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Massive rot exposed in private security sector Bargaining Council

A security member stands guard on December 6, 2013 in front of a statue of late South African President Nelson Mandela in Johannesburg, as many people are expected to come pay respect to the country's former president a day after his death. Mandela, the revered icon of the anti-apartheid struggle in South Africa and one of the towering political figures of the 20th century, has died aged 95. Mandela, who was elected South Africa's first black president after spending nearly three decades in prison, had been receiving treatment for a lung infection at his Johannesburg home since September, after three months in hospital in a critical state. AFP PHOTO / STEPHANE DE SAKUTIN

The Bargaining Council was meant to better the salaries, benefits and working conditions for workers

JOHANNESBURG – A massive rot has been alleged in the South African security industry, amid contentions that some of the big companies are abusing their wealth and powers in the National Bargaining Council to shut out competition from small players – through arm-twisting and monopolization of especially the tender process.

At inception, the bargaining council was meant to better the salaries, benefits and working conditions for workers and ensuring transformation of the industry’s economy, create equal opportunity for all and promote the principle of good practice underpinned by fair competition in the way businesses conduct themselves in the competition environment. Allegations are that these have all be overturned by some unscrupulous operators.

The complaints, some of them already presented to the Portfolio Committee on Police and Employment and Labour, are that some wealthy companies are using their influence on the bargaining council as an arsenal to shoot down competition, as they place themselves on an even-keel to monopolize tender processes through unfair practices.

Small players allege the council has come at a price to particularly companies owned by the previously disadvantaged members of society and their employees, with additional levies and bureaucratic requirements that have continued to undermine the agenda for transformation and equality.

Small players in the private security sector could be disadvantaged by the Bargaining Council

They allege that the established businesses have used the council as a rod to strike perceived enemies, using the council to unfairly award tenders and support court action against small private security companies that are already struggling to stay afloat of the murky waters of massive competition.

“The bargaining council, whose aim was to better the lives of employees, has now been used to ring-fence the nefarious agenda of a few wealthy companies, affecting employees from the previously marginalized employers,” said a member of one organisation representing small security companies in an interview with African Voice Global.

This is not the first time a red flag has been raised over unfair practices related to the bargaining Council. In February, The Association of Private Security Owners of South Africa (TAPSOSA), an employers’ body operating in the Private Security Industry, questioned the legitimacy of the bargaining council. 

TAPSOSA argued that the establishment of the council was in breach of Section 32 of the Labour Relations Act, which set certain obligation to the Minister to consider extending the scope of the bargaining council to non-parties, including the requirement of the representation of parties to the council, that non-parties to the collective agreement are identified and members of the trade unions or employer organisations, whose members constitute the majority of members that are party to the bargaining council, vote in favour of the extension.

“According to statistics by the Private Security Industry Regulatory Authority (PSIRA) there are more than 9,000 registered and active security businesses employing more than 540 655 employees,” charged TAPSOSA.

“Of these, the employer organisations in the bargaining council only represent less than 132 security businesses as per their application to the Registrar and employing less than 178,811. In addition, the total membership of unions collectively was 134,823 during the application for registration and we are told that according to the recent verification by the Department of Employment and Labour, unions represent less than 30,000 members.”

The organisation believed that Minister of Labour Thembelani Nxesi, did not do his homework properly in granting the extension, thereby further disadvantaging the historically disadvantaged employers and employees.

“The move means the bargaining council will receive more than R7 569 170 per month,” said Moses Malada, the TAPSOSA secretary general, who argued that employees would be further disadvantaged by the extra levy of R7 per month in contribution towards the bargaining council, of which another R7 would be paid by employers for each employee.

“The institution, through the courts, demanded the removal of these people as the board of trustees for mismanagement of funds and other irregularities which resulted in them opting out as part of a court settlement.”

TAPSOSA argued that most employees were already being underpaid, while the majority of employers cannot afford additional fees as they operate in the most vulnerable sector where clients appoint companies on the principle of the lowest bidder. 

TAPSOSA believes the regulation of the security sector should be independent of conflicting interests, arguing that the National Bargaining Council has created a situation in which one employer regulates and investigates another employer, thereby defeating the purpose of fair competition and has threatened a legal challenge of the authority of the minister in extending the collective agreement of the bargaining council to nonparties.

“In their quest to monopolise this industry, the wealthier have managed to blindside and capture some of the trade unions by making them believe that the establishment of the bargaining council will bring about better wages and working conditions of employment. This is despite having convinced the same trade unions to conclude an agreement which results into the current terms and conditions of employment currently applicable in terms of the sectoral determination being incorporated in the main agreement of the bargaining council with minimum adjustment,” added Malada.

