The fate of 20 000 textile workers depends on the outcome of a wage debate sparked by non-complaint companies’ court action against the Department of Labour in the KwaZulu-Natal High Court last week.
The five Newcastle clothing manufacturers, which are also part of the United Clothing and Textile Association (Ucta), are seeking a review and order setting aside the minster’s decision to extend the wage agreement to clothing manufacturers that are not members of the bargaining council, on a basis that such a decision was unlawful and unconstitutional.
The application has also been brought against the Bargaining Council for the Clothing Manufacturing Industry and the Southern African Clothing and Textile Workers’ Union (Sactwu).
According to papers before the court, owners of these factories argue that the extension of the agreement to non-parties compelled their factories to pay staff minimum wage. They further stated that if the factories complied with the minimum wage provisions, four of the five would close and the fifth would have to fire a third of its staff.
At the centre of the debate was also the wage model based on productivity, which Ucta believed would create more jobs in the clothing and textile manufacturing industry. Chairman Ahmed Paruk said the association believed that workers should be paid according to their productivity. “This model encourages workers to produce more and also (to) beat the deadline. This has worked in China, Pakistan, Mauritius, where most the retailers worldwide get their merchandise from.”
Paruk’s argument was supported by the Centre for Development & Enterprise (CDE) report on how an alliance of organised labour, the state and some firms, was undermining labour-intensive growth. “The struggle of the Newcastle clothing producers to remain in business is symptomatic of the difficulties involved in promoting labour-intensive growth in South Africa,” the CDE said.
The centre believes that the Newcastle case was very important as Chinese-South African entrepreneurs are an asset for the country. “Their factories point the way to how this country could encourage more industries providing employment for low skill workers. South Africa can compete with Asia.”
Allowing low-wage producers in places like Newcastle to continue to exist will not harm jobs in the upper-end of the industry. “Instead it will accommodate the needs of lower-skilled workers, the unemployed and poorer consumers who purchase basic clothing goods rather than the pricier, branded fast fashion products.”
Sactwu previously said workers in these factories earned R250 to R400 a week, far below the legally prescribed minimum of R534 a week. Sactwu said last week that the CDE report was part of a carefully orchestrated campaign to attack compliant firms and undermine the democratic government’s decent work agenda.
“In essence, it masks illegal under-payment of clothing workers with an academic veneer and promotes job losses in companies which obey the law.”
Sactwu’s general secretary, Andre Kriel, said at a broader level this was a political and right-wing economic aim to dismantle the collective bargaining legal framework agreed to by business, labour and the government at Nedlac and as subsequently enshrined in the Labour Relations Act. “The report promotes ever harsher exploitation of the poorest of the poor.”
He said the industry wage agreement did make provision for productivity payments.
According to the CDE, owners felt that there was a failure to understand how difficult it was to compete at the bottom of the clothing market.
“Profit margins are very low, and tight deadlines are stressful for owners and workers. In this highly competitive environment, missed deadlines can turn a small profit into a major loss as penalties are imposed and orders cancelled.”
Some owners live on their factory premises, mobilising their family to work long hours in the factory if a deadline is in danger of being missed.
But Sactwu said: “This will ignite a race to the bottom, the rise of a sweat shop economy in the domestic clothing industry and extreme exploitative conditions for vulnerable workers.”