a
ECC
PRIVATE SECURITY SECTOR
REPORT 2012
REPORT
OF
THE
EMPLOYMENT
CONDITIONS
COMMISSION
ON
THE
INVESTIGATION INTO THE REVIEW OF THE MINIMUM WAGES AND CONDITIONS
OF EMPLOYMENT IN THE PRIVATE SECURITY SECTOR.
CHAPTER ONE ...............................................................................................................................5
1.
1.1.
1.2.
1.3.
1.4.
1.4.1.
1.4.2.
1.4.3.
1.4.4.
1.5.
INTRODUCTION..............................................................................................................5
BACKGROUND TO THIS INVESTIGATION .............................................................5
WAGE NEGOTIATIONS IN THE SECTOR ................................................................7
TERMS OF REFERENCE ...............................................................................................8
METHODOLOGY ............................................................................................................8
PHASE ONE – INFORMATION GATHERING ...........................................................8
PHASE TWO – CONSULTATION WITH STAKEHOLDERS ..................................9
PHASE THREE – ECC PROCESS ...............................................................................10
PHASE FOUR- PUBLICATION OF THE SECTORAL DETERMINATION
AMENDMENT ................................................................................................................10
STRUCTURE OF THE REPORT .................................................................................10
CHAPTER TWO ............................................................................................................................12
2.
2.1.
2.2.
2.3.
2.4.
2.4.1
2.4.2
2.4.3
DESCRIPTION OF THE SECTOR ..............................................................................12
SECTOR DEMARCATION ...........................................................................................12
EMPLOYMENT IN THE SECTOR..............................................................................12
PRIVATE SECURITY GROWTH IN SOUTH AFRICA ...........................................13
CHALLENGES IN THE PRIVATE SECURITY SECTOR .......................................15
Increase in PSIRA annual fees........................................................................................15
Regulatory Challenges .....................................................................................................15
Unregistered and non-compliant ....................................................................................16
CHAPTER THREE ........................................................................................................................17
3.
3.1
3.1.1
3.1.2
3.1.3
3.9.2
3.2
3.3
3.3.1
3.3.2
3.6
3.6.1
3.6.2
3.6.3
3.6.4
3.7
DISCUSSION AND PROPOSALS ................................................................................17
Minimum Wages ..............................................................................................................17
Employee’s views .............................................................................................................18
Employers views ...............................................................................................................19
Bargaining forum agreement ..........................................................................................20
Departmental recommendations ....................................................................................21
Premiums ..........................................................................................................................22
Special Allowance.............................................................................................................23
Bargaining Forum Agreement ........................................................................................23
Departmental recommendations ....................................................................................23
Annual increase ................................................................................................................24
Employee’s views .............................................................................................................25
Employers views ...............................................................................................................25
Bargaining Forum agreement .........................................................................................25
Departmental recommendations ....................................................................................26
Annual bonus....................................................................................................................26
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ECC Private Security Sector Report 2012
3.7.1 Employee’s views .............................................................................................................26
3.7.2 Employers views ...............................................................................................................26
3.7.3 Bargaining Forum Agreement ........................................................................................27
3.7.4 Departmental recommendations ....................................................................................27
3.8 Demarcation .....................................................................................................................27
3.8.1 Employee’s views .............................................................................................................28
3.8.2 Employers views ...............................................................................................................28
3.8.3 Bargaining Forum Agreement ........................................................................................28
3.8.4 Departmental recommendations ....................................................................................29
3.9 Other Conditions..............................................................................................................29
3.9.1 Housing and HIV/AIDS...................................................................................................29
3.9.2 Hours of Work..................................................................................................................29