“This is contrary to the principle of a genuine bargaining council of negotiating better wages and conditions of employment and substantive issues such as the closing of the apartheid wage gap, bonuses or incentive schemes, transformation and attainment of the living wage. This then raises the question as to the need for a bargaining council if the parties adopted the minimum wage that was already applicable in terms of the Sectoral Determination as the main collective agreement.”

Allegations abound that some of the trade unions were funded by some employers to dovetail their members to support the bargaining council, abdicating their main role of fighting for the rights of workers to fleecing them. 

In a letter to the Portfolio Committee on Police and Employment and Labour TAPSOSA bemoaned the fact that certain people who were removed from the Private Security Sector Provident Fund (PSSPF) for wrongdoing occupied key positions in the bargaining council, where they would be exposed to billons of rand in this bargaining council.

“How do we then entrust that they will manage our monies and that of our employees in the bargaining council when the PSSPF was mismanaged? Those deployed in the council are from big businesses and major trade unions who may be relentless with their manipulation through this bargaining council as they will now have a direct control on who must be persecuted and liquidated.” 

Further allegations are that established businesses had betrayed the principle of negotiating better wages and conditions of employment, closing of the apartheid wage gap, bonuses or incentive schemes, transformation and attainment of the living wage, which should be the reasons behind a “genuine bargaining council”.

“This then raises the question as to the need of the bargaining council if the parties adopted the minimum wages that was already applicable in terms of the Sectoral Determination as the main collective agreement,” added the organisation.

“The establishment of this bargaining council seek to confirm that the intention is to give other employers with a vested interest, the benefit of directly regulating other employers further undermining the principle of a fair competition. These employers will have a direct control on who to target and who must get which tender. 

“We are convinced that the establishment of the bargaining council is no longer what the trade unions strived for instead there is an emergence of trade unions through promotion of unlawful closed shop agreements as means of addressing representation for the sustainability of the bargaining council. This is done without complying with the provisions of the LRA.”

Among other things, the bargaining council has been accused of breaching Section 30 (1) (b) of the LRA stipulating that the constitution of a bargaining council must have a provision for the representation of small and medium enterprises and the requirement that the Registrar in determining the registration of the bargaining council should have the industry data that is applicable in terms of the PSIRA, UIF and SARS and available to it instead of allowing the parties to thumb suck the figures. 

“As TAPSOSA, we are steadfastly against the powers given to this bargaining council to regulate the industry as there are a lot of regulatory authorities in place where employers and employees are required to make monetary contributions. PSIRA should be the only regulatory authority and be given necessary powers and functions to regulate the industry independently and effectively including the provision for restitution. Where wages, terms and conditions of employment are to be negotiated, a chamber within PSIRA could be established for such. This will be the same as the chamber of mines and other sectors that have regulatory authorities and thus duplication of resources is avoided.”

Described as “a monster with hyenas wearing African attire assembling to decide who is their next victim”, the bargaining council was further rapped for its absence of a provision dealing with transformation in its constitution and section 3.2 of its constitution which states that “Bonus or incentive schemes that are directly linked to profit or productivity or both provided that these schemes may be negotiated with employer representatives or representative trade unions and that these schemes will not detract from agreements reached in terms of Clause 2.1 of the constitution, among other things.

TAPSOSA also raised alarm of the fact that the parties to the council entered into an agreement agreeing that the Sectoral Determination dealing with minimum wages and conditions of employment will be used as the basis of the main collective agreement of the bargaining council, that the chairperson of the council is an employer while the General Secretary and the PA were both from the major companies, the alleged exclusion of small and medium enterprises seemed to be a deliberate exclusion of other parties which is against the provisions of the LRA against the requirement of Section 30 of the LRA in which subsection (1) (b) which requires that there must be a representation of small and medium enterprises and that the Registrar ought to not have registered the bargaining council as its constitution did not meet the requirements of Section 30 (1) (b) which is directive and not discretionary. 

“Given the issues raised above, we request the Minister of Employment and Labour to issue a government gazette notice withdrawing the extension of the two collective agreement on levy and the main collective agreement or give an undertaking that he will not enforce the bargaining council agreement pending the legal challenge that TAPSOSA is undertaking. The wages and terms and conditions of employment be promulgated in the Sectoral Determination,” added TAPSOSA.

“Our view is that we should use the existing regulatory framework without creating additional financial burden to employers and employees and not allow other employers to use institutions of enforcement to target their unwanted competitors. We should be rallying together to transform this industry for the betterment for all operating in it. We are of a strong belief that the Honourable Minister did not satisfy himself if the request for extension meet the requirements of the act and thus disadvantaging the already historical disadvantage employers and employees.

“By doing so he has enabled those who have designed the bargaining council to achieve their narrow selfish objectives to begin celebrating knowing that they will now have a direct access to target their opponents and accelerate the erosion of the gains for transformation.”

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