Written evidence submitted by Cofesa (Confederation
of Employers of Southern Africa)
I only received notice of your inquiry this
morning. Please accept my memorandum.
Relations with the UK is of the utmost importance
for us and your inquiry is necessary and highly appreciated.
Cofesa was registered at the Department of Labour
as Confederation of Employers of Southern Africa on 6 November
1990. Presently we assist our 4,000 employer members with all
aspects of labour relations- employment contracts, disciplinary
hearings, conciliations, arbitrations, court cases, union negotiations
etc. (www.cofesa.co.za)
In 1990 South Africa had 10.8 million job opportunities.
Today only 4.6 million jobs are left while more than 300,000 people
enter the job market every year. This is a result of rigid labour
legislation. The result is 60% unemployment, rampant crime levels
and socio economic problems including HIV Aids.
We actively support the African Economic Renaissance
vision of president Thabo Mbeki. To realise this vision we need
to create more entrepreneurs. We did extensive research on the
establishment of entrepreneurs and actively promote entrepreneurs.
We presented papers at various conferences on this subject in
(Stockholm, Malaysia, Dublin and Grenoble).
Research indicated that their production is
between 60% and 300% better than that of employees.
At the recent session of the ILO, South African
trade union representatives launched a campaign to extend the
definition of "employee" to include dependent contractors.
This will seriously affect the establishment
of entrepreneurs, micro enterprises and incubators.
Our Minister of Labour, Mdladlana and trade
union spokesmen launched this campaign.
If this campaign succeeds it will stop development
in many Third World countries and will harm the African Economic
Renaissance.
It will be appreciated if you will take this
up at the international forums to make the development of entrepreneurs
a priority.
Malaysia appointed a minister for entrepreneurship.
We need your support for the establishment of a minister of entrepreneurship
in the RSA and in every state in Africa.
Our countrywide network of advisors established
more than 1.5 million micro enterprises for entrepreneurs in support
of government policy of black empowerment and our policy to establish
micro enterprises.
For many years the contract between parties
determined the nature of the relationship between them.
In 2002 our Parliament (on initiative of the
Department of Labour) added clause 200A to the Labour Relations
Act. The amendment is in the form of a presumption to regard contractors
as "employees".
"200A Presumption as to who is employee:
(1) Until the contrary is proved, a person
who works for, or renders services to, any other person is presumed,
regardless of the form of the contract, to be an employee, if
any one or more of the following factors are present:
(c)
in the case of a person who works for an organisation,
the person forms part of that organisation;
(d)
the person has worked for that other person for an
average of at least 40 hours per month over the last three months;
(e)
the person is economically dependent on the other
person for whom he or she works or renders services;
(2) Subsection (1) does not apply to any
person who earns in excess of the amount determined by the Minister.
(3) If a proposed or existing work arrangement
involves persons who earn amounts equal to or below the amounts
determined by the Minister in terms of section 6(3) of the Basic
Conditions of Employment Act, any of the contracting parties may
approach the Commission for an advisory award on whether the person
involved in the arrangement is an employee.
NEDLAC (a national forum of government, labour
and employers) must prepare and issue a Code of Good Practice
that sets out guidelines for determining whether persons, including
those who earn in excess of the amount determined in subsection
(2) are employees".
Cofesa is not represented on NEDLAC and was
not invited to the ILO.
Our legislations must be interpreted 1(b) to
give effect to obligations incurred by the Republic as a member
state of the International Labour Organisation and in terms of
our Constitution section 27 which is the Chapter on Fundamental
Rights in the Constitution entrenches the following rights:
(2)
(2) Workers shall have the right to form and
join trade unions, and employers shall have the right to form
and join employers' organisations.
(5)
Employers' recourse to the lock-out for the purpose
of collective bargaining shall not be impaired . . .
Section 3 of the LRA provides for the interpretation
of this Act Section c: in compliance with the public international
law obligations of the Republic. (including the Convention on
Freedom of Association).
This presumption violates a number of our constitutional
rights:
1.
Equality—people are regarded as employees and
not as contractors/entrepreneurs and therefore miss the opportunity
to be developed as entrepreneurs who are equal in status. Employees
are regarded as subordinate persons who are under supervision.
2.
Freedom of association: Our freedom of association
is curtailed since we cannot recruit these presumed employees
as members.
4.
Freedom of trade: Section 22 provides: "Every
citizen has the right to choose their trade, occupation or profession
freely. The practice of a trade, occupation or profession may
be regulated by law". In terms of the presumption, the contractors
are now presumed as employees without their choice.
5.
Persons contracting with these presumed employees
are unfairly presumed "employers". They are suddenly
liable to pay minimum wages, (catch up with arrear payments),
leave, sick leave, family responsibility leave, maternity leave,
etc. Compliance orders and court orders may be issued against
them.
6.
This presumption discriminates against new entrants,
unskilled, untrained, inexperienced people who are excluded from
the labour market and excluded from doing contract work.
7.
The presumption jeopardises our governments' policy
and efforts to empower the disadvantaged, to promote micro enterprises,
entrepreneurs and to create opportunities. Our Department of Trade
and Industry and of Finance have projects in place to promote
micro enterprises.
It is important that your government support
Mr Trevor Manual, Minister of Finance, and Mr Alec Ervin, Minister
of Trade and Industry to stop this campaign against contractors
and entrepreneurs.
With your support Mr Manuel will be able to
convince the Minister of Labour to discontinue the campaign.
STRATEGY
We are doing our utmost to protect these entrepreneurs
by helping them with the contracts and with the implementation
of the concept of entrepreneurs.
Some bargaining councils persecute these entrepreneurs.
We need a strong independent lobby to curb these campaigns and
to focus on the establishment of entrepreneurs.
PS: The ILO debate is to be seen on www.ilo.org/public/english/standards/relm/ilc91/records.htm
Our Australian friends summarised this issue
on their website www.contractworld.com.au
Hein van der Walt
Cofesa (Confederation of Employers of Southern Africa)
October 2003
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