Why formal employment is not a guaranteed path to social equality

The theme of this year’s World Day of Social Justice is “Achieving Social Justice through Formal Employment”. Gaining access to formal employment can greatly reduce poverty. As it is, more than 60% of the working population in the world – 2 billion people globally – eke out a living in the informal economy. In theory, formal employment provides a more stable income, social protection and employment-related benefits.

However, the reality is that many formal sector jobs are increasingly precarious and do not provide any of these benefits, meaning that formal work is not a guaranteed path to greater social equality.

Internationally, there has been a rise in so-called precarious work. While there is no single definition of precarious work, it is generally used to refer to insecure, poorly-paid work and work without access to benefits, such as medical aid. Examples of these forms of work include seasonal work, casual work, gig work and agency work, what is most often called labour broking in South Africa.

In South Africa, these various forms of precarious work have increased substantially. Between 2004 and 2017 the number of people employed in the ‘non-core’ segment, another term for precarious work, increased by 71%, two times faster than in the formal or informal sectors of the labour market. As a result, it is estimated that four out of ten workers in the formal sector may be in some form of precarious work.

These workers are likely to earn, on average, half of what a permanent worker makes and they are more likely to suffer violations of their basic labour rights, such as not receiving paid sick leave. Such forms of precarious work entrench inequality and poverty rather than achieving the goal of social justice.

Decent work for all?

The UN Sustainable Development Goals include the creation of so-called decent work. Decent work is defined as work that provides a fair income, security, social protection, the prospects for personal development and the right to organise at work.

Decent work is, therefore, about more than simply getting more people into work. The challenge is to create socially transformative labour markets that can create employment for inclusive, prosperous and equitable societies.

However, South Africa’s record in this regard is patchy.

The national minimum wage, which was introduced in 2019, was and continues to be set at a level that does not cover basic needs.

In October 2021, the NGO the Pietermaritzburg Economic Justice and Dignity Group, found that the cost of the average household food basket was R4,317.56 a month.

Yet a worker earning the national minimum wage and fortunate enough to be in full-time employment (45 hours a week) would only have earned R3,904 in a month. Not enough to cover just basic food items, never mind costs for transport, electricity and a range of other essential items.

The data provided by the NGO is based on tracking food prices on the most commonly bought food items, such as maize meal, rice and bread, in 44 supermarkets in working class areas of the country. This provides the real cost of basic items rather than estimates based on rates of inflation. And, therefore, provides real insight to the extent to which many of those working in the formal sector are ‘working poor’.

For the range of precarious workers who may not even work 45 hours a week due to the increasing use of variable hour or zero hours contracts, their situation is even worse.

Achieving greater social justice through formal employment is only a realistic possibility if such work provides, at least, a living wage and protection of labour rights.

But it is estimated that 60 per cent of the workforce in South Africa experience some violation of their labour rights. Yet most of these violations go unreported. In the context of high unemployment, workers fear reporting these labour violations for fear of dismissal.

Even when workers do report their employers the road to justice can be long, as I have been documenting for a number of years following labour broker workers seeking to access their rights to permanent employment.

Tackling precarious employment

One positive intervention that the state has made in attempting to address precarious employment has been its attempt to regulate the use of labour broking.

Labour broking is when a company provides workers to client companies, supposedly on a temporary basis. However, very often labour broker workers work for years at the same company, performing the same work as permanent workers for inferior wages and no benefits.

In 2014 the Labour Relations Act was amended to restrict labour broking to work of a genuinely temporary nature. It requires that labour broker workers become permanent employees of the client company after three months. While this was not the ban on labour broking that the labour federation Congress of South African Trade Unions called for it was, in theory, a significant step forward in the rights for labour broker workers.

However, the path to gaining these rights has been arduous for many workers.

When workers open cases against their employers, either at the Commission for Conciliation, Mediation & Arbitration or at bargaining councils – which solve labour disputes – employers often victimise workers and continually delay proceedings in the hope that the workers will give up their case.

Furthermore, many of these workers take up these cases themselves as most precarious workers do not belong to unions. Indeed, only just over a quarter (27%) of the total formally employed workforce is unionised, the majority of whom are workers in skilled and supervisory positions. Yet the rules of representation at the Commission for Conciliation, Mediation & Arbitration and bargaining councils only permit representatives of registered trade unions or lawyers to represent workers in these forums.

This puts non-unionised workers in a David versus Goliath situation where they must follow the rules of the Commission and argue their case while facing, at least, trained human resources professionals or, at worst, several lawyers from some of the most prestigious law firms in the country.

Workers complain that they often feel pressured by Commission for Conciliation, Mediation & Arbitration commissioners, who are themselves performance managed on how many cases a day they settle, into accepting settlements that do not resolve the injustice that they seek to address.

Thus, it has been estimated that as much as 80% of labour broker workers have not been deemed permanent and continue to work in precarious conditions.

Achieving social justice

Getting a formal sector job is not on its own going to create greater social equality. Workers need a living wage and an environment in which rights are protected and enforced.

This requires both strong state enforcement and the organisation of workers.

Declining rates of unionistation among workers is a result of the increasing precarious nature of work, and the limited responses that unions have had to this.

However, workers are not waiting for unions to come and organise them and have taken the initiative to organise themselves in a variety of sectors and, in many cases, are successfully winning their demands.

Yet, such workers formations are excluded from the labour institutions. One advance that could be made in promoting social justice through formal employment would be to recognise all forms of worker organisation, and afford them greater rights in protecting and advancing worker rights.