Are workers safe in South Africa?

Fair Wages Fair Competition For Labour?

Are wages fair in an economy where employers can collude with others and hide information about pay from the public?

Blood-stained profits remain safe and boardrooms beautiful when bodies litter landscapes and the living are appeased with meagre handouts.

Without specific regulations to curb employer power, bodies and crushed lives will continue piling up while exploiters and denialists extract profits from labour.

Competition Act Corners Unfair Recruitment

Competition Law can be used to stimulate fair competition for talent and prevent stagnating or unfair wages.

Organisations such as SABPP, Kelly Recruit SA and O’Brien recruitment apply prejudiced recruitment practices to dominate the rights of workers and suppress their right to fair wage negotiations. Spying on rival employer pay and abusing market positions are clear violations of the Competition Act.

Competition Act purpose

To provide for the establishment of a Competition Commission responsible for the investigation, control and evaluation of restrictive practices, abuse of dominant position, and mergers; and for the establishment of a Competition Tribunal responsible to adjudicate such matters; and for the establishment of a Competition Appeal Court; and for related matters.

The Competition Act

Gutted for Greed

Take the Marikana strike, massacred workers were suspicious of bosses benefiting unfairly while they suffered economically as a result of poor pay. Minimum wages juxtaposed against unlimited executive earnings are hardly likely to keep appeasing the masses, will the unrest and murders keep happening?

The Commission publicly wonders if competition policy can impact poverty and inequality while international agencies such as the Organisation for Economic Co-operation and Development (OECD) have been highlighting and expanding on the protections required to protect labour markets through Competition legislation for years.

Pay Slip and CTC Sharing is an Abuse of Employer Power

Many firms demand pay slips or ‘cost to company’ (CTC) from job applicants. 

This means recruiters and employers obtain rival employers’ competitive compensation information, making it easy for unscrupulous employers to poach talent, offering a marginal rise to out-compete a current employer.

Even The Competition Commission has been caught conducting anti-competitive recruitment by making it compulsory for job seekers to submit privileged costs to company information.

Compulsory means job seekers are forced to submit, the Commission seemingly understands that the disclosure is not a willing one and that applicants must be obliged to submit to an unfair demand.

Like many other employers, even the Auditor General, the Commission uses and condones widespread employer advantages during recruitment to drive wages down.

This is bad news for the public as the Competition Commission exists to protect an inclusive competitive economy, their conduct sets a precedent for other employers who also want to exploit labour markets in this manner.

Competition Law is supposed to be used to protect a fair competition for talent which would mean preventing employers from colluding on pay and conditions of employment to gain market advantages.

Competition means employers make competitive offers to attract job seekers and benefit from their skills and add value. When employers don’t compete for talent, they push the view that people work to have a job, they don’t work to pursue better economic opportunity through wages.

Wage is negotiated during recruitment

Recruitment is the process whereby employers attract applicants to deliver their services or produce products.

Employers use adverts to convey job vacancy information to the labour market. They hire recruitment firms to manage the advert or they control the vacancy message directly through their own Human Resources.

Market Mischief

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Are you willing to work for less pay simply to get a job?

Employers complain they can’t find adequately skilled people to hire, yet they don’t recruit correctly. Human Resources teaches transparency in organisational processes is best, does that mean HR practitioners are mostly unqualified or that their knowledge is deemed subversive in neo-liberal economic contexts?

Neo-liberal economists want governments to leave markets alone so employers and producers can self-regulate. They argue against regulations for workers so that employers can benefit from low wages.

Employer pay transparency during recruitment is critical for attracting the right people, secrecy acts as a barrier to turn applicants away.

Employer policy and regulation structures need to be reshaped towards equality, equity and Constitutional Democracy.

Recruitment firms are either instructed by employers to omit salary ranges from job adverts and then demand payslips and CTC, or the recruitment firms advise thus.

These practices are widely regarded as unfair yet aren’t challenged legally as a result of worker vulnerability.

When employers have too much power it’s referred to as monopsony power.

Monopsony power can be when it’s difficult for workers to shift between employers, to resign and find another job quickly. This means there are costs and barriers to moving between jobs.

Employers love to have as much monopsony power during recruitment as possible. This gives them the power to pay wages lower than what their business can afford.

Where there are high levels of unemployment, such as in SA, firms rise to even greater monopsony power. When job seekers must out-compete others for limited jobs, they may sacrifice how much they are willing to earn simply for the sake of securing a job.

Some workers are forever trapped in a monopsony situation, such as nurses and train drivers. They have a limited choice of an employer which means they have even greater difficulty finding well-paid work, especially if they were dismissed. 

When workers are too afraid to resign because their chances of finding alternative employment are low, employers can treat them unfairly, even to the extent of dropping wages.

This employer power must be regulated in South Africa so that labour markets conform to S23.1 of the Constitution ‘everybody entitled to fair labour practice.’

Employer power is being regulated in other countries to address inequality and stagnating wages.

Please help us take action

and advocate for a fair economy accessible to everyone.

Sign our petition, and make it fair!

References

Lilenstein, K., Woolard, I., Leibbrandt, M. (2016). In-Work Poverty in South Africa: The Impact of Income Sharing in the Presence of High Unemployment. A Southern Africa Labour and Development Research Unit Working Paper Number 193. Cape Town: SALDRU, University of Cape Town http://opensaldru.uct.ac.za/handle/11090/852

Global Forum on Competition ‘DOES COMPETITION CREATE OR KILL JOBS’ Contribution from the United States, 20-Oct-2015 https://www.ftc.gov/system/files/attachments/us-submissions-oecd-2010-present-other-international-competition-fora/1510jobscompetition.pdf

Wage determination in perfectly competitive labour markets https://www.economicshelp.org/labour-markets/wage-determination/