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Minimum wage factory shutdowns head for talks

By SLINDILE KHANYILE

Efforts to resolve the stand-off over the payment of the minimum wage between the National Bargaining Council for the Clothing Manufacturing Industry and factory owners will begin on Monday when all the parties meet with national government representatives.

The meeting was arranged by the Free State provincial government as it is one of the two provinces that have been affected. The parties will meet the deputy director-generals of the departments of labour, trade and industry and economic development.

All those involved declined to spell out what solution they hoped for, saying that it was a complex matter because, while preserving jobs was important, abiding by the law was just as critical to all concerned.

"We want people to comply with the laws of government but we are also worried about job losses. I hear that there are 15 000 people employed by the factories and they apparently used to employ more.

"But we want to see how we can assist," said Tebogo Lioma, the deputy director-general of the Free State Department of Economic Development.

Lioma will facilitate tomorrow's meeting. There are 1 034 companies registered with the bargaining council, of these, 558 are paying the minimum wage. The bargaining council has obtained judgements against 386 non-complying factories, affecting 15 000 jobs.

Each of the non-complying companies owes between R637 000 and R2.6 million in underpaid wages to workers for the period between September 2008 and September 2009. At the minimum, factory owners owe workers R150m.

Leon Deetlefs, the bargaining council's national compliance manager, said this was a delicate situation and did not think there would be a quick solution. Deetlefs said the clothing industry was in a precarious state as it also faced the possibility of losing customers.

However, he said the bargaining council had no intention of backing down on enforcing the law. The council had placed a 30-day moratorium on implementing the judgements to give the government's intervention a chance.

The impasse began two weeks ago when the bargaining council shut non-complying factories, the majority of which are owned by Taiwanese and Chinese nationals, because they did not pay workers the minimum wage of R324 a week.

 There are 16 factories in both provinces that were closed by the bargaining council before an agreement was reached on the 30-day reprieve.

At Newcastle in northern KwaZulu-Natal, where two factories were closed, there was a total shutdown last Monday - a decision made by the 85 employers in protest of the bargaining council's decision.

The Newcastle Chinese Chamber of Commerce has argued that the bargaining council had not shown its members how it reached its calculations and that it was using outdated records. It said the lowest paid worker earned R250 a week, while the highest took home in the region of R500.

Alex Liu, the chairman of the Newcastle Chinese Chamber of Commerce, said those members who were not paying the minimum wage could not afford it because they also did not make much from their customers, who included the likes of Mr Price, Edgars and Jet.

Liu said between 50 percent and 60 percent of turnover went to wages. The minimum wage is published by the minister of labour following negotiations between workers and employers in the sector. "We were never consulted in the negotiations (to determine a minimum wage)," Liu said last week.

Thembinkosi Mkhaliphi, the chief director for the bargaining council in the Department of Labour, said employers had the option of applying for exemption if they could not pay the minimum wage.

If their request is declined, they can go to an independent arbitrator.

"It is not clear if these employers have used the remedies in the law," said Mkhaliphi.

Deetlefs said only four of the 386 firms had applied for exemption and they were turned down because they did not meet the criteria. To qualify for exemption, levy payments must be up to date and the company must provide a case motivating why it cannot afford to pay the minimum wage.

Non-compliance had been going for years, Deetlefs said.

Liu said the option to apply for exemption was news to the chamber.
 

Africa - Minimum wage factory shutdowns head for talks 

Source: Business Report

Date: 05/09/2010

Ref: http://www.busrep.co.za/index.php?fSectionId=552&fArticleId=5633034