Round two of textile wage wars

2013-04-21 14:00

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Clothing firms back in court as union makes urgent application to suspend new wage pact

Clothing factories that pay subminimum wages are headed back to court for a second stab at the sector’s wage regime, which they say will otherwise destroy them.

Their growing employers’ group, the United Clothing and Textile Association (Ucta), is this week making an urgent application to suspend the sector’s new wage agreement, which is due to kick in on Tuesday.

At the same time, Ucta risks a dramatic escalation of hostilities with the Southern African Clothing and Textile Workers’ Union (Sactwu) and the National Bargaining Council by starting a campaign to convert their factories into cooperatives.

This would put thousands of workers beyond the reach of labour law and sectoral wage pacts by transforming them into owners working for shares in the profit.

Ucta’s new urgent application follows their first modest court victory in March this year against Labour Minister Mildred Oliphant and the National Bargaining Council.

That case was financially supported by the Millennium Trust, a philanthropy of Capitec chairperson Michiel le Roux, had heavy-hitting academics as experts, two years of top-notch legal preparations and was also loudly endorsed by the liberal think-tank Centre for Development and Enterprise.

All the most substantive arguments were, however, passed over by ­KwaZulu-Natal High Court Judge Piet Koen, who decided the case on a relatively small technicality.

Oliphant extended the clothing sector’s 2010 agreement as though the employer parties to the National Bargaining Council represented 50% of the sector when they don’t.

Ucta is recycling most of these arguments for the new case, including that the minister is legally obliged to assess the damage done by minimum wages before extending agreements.

This time Ucta is going it alone, although the Millenium Trust’s spokesperson, Le Roux van der Westhuizen, says it is still keeping an eye on developments.

According to Ucta CEO Leon Deetlefs, the group is also exploring an application to have the National Bargaining Council deregistered “based on its unrepresentativeness”, although that is still very preliminary.

The urgent application was being drafted on Friday and will “hopefully” be in court this week. Ucta now has 121 paid-up members who together employ a staggering 18?000 workers.

On average, Ucta factories employ 60 to 80 workers each. Ucta could probably already make a good case for joining the National Bargaining Council as an important member, but Deetlefs rejects the idea.

“We do not want to be on the council. In its current form, it can only lead to more factory closures.”

Ucta is already piloting its cooperative-conversion project with five factories, including two in Chatsworth, says chief executive Deetlefs.

The idea is regarded with trepidation by employers and employees, he admits.

In their long battle with Sactwu and the National Bargaining Council, the non-compliant factories have often argued for piece work rates for employees, but Ucta’s thinking seems to have shifted.

“Co-ops are the route we’re looking at,” says Deetlefs.

Deetlefs presents co-opting as a major empowerment drive creating a profusion of black-owned clothing factories that Ucta would support.

Ideally, workers will get at least 50%, but up to 100%, of their factory at a “nominal price”, says Deetlefs.

Deetlefs crossed the battle line to Ucta after having been the National Bargaining Council’s compliance officer for years – in charge of the controversial closure of factories that paid less than prescribed wages.

Ironically, he may soon be at the receiving end of the closures.

How round one ended

The first case only had the effect of rescinding the 2010 wage agreement, which had already expired by August last year.

That rendered many of the National Bargaining Council’s writs of execution (the mechanism for closing non-compliant factories) void and Ucta is pursuing refunds allegedly amounting to a few million rands for writs that had been executed.

Sactwu is appealing against even that “hollow victory” as it sets a legal precedent that may be used against other standing wage agreements in the country, says general secretary Andre Kriel.

The new wage agreement Ucta is now trying to suspend and scrap increases wages, but also makes it easier to close non-compliant factories. It gives Sactwu the “unfettered” right to strike and the National Bargaining Council the “unfettered authority” to serve writs of execution.

This means less red tape before acting against non-compliant factories.

“Contrary to popular belief, the bargaining council in general acted with restraint as it wanted to encourage compliance rather than just enforce it,” says Sactwu’s Kriel.

“Attitudes have now hardened, as our goodwill has been treated with the utmost disrespect,” Kriel told City Press, adding that the agreement was actually concluded last year “when Sactwu was very sympathetic to help non-compliant employers become compliant”.

Since then, the first court case showed “which employers really want help and which ones simply want to continue to treat workers like dirt”, he said in reply to emailed questions.

The National Bargaining Council routinely negotiates overlapping wage agreements in anticipation of exactly the kind of legal challenges now coming its way.

It ensures that even if one agreement is struck down, there is one to fall back on.

The council is starting a new wage negotiation this week, even though the minister extended last week’s agreement until 2016.

Sactwu has “issued a directive for a hardened compliance drive” and the next negotiations will “deal with this changed environment”, says Kriel.

Johann Baard, executive director of Sactwu’s counterpart in the National Bargaining Council, the Apparel Manufacturers of SA, says wage agreements are incrementally shifting towards a new dispensation.

“We are moving out of the ideological framework,” Baard said.

“Five years ago, unions would have said ‘over our dead bodies’ to these concessions.”

The new wage deal allows new workers to be paid 80% of the legal wage permanently.

The deal also offers to enrol much of the non-compliant part of the sector in a kind of universal debt restructuring.

This is to be done by giving them 18 months to pay off wages in arrears to keep them from being closed.

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