How can collective bargaining play a dynamic role in helping South Africa’s building industry get to where it needs to be?

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How can collective bargaining play a dynamic role in helping South Africa’s building industry get to where it needs to be?

Globally popular collective bargaining can invigorate a workforce to withstand market volatility and financial uncertainty while addressing issues of complexity

Cape Town, 21 February 2024 – There is no understating the value of a stable and dynamic building labour force.

A steady sector gives rise to new employment opportunities, business owners do not have to waste time and money redoing work, and the improved skills profile of individuals who benefitted from training and development results in high-quality building projects, on time and within budget.

This naturally has a positive impact on the economy.

In the construction industry, of which the building industry is a significant part, formal employment accounts for 62% of all jobs in the sector. According to Quarterly Employment Statistics data, the industry currently contributes around 3% to South Africa’s gross domestic product.

The formal sector also employs more than 250,000 people in the Western Cape.

Council Spokesperson (Business) – Danie Hattingh, the Building Industry Bargaining Council (BIBC), describes a stable workforce as one in which teams grow together and career mobility is enhanced to continuously make space for newer entrants to the sector.

“A stable labour force is characterised by low employee turnover rates. Workers tend to stay with their employers for extended periods, fostering a sense of continuity and reliability,” he says.

“Stability implies a consistent level of employment without frequent fluctuations in workforce size. This consistency provides employees with a sense of security and predictability in their jobs.”

Collective bargaining is an excellent way to foster a healthy and cooperative relationship between workers and employers.

At its core, Hattingh says, collective bargaining ensures that profitability is not “at all costs”.

“By levelling the playing field on fair terms and conditions of employment, all employers in the industry are competing on Unique Selling Points (USPs) like quality or quick turnaround times rather than on
labour costs.

“Value-added services that come with negotiated agreements serve both industry employers and employees who can access dispute prevention and resolution services that are designed to maintain peace in the industry. Large-scale, disruptive strikes are therefore avoided.”

While collective bargaining may not directly control market fluctuations, it can help mitigate the impact of volatility on workers and create a more stable and predictable work environment.

Council Spokesperson (Labour) – Luyanda Mgqamqo, BIBC, explains that parties to a bargaining council represent both labour (trade unions) or business (employer organisations). While the establishment of a bargaining council requires a minimum of 1 representative trade union and 1 employer organisation, bargaining councils all have different combinations and number of parties.

“The BIBC, for example, currently has 6 parties represented at the Council. Three of the parties are trade unions and 3 of the parties are employer organisations,” Mgqamqo says.

These 6 parties come together every 3 years to negotiate on new terms and conditions of employment, which are captured in a Collective Agreement. This is then submitted to the Minister of Employment and Labour for consideration. Collective Agreements may be negotiated annually.

Mgqamqo adds that since there are other industry participants who are not signatories to the agreement, the bargaining council then requests the Minister of Employment and Labour to extend the negotiated agreement to non-parties. This creates the level playing field that is needed for the industry to compete on unique selling points and not on reduced, exploitative labour costs.

One of the major benefits that can arise from these negotiations is participation in a retirement fund. This releases the burden to provide care to destitute retirees from the State and from equally destitute families.

“Responsible employers and their employees will have contributed to future retirement income, disability and funeral costs throughout the employment of employees,” Mgqamqo says.

“Then, a holiday provision and bonus, that are included in the daily rate, ensures that employers do not have to find income at the end of the year. The BIBC, in its role as Employee Benefits Administrator,
collects and holds these daily contributions in provision and pays it out on behalf of the employer at
the start of the industry closure period in December.”

The same provision applies to annual leave.

Hattingh points out that macroeconomic factors like power, transport and communication infrastructure are examples of issues that the industry needs to work together on, regardless of whether they
are competitors or not.

“Both employers and employees can work together to find innovative solutions to challenges, leveraging the diverse perspectives and expertise within the workforce.”

ENDS
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About the Building Industry Bargaining Council (BIBC)

Established by four employer organisations and two trade unions in the Western Cape’s building industry, both sides come together to engage in collective bargaining. Those organisations and unions include the Master Builders Association (MBA); MBA Boland; Consolidated Employers Association (CEO); Master Builders and Allied Trades’ Association Western Cape (MBAWC)); Building, Wood and Allied Workers Union of South Africa (BWAWUSA); and the National Union of Mineworkers (NUM).

Collective bargaining is a process in which employees/workers, through their unions, negotiate terms and conditions of employment with employers, through employer organisations. Through this process, a bargaining council contributes to and facilitates labour peace, stable employment, and the development and maintenance of a free, just, and prosperous South Africa.

Terms include basic pay, employee benefits, hours of work and leave.

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