3.10 Other Issues ......................................................................................................................29
3.10.1 Enforcement and Inspection ...........................................................................................29
3.10.2 Government Departments ...............................................................................................30
3.10.3 Medical Aid.......................................................................................................................30
3.10.4 Transfer Allowance ..........................................................................................................30
3.10.5 Housing Allowance...........................................................................................................30
3.10.6 Departmental recommendations ....................................................................................31
CHAPTER FOUR ...........................................................................................................................32
4
4.1
4.3
4.3
EVALUATION IN TERMS OF ECC CRITERIA .......................................................32
Alleviation of poverty and impact on cost of living ......................................................32
Ability of employers to carry on their business successfully and operation of
small businesses ................................................................................................................33
Impact on current employment and the creation of employment ...............................34
CHAPTER FIVE ............................................................................................................................35
5.
ECC RECOMMENDATIOND.......................................................................................35
5.1. Minimum Wages ..............................................................................................................35
5.2. Premiums ..........................................................................................................................37
5.2.1. Grade D Premiums ..........................................................................................................37
5.2.2. Area 3 Premiums..............................................................................................................37
5.3. Special Allowance.............................................................................................................37
5.4. Night Shift Allowance ......................................................................................................38
The Commission recommended that the night shift allowance should be increased by
R0.50 as stipulated in the National Bargaining Forum agreement. ............................38
5.5. Long Servicer ...................................................................................................................38
5.6. Annual Increase ...............................................................................................................38
5.7. Annual Bonus ...................................................................................................................38
5.8. Demarcation .....................................................................................................................39
5.9. Other Conditions..............................................................................................................39
TABLES
Table 1: Signatories to NBF ......................................................................................................... 6
Table 2: Schedule of Public Hearings: Dates Venues & Attendance ........................................... 9
Table 3: Demarcated Areas in the Private Security Sector, South Africa .................................. 12
Table 4: Number of Security Businesses and Security Officers ................................................. 13
Table 5: Area 4 to Area 3 increase.............................................................................................. 17
Table 6: Satawu Free State minimum wage proposals ............................................................... 18
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ECC Private Security Sector Report 2012
Table 7: Minimum wage proposals NBF .................................................................................... 20
Table 8: Recommended Grade D premiums ............................................................................... 22
Table 9: Recommended Area 3 premiums.................................................................................. 22
Table 10: Recommended special allowance ............................................................................... 23
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ECC Private Security Sector Report 2012
CHAPTER ONE
1.
INTRODUCTION
In accordance with Section 54(3) and (4) of the Basic Conditions of Employment, Act 75 of
1997 (BCEA), the Employment Conditions Commission (ECC) has to present the Minister with
a report on the investigation into the review of minimum wages and conditions of employment
after conducting an investigation. The ECC has concluded its investigation into the Private
Security Sector, South Africa and therefore has pleasure in submitting its recommendations to
the Minister.
1.1.
BACKGROUND TO THIS INVESTIGATION
The Sectoral Determination 6: Private Security Sector, South Africa was published in the
Government Gazette dated 30th November 2001 and provisions in respect of minimum wages
became applicable on 10th December 2001. The last amendment to the determination was
published on 25 August 2009 in Government Notice No: R871 Government Gazette No: 32524
prescribing minimum wages which will lapse on 30 August 2012.
On 11 November 2011 the Minister published a notice announcing the intention to review the
Private Security Sectoral Determination.
The sector has no Bargaining Council but has a forum with a constitution that bargains
collectively on conditions of employment and wages. The parties to this forum are, however,
not representative of the entire industry. Since the promulgation of SD 6, the practice has been
that the parties first negotiate in a formally constituted negotiating forum. The agreement
reached in the bargaining forum then forms the basis of discussion in the ECC process where it
is tested against the criteria as set out in the Basic Conditions of Employment Act (BCEA) such
as:

The ability of employers to carry on their business successfully

The operation of small, medium or micro-enterprises

The cost of living

The alleviation of poverty

Wage differentials and inequality

The impact of current or the creation of employment.
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ECC Private Security Sector Report 2012
The agreement therefore serves as an input document in the investigation process. As in other
sectors, the ECC is always eager to consider as much as possible agreements reached through
voluntary collective bargaining to promote collective bargaining.
Negotiation process
In its inception, the National Bargaining Forum for the Private Security Sector (NBF),
concluded a National Framework Agreement (NFA) which sets out the rules of engagement
between the parties during their negotiations. Such The parties to the NBF have changed during
the past three years, but the main role players remain the same.
Prior to the establishment of the NBF the CCMA as the facilitator of negotiations at the NBF
conducted a census in respect of representation amongst both Labour and Employers. This
Private Security Sector Verification was conducted amongst 18 trade unions and 4 employer
organizations which were signatory to the NBF. The result of the verification process revealed
that Trade Unions, collectively, were having 80,828 paid up members and the employer
caucuses were able to prove a total of 135,020 employees in the employ of their members..
The following table reflects the number of members by each organization who are signatories to
the NBF and the number of seats which organization have on the NBF.
Table 1: Signatories to NBF
Trade union
SATAWU
KAWU
NASUWU
PTAWU
SANSAWF
DUSWO
Membership
Seats
%
South African Transport and Allied Workers 34,510
Union
Kungwini Amalgamated Workers Union
12,482
5
48%
2
17%
National Security and Unqualified Workers
Union
Professional Transport and Allied Workers
Union
South African Security and Allied Workers
Union
Democratic Union of Security Workers
9,539
2
13%
7,031
1
9%
5,691
1
8%
5,210
1
7%
74,463
Employees
12
Seats
100%
%
80,932
7
60%
52,883
4
39%
1,206
1
1%
TOTAL
Employer Organizations
Security
Services
Employers
SSEO
Organisation
South African National Security
SANSEA
Employers Association
COSAPS
Congress of South African Private
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ECC Private Security Sector Report 2012
Security
Totals
135,020
12
100%
All three participating employer organisations were represented at the negotiation table. In
terms of the bargaining framework agreement, a threshold of 5000 members is required for
trade unions to be entitled to a seat at the 12 a-side bargaining table.
Nine non-qualifying trade unions were granted observer status, which does not grant them seats
as they do not have enough representation, however they had fully participated in the process.
The signing or non signing of the NBF agreement by these trade unions has no bearings on the
outcome of the agreement at caucus meetings. They trade unions granted observer status were:
1) South African Private Security Workers Union (SAPSWU)
2) Security Officers Civil Rights and Allied Workers Union (SACRAWU)
3) South African Cleaning Security and Allied Workers Union (SACSAWU)
4) South African Cleaning Security Workers Union (UPSWU)
5) Protectors Workers Union (PROWU)
6) Food, Cleaning and Security Workers Union (FOCSWU)
7) National Democratic Change and Allied Workers Union (NDCAWU)
8) Workers Equality Support of South Africa (WESUSA)
9) Hotel, Commercial Catering and Allied Workers Union of South Africa (HOTELLICA)
10) United Association of South Africa (UASA)
11) Abanqobi Workers Union (AWU)
1.2.
WAGE NEGOTIATIONS IN THE SECTOR
The parties in the Private Security Sector signed an agreement on the 2nd April 2012. The
agreement was signed by three (3) organisation form the employers and eleven (11) from the
trade union who bargained on issues of wages and other conditions of employment. The
bargaining forum meetings were facilitated by two Senior CCMA Commissioners. The
following trade unions did not sign the agreement:
1) South African Transport and Allied Workers Union (SATAWU)
2) Food, Cleaning and Security Workers Union (FOCSWU)
3) Workers Equality Support of South Africa (WESUSA)
4) Hotel, Commercial Catering and Allied Workers Union of South Africa (HOTELLICA)
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ECC Private Security Sector Report 2012
However the South African Transport and Allied Workers Union (SATAWU) forwarded their
submission in relation to the issues of disagreement at the NBF.
In terms of the NFA, the majority of the “eligible” trade unions, representing 7 of the 12 Labour
seats, accepted the agreement, together with the employers block, making the collective
agreement binding on all parties.
The issues which were agreed on were tabled as follows:

the basic salaries for Private Security sector;

Grade D and Area premiums,

Family responsibility leave,

Annual Leave,

Annual bonus,

Special Allowances;

Housing and HIV/AIDS; and

Night shift allowance.
1.3.
TERMS OF REFERENCE
The Department published a notice in the Government Gazette No 34784 of 11th November
2011 under Government Notice No. 981. The notice called upon interested parties to send
written representations to the Department within 30 days of publication of the notice. The terms
of reference for the investigation into the review of minimum wages and conditions of
employment in the Private Security Sector were set out as follows:
‘To review wages and conditions of employment in the Private Security Sector, South Africa.’
1.4.
METHODOLOGY
A four-phased project framework was developed for this investigation, as follows:
1.4.1. PHASE ONE – INFORMