|Article Date: 07 October 2011
In a facilitated process by CCMA Commissioners Ronald Bernickow and Lesley Owen, the trade union and employer parties to the National Bargaining Council for the Clothing Manufacturing Industry on 5th October 2011 signed a landmark agreement aimed at promoting job opportunities for first time entrants and creating jobs while protecting the wages and employment conditions of current and qualified employees and offering employers protection against retrenchment and preferential reemployment in the event of retrenchment.
The new wage agreement which also importantly provides for a 6.5% wage increase for existing employees, is the first of its kind in South Africa that creates a clear incentive for employers to create jobs in a real and substantive manner, as it allows for the employment of new workers at wages that are 30% and 20% respectively lower than the current legally published wage rates in metro and non-metro areas. The parties have also agreed to jointly approach the Minister of Labour to seek Ministerial extension of the full agreement to non-parties within the entire country, as provided for in the Labour Relations Act.
While there is a broader and ongoing debate within South African society on how best to create jobs and to meet government job growth targets over the next five years and more, this agreement is the first of its kind wherein organised labour and business has seen the necessity and importance to use a facilitated collective bargaining process to reach a settlement. The parties believe that this agreement offers the industry some hope to arrest current job losses and to create new jobs on the basis of an agreed set of principles that best protects their respective interests.
The agreement also sets out clear job growth targets up to 2014 with 3% job growth projected for each six-month period with the ultimate target being a job growth of at least 15% over an initial thirty-month period in an industry that has bled thousands of jobs over the past years. As a first step, the agreement aims to halt further jobs losses and allows for the entry of new and untrained first time entrants at the lower entry level wage. The agreed bi-annual benchmark monitoring on job creation shall be measured against the industry’s formal employment strength at compliant companies as at June 2011 and the following schedule of new employment growth will apply for such monitoring purposes:
1 March 2012: 3% increase
1 September 2012: 6% increase
1 March 2013: 9% increase
1 September 2013: 12% increase
1 March 2014: 15% increase
The agreement provides further that the new entry wage dispensation will fall away in 2014 if job creation targets are not met and if the parties do not agree on other alternatives to create jobs by then. The parties however are hopeful that the agreement will be sufficient incentive for retailers to repatriate offshore clothing manufacturing and consequently create jobs at sustainable levels in the South African clothing industry. A further important feature of the agreement is the parties commitment to establishing a new training and productivity entity for the industry.
A working group will be established on an urgent basis with the initial mandate to meet sufficiently often enough in order to conclude an agreement on the role, structure, budget and source/s of funding for such a training and productivity entity. In this regard the parties have also agreed to jointly approach the relevant Sector Education and Training Authorities (SETA), the Department of Trade and Industry (DTI), the Government’s newly established job fund, and any other potential relevant national and international sources of funding to seek financial and other support and assistance for the establishment and functioning of such an industry training and productivity entity.