Minimum Wages and Conditions of Employment for Farm Workers

1

• Minimum Wages and Conditions of Employment for
  Farm Workers

Modified by the GA Agriculture Education
Curriculum Office July 2002
2
Structure of Presentation

• Introduction
• Socio and economic position of farm workers
• Scope for increasing wages
• Motivation for a minimum wage
• Recommendations

3
Introduction
4
Focus of the Investigation

• Conditions and circumstances facing
• Farmers
• Farm workers
• Establishing an appropriate minimum wage and
  conditions of employment in the agricultural
  sector

5
Information Gathering

• Lack of
• Good statistical information on size of
  agricultural sector
• Information on wages and conditions
• Used
• Case studies (70 farms)
• Statistics SA census and agricultural census
• October Household Surveys

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Part I Social and Economic Position of Farm
Workers
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Major Findings Employment

• Agriculture and hunting provide 930, 000 jobs
• 70 of all SA farm workers are male, relatively
  young, and have small households
• Most farm workers are South African
• Approximately two thirds in permanent employment

8
Employment Provincial Distribution
9
Employment Changes in Numbers (1918 2010)
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Poverty

• Defined poverty as a lack of capability
• Used following indicators of poverty
• Nutritional status
• Literacy status
• Access to infrastructure, including housing

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Major Findings Poverty

• Farm workers children are more likely to be
  stunted and underweight. Only children in the
  former homelands had a higher prevalence of
  wasting
• A third of farm workers children are stunted
• One in five are underweight
• One in 25 display symptoms of wasting
• Only one in four is food secure

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Hunger Risk Classificationin Children Aged 1-9
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Major Findings Poverty

• 65 of all farm workers live in formal dwellings
• Farm workers have the lowest levels of literacy
  in the country
• Female workers receive lower wages, less
  benefits, and are less likely to be permanent
  workers

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Education and Literacy Levels
Source Case studies
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Major Findings Wages

• Average wage was found to be R544,00 per month
• Average wages paid to males R667
• females R458
• Farm workers are the lowest paid workers amongst
  the formally employed
• About 25 of the wages paid to farm workers are
  in-kind
• High levels of debt to the farmer or farm shop

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Range of Weekly Wages
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Wages and Payment in Kind Per Province
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Major Findings Conditions of Work

• 54 of workers work more hours than the maximum
  allowable limit but do not get paid overtime
• 27 do not get annual leave
• Evidence of child labor
• Need for substantial improvement in compliance

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Conclusions

• Farm workers and their families live in absolute
  and relative poverty
• Poverty is more usefully defined as the absence
  of capabilities than with reference to a wage
  rate.
• Policy interventions should address the
  improvement of capabilities of farmworkers
• Clear correlation between farm worker income and
  access to housing, household services, literacy
  levels, health services, etc.

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Conclusions

• A minimum wage can improve access to these
  capabilities, and the circumstances of farm
  workers justifies the introduction of a minimum
  wage.
• Howver, the most vulnerable farm workers, women
  and children, could lose most if set too high.
• A minimum wage can only be one instrument amongst
  others required to eradicate poverty from among
  farm workers.

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Part II Scope for Increasing Minimum Wages
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Issues Addressed

• This part looked at
• Theoretical background
• Competitiveness of commercial farming sector
• Employer and employee expectations
• Wider economic implications

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Theoretical Background

• While, theoretically, minimum wage can have
  adverse effect on employment, it depends on what
  level the wage is set
• The effect of a minimum wage on alleviation of
  poverty is ambiguous income transfers may be
  better
• Decentralised wage setting may be desirable,
  depending on implementation constraints

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Competitiveness of Commercial Agriculture

• The sector as a whole has benefited from
  restructuring and deregulation, although there
  have been winners and losers
• The share of labor and capital has declined, and
  the share of intermediary goods have increased
• There was a positive growth in net farm income
  from 1990 to1996
• There has been improved productivity but a lower
  gross value of production

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Employee and Employer Expectations

• Employers believed they would be negatively
  effected if a minimum wage was above R25 per day
  or R608,90 per month
• Workers expectations were modest 20 higher
  than employers
• Workers recognized the possibility of job loss

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Macro-Economic Considerations

• Modeling exercise showed that increasing the
  minimum wage would
• Have no significant impact on prices or output
• Could lead to some job shedding (depending on
  where it was set)
• May increase total economic output and household
  incomes
• 39 of rural incomes derives from agricultural
  wages

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Part III Motivation For a Minimum Wage
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Why Set a Minimum Wage?

• To reduce inequalities within the agricultural
  sector
• To improve the situation of the most vulnerable
• To contribute to rural incomes
• To help to alleviate poverty
• To contribute to a rural development strategy

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Under What Circumstances can a Minimum Wage
Achieve its Aims?

• If it is accompanied by
• Improved enforcement
• Other labour market interventions to improve
  skills, health and safety, social security, and
  labour relations
• Other government interventions to improve
  capabilities
• e.g. housing, education, health care
• If it not set to high, since this could lead to
  the most vulnerable lose of their jobs

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Is it Affordable?

• YES
• In the long term, agricultural sector is more
  healthy now than in the pre-regulation era
• Success of minimum wage is dependent on future
  health of sector which is positive

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How Should a Minimum Wage be Set?

• No single minimum wage aligned to accommodate
  different sub-sectors and conditions within
  agriculture
• Modest level to protect the most vulnerable
• Phased in to give stakeholders time to prepare

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Part IV Recommendations
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Scope of Sectoral Determination

• The sectoral determination should apply to
• permanent and seasonal workers
• all forms of primary and secondary agriculture
  including qua farming 
• farmers as well as labor only sub-contractors in
  the agricultural sector.
• Minimum wages should not apply to farmers who
  employ 5 or less workers.

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Proposals for Minimum Wages and Remuneration
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Minimum Wages

• Seasonal workers should get slightly higher wages
  
• Up to 20 can be deducted for payment in kind

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Payment in Kind

• Only accommodation or food can constitute payment
  in kind, and only if it is provided
• by the employer at his or her cost
• on a consistent and regular basis as a condition
  of employment
• It may not constitute more than 20 of the total
  wage, and the maximum value may only be 10 of
  the wage if only food or housing is provided

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Accommodation

• Must meet the following conditions
• Roof does not leak
• Glass windows that can open
• Has electricity
• Water is available inside the house
• Flush toilet or pit latrine is available in, or
  in close proximity to, the house
• The size of the house is not less than 54 square
  meters or 10 square metres per adult resident

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Proposed Conditions of Employment
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Conditions of Employment

• Most conditions were found to be appropriate for
  the farming sector
• Greater problem of non-compliance
• Changes were required to
• Sick leave - Extension of hours
• Night work - Notice periods
• Work on Sunday - Children in employment
• Some changes from the transitional provisions of
  BCEA.

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Sick Leave

• Due to problems of accessing health care in rural
  areas, number of people who would be able to
  issue a medical certificates increased to
  include
• clinical nurse practitioner with clinical
  curative skills
• traditional healer
• community health worker
• psychologist
• any other health practitioner authorised to
  diagnose a medical condition.

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Extension of Hours

• Farm workers need to work longer hours at certain
  times such as harvesting
• Can extend hours in some parts of the year on
  condition that reduce during other parts
• Maximum weekly working hours 50

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Payment for Work on Sundays

• Farm workers sometimes required to work for short
  periods on Sunday
• Proposed that
• If work less than 1 hour, get double the wage for
  one hour
• If work more than 1 hour but less than 2, get
  double pay for time actually worked
• If work longer than 2 hours but less than 5, get
  ordinary wage and another day off in the next
  week.
• If work longer than 5, get double pay and another
  day off in the next week.

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Night Work

• Farm workers often have to begin work earlier
  than other workers
• Night work takes place between 20h00 and before
  04h00
• In other sectors it is defined as between 23h00
  and 0600. 

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Termination of Employment

• Longer notice periods are proposed since if
  farmers loose their jobs, they could also loose
  their accommodation
• Provisions are proposed to protect crops and
  cattle of farm workers
• Proposals aligned to Extension of Security of
  Tenure Act

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Children and Young Workers

• Children under 15 are prohibited from working on
  farms
• It is proposed that for children between 15 and
  18 there is a
• ban on night work
• 35 hour ordinary work week
• prohibition on working with agro-chemicals

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Other

• It is proposed that
• there be a six-month period between promulgation
  of a sectoral determination and its coming into
  operation
• further variations or exemptions can be granted
  on the basis of evidence, as specified in BCEA

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Improved Enforcement
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New Initiatives

• Report recognized limitations of existing forms
  of enforcement
• Identified five current initiatives that could
  assist with implementation
• One is being spearheaded by Department of Labor
  and has support of key social partners Vision
  for Agricultural Labour Relations
• Anticipates common and co-ordinated program of
  action around awareness raising, training, and
  addressing of obstacles

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New Initiatives

• Other initiatives include
• Voluntary efforts to create a code of conduct or
  good practice amongst a specific group of farmers
• Reward farmers for following fair labor practices
  with access to state support
• e.g. Social Product of the Land Bank
• Industry agreements to support fair labor
  standards
• External interventions such as ethical trading
  initiatives

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Conclusion

• It is a process to improve conditions for
  vulnerable workers
• Aspects of this process include
• Establishing the appropriate regulatory
  environment
• Improving skills
• Improved enforcement
• Poverty alleviation and social development
  strategies of government as a whole

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Remember

• These are only proposals. They are not legally
  enforceable.
• These are only minimum wages. Employers can still
  pay more than the minimum.