacturing of bone meal
Manufacturing of food for domestic animals
Textiles
Manufacturing of carpets
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Unskilled Labour Sector ECC Report

Manufacturing/mending hessian, jute or other bags


Transport
Delivery services, including messenger services
Shipping agencies
Mining and minerals
Quarrying including stone crushing
Forestry
Waste paper recovery
Conclusions
In terms of the three criteria researched in this study, i.e. labour force composition, wages and conditions
of employment in the unskilled labour sector, this study provides insight into the unskilled labour market
and provides a baseline of the 24 trades that was previously unavailable. This was achieved through
using LFS data and information gleaned through various sector Skills Plans for the affected sectors.
In terms of the other two criteria, the primary research that was conducted provided significant
information on wages and employment conditions in the unskilled labour sector. Regarding conditions
of employment, the findings suggest that there is a relatively high level of compliance by employers
with some key aspects of the Act.
With regard to wages, the research concludes that while a small majority of employees in the trades
under review earn more than R2,000 per month, most of them have large households (more than five
members), do not have medical benefits and do not earn bonuses or 13 th cheques. It should be taken into
that the borderline nature of this majority indicates that almost half of unskilled workers therefore earn
less than R2,000 with which to survive.
The study has also shown that since the cancellation of the unskilled labour sectoral and wage
determinations in 2007, a significant proportion of the trades under review has been left vulnerable
which was not helped by the world-wide recession that also affected a large part of the South African
economy.
International experience has also shown that maintaining or increasing wages at the lower levels of the
pay scale, particularly in recessionary periods, may counteract weakening aggregate demand and boost
prospects for recovery and that allowing a decline in the purchasing power of lower-end wages could
lead to a rise in poverty and an added downward twist to the recession.

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Unskilled Labour Sector ECC Report

The research suggests that the ECC considers a wage determination for unskilled workers across the
trades identified as vulnerable by this study and taking into account that these workers do not have any
other financial benefits other than their salaries.

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Unskilled Labour Sector ECC Report