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The Global Labour University (GLU) The Global Labour University (GLU) www.global-labour-university.org is a international network of universities, trade unions, research institutes, think tanks and the International Labour Organisation that develops and implements university post graduate programmes on labour and globalization for trade unionists and other labour experts; undertakes joint research and organizes international discussion fora on global labour issues; publishes textbooks, research and discussion papers on labour and globalization issues. Editorial Board Sharit K. Bhowmik (Tata Institute of Social Sciences, India) Hansjörg Herr (Berlin School of Economics and Law, Germany) Frank Hoffer (International Labour Organisation) Seeraj Mohamed (University of the Witwatersrand, South Africa) Helen Schwenken (University of Kassel, Germany) Contact Address Hochschule für Wirtschaft und Recht Berlin IMB - Prof. Hansjörg Herr Badensche Str. 52 D-10825 Berlin E-mail: [email protected] www.global-labour-university.org Layout: Harald Kröck Towards new Collective Bargaining, Wage and Social Protection Strategies in South Africa - Learning from the Brazilian Experience Neil Coleman Always bear in mind that the people are not fighting for ideas, for the things in anyone's head. They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children. (Amilcar Cabral) This Working Paper was written as part of the GLU project "Combating Inequality" which is financed by the Hans-Böckler-Foundation in Germany. GLU | Collective Bargaining, Wage and Social Protection in S.A. Copyright © International Labour Organization 2013 First published 2013 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: [email protected]. The International Labour Office welcomes such applications. Libraries, institutions and other users registered with reproduction rights organizations may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. ILO Cataloguing in Publication Data Coleman, Neil Towards new collective bargaining, wage and social protection strategies in South Africa : learning from the Brazilian experience / Neil Coleman; International Labour Office ; Global Labour University..- Geneva: ILO, 2013 Global Labour University working paper,No. 17; ISSN 1866-0541 ; 2194-7465 (web pdf) ; International Labour Office; Global Labour University collective bargaining / wages / minimum wage / social protection / role of Brazil / South Africa R 13.06.5 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications and electronic products can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by email: [email protected] Visit our web site: www.ilo.org/publns Printed in Switzerland II GLU | Collective Bargaining, Wage and Social Protection in S.A. TABLE OF CONTENTS 1. SUMMARY OF PROPOSALS ............................................................................ 1 2. CHALLENGES IN TRANSFORMING THE SOUTH AFRICAN ..................... LABOUR MARKET ............................................................................................... 2 3. THE ‘BRAZILIAN MIRACLE' AND ABOUR MARKET .................................... TRANSFORMATION ........................................................................................ 11 4. SOUTH AFRICAN WAGE STRATEGIES AND THE ........................................ MINIMUM WAGE ............................................................................................. 22 5. SOCIAL PROTECTION ..................................................................................... 55 6. COLLECTIVE BARGAINING: THE NEED FOR A NEW ................................. ARCHITECTURE ................................................................................................ 63 7. CONCLUSIONS ................................................................................................. 85 REFERENCES ..................................................................................................................... 87 APPENDIX 1: MINIMUM WAGE SETTING IN BRAZIL ............................................ 92 APPENDIX 2: MINIMUM WAGES AND EMPLOYMENT IN BRAZIL ................... 93 III GLU | Collective Bargaining, Wage and Social Protection in S.A. LIST OF TABLES Table 1: Monthly Wage Income of Unskilled, Semi-skilled and ................ Skilled Workers in Bargaining Council Agreements .................... (excluding the public sector) in South Africa, 2011 .................... 4 Table 2: Working poor indicators, world and regions ................................. (US$ 2 a day) .......................................................................................... 19 Table 3: Two institutions and their potential effects ................................... on low-wage work .............................................................................. 24 Table 4: Summary of statutory minimum wage policies ........................ 27 Table 5: Average monthly wage for workers .................................................. in elementary occupations, 2010 ................................................... 29 Table 6: Proportion of households by poverty status ................................. and sectoral determination of household in 2001 and .............. 2007 in per cent ................................................................................... 32 Table 7: Estimates of average monthly earnings, including ...................... bonuses and overtime payments, at current prices, by .............. industry within 95% confidence limits in rand ............................... in 2011 ..................................................................................................... 35 Table 8: Changes in working conditions by sectoral .................................... determination, 2001 and 2007 ....................................................... 37 Table 9: Mean hours worked per week by sectoral ...................................... determination, 2001 and 2007 ....................................................... 38 Table 10: South African household labour market ......................................... attachment and access to grants of the .......................................... unemployed, in percentage ............................................................ 56 Table 11: Levels of bargaining in South Africa under .................................... the Labour Relations Act ................................................................... 71 Table 12: Bargaining Councils and employee coverage by ......................... sector, 2004 ........................................................................................... 73 Table 13: Bargaining Councils and employee coverage ........................... 75 LIST OF FIGURES Figure 1: Minimum Wage Levels in Sectoral Determinations ..................... in Rand per Month, 2011 ...................................................................... 3 Figure 2: GDP per capita in BCIS countries, 1990-2008, ................................ in PPPs constant 2005 international USD .................................... 12 Figure 3: Collective bargaining outcomes 1996-2011 .............................. 16 Figure 4: Ratio of minimum wages to average wages in per cent ........ 33 Figure 5: Public social expenditure in selected OECD ................................... and BCIS countries, second half of 2000s ........................................ (as a percentage of GDP) .................................................................. 58 Figure 6: Extreme poverty has decreased but is still ..................................... high in BCIS countries, percentage of population ................... 59 IV GLU | Collective Bargaining, Wage and Social Protection in S.A. 1 1. SUMMARY OF PROPOSALS The Congress of South African Trade Unions COSATU has recognised that the South African labour movement is facing a major challenge in the functioning of labour market institutions inter alia because:
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