Deregulation and working hours in the retail sector

Title: Deregulation and working hours in the retail sector
Creator: Lewis, Peter
Subject: National Labour & Economic Development Institute
Type: text
Type: pamphlet
Identifier: http://hdl.handle.net/10962/110804
Identifier: vital:33336
Description: This research report investigates changes in working time in the retail sector in the 1990s in the broad context of the extension of trading hours, the deregulation of the distribution of goods in the South African economy and the resulting intensification of competition in the sector. The research data that forms the basis of the analysis comes from two surveys undertaken by the author in the course of 1996. The first was conducted in the Cape Town branch of the South African Commercial, Catering and Allied Workers’ Union (SACCAWU), which gave detailed information on working hours, employment practices and conditions (hereafter referred to as the “Cape Town survey”). The second survey was a questionnaire sent in November 1996 to Human Resource Managers of 51 of the larger retail companies in clothing, footwear, jewelry, furniture, general merchandise, and miscellaneous markets (hereafter referred to as the “retail survey”). Although the response rate was very poor (only 7 companies responded), the information from the replies is nevertheless informative. The report begins with an account of the deregulation of retailing that has taken place rapidly from the late 1980s onwards, part and parcel of the shift in political power. For important sections of the formal retail trade sector, competitive pressures have increased significantly increased by this development. Employers have reacted by attacking wage costs, which has led to a change in the forms of labour contract in retailing towards insecure, “flexible” part- time or fixed term contract work, and a decline in the influence of trade unions in the sector. These developments form the environment for the report’s focus on working time issues in retailing. The report examines the existing regime of working time for the retail trade sector as determined by Wage Determination 478 for the Commercial Distributive Trade. It assesses the impact on the Wage Determination of the current proposals and approach in the Employment Standards Bill, which will likely pass into legislation in some form during the current session of parliament. The paper analyses the Bill’s proposals for flexible working time standards, and concludes that they contain several problematic clauses that would hamper trade union efforts to secure a positive outcome to flexible working time innovations in the retail sector. The data from the Cape Town survey is used to illustrate the normal working time patterns in retail based on the Wage Determination, and shows that working hours are generally longer than 40 hours per week for full-time permanent workers who work a 5.5-day week. Furthermore, weekend and evening trading is covered by “flexible workers” working various kinds of “non-standard” contracts. The national employment and output profile of the sector is then examined through official statistics. They show that total retail sector employment reached a 40-year peak around 1988/9, it has since declined, despite the continuous increase in total retail sales during the transition from apartheid to democracy. Full-time “regular” or full-time employment has remained static in the sector since 1988, and the number of full-time equivalent posts has similarly been static. “Flexible” jobs such as part-time, “late sales”, and casual jobs have however fluctuated quite widely over the same period, from a low point of around 12% of total employment in 1988 and 1994, to high points of 25% in 1989, and 16% in 1994. The overall pattern is one where flexible labour is used by employers to manage variation in demand over the working week, seasonal variation during the working year, and longer-term business cycle fluctuations, such as the period of limited economic growth since 1994. Measured as the ratio between total retail sales and total employment, labour productivity increased over the period 1988-1995. Using the data from the retail survey and the Cape Town survey, the relationship between extended trading hours, turnover, and flexible labour contracts is examined in more detail. Weekend trading accounts for a very significant proportion of retail sales, and various forms of casual contracts take up between 20% and 50% of available labour contracts in the companies concerned. For some companies, new stores are now designed around only 30% “core” permanent staff, with the other 70% of contracts being “flexible”. A situation has therefore developed where full time “regular” workers are working relatively long hours (standard 45 per week + overtime), but are increasingly being supplanted by flexible workers with much shorter hours, poor pay, poor job security, and few (if any) fringe benefits of employment. This also undermines the bargaining position of trade unions in the industry, as bargaining units shrink. Because of the strong feelings of workers around reduction of working time to 40 hours, impending legislation on the issue, and the strong relationship in the industry between flexible labour, extended weekly trading hours, and seasonal variations in consumer demand, the issue of working time offers an opportunity to retail unions to make gains in shorter working hours, job creation, and employment security, if they can accept flexibility of working time for their established constituency. Innovations in working time such as “chosen time” and flexible working schedules need concerted attention from retail unions to prevent employers from controlling working time and employment contracts. Success depends on the degree to which unions can force employers into centralised bargaining. The paper looks at the failed attempt by SACCAWU to gain a centralised bargaining forum during 1996, which would have been an ideal instrument to address the issues around working time. This suggests that the best strategy for unions now is to concentrate on the struggle over the reduction of hours around the employment standards statute, and work on a “model” agreement with a large national employer, which can then be imitated with other employers, and then in a future centralised bargaining forum. The report then looks at examples where this opportunity has been exploited internationally, and there have been some trade union successes in company level bargaining. These examples combine job creation with reduced working hours, and some choice for workers over what hours they will work within the overall pattern of extended trading hours. The 1986 guidelines on flexible working time from the European retail workers’ federation are examined, and are recommended as still a useful approach for the South African retail unions in the mid-1990s. The report ends by looking at contemporary workers’ experiences of working time in South Africa at shop level as revealed by the Cape Town survey. The main barriers to workers accepting flexible working time are examined: these include problems of transport (and personal security), and child care. The section also assesses the way in which employers have maintained control over working time alterations at shop level to date. There is some interest among workers in shorter working hours - even with loss of some earnings - as well as changes in starting and finishing times of work. However, attempts by workers to negotiate favourable changes with their employers are usually unsuccessful, whereas unilateral changes in working time made by employers are more common.
Format: 39 pages
Format: pdf
Publisher: National Labour & Economic Development Institute
Language: English
Rights: National Labour & Economic Development Institute
Rights: No part of this publication may be reproduced or transmitted in any form or by any means without prior permission from the publisher

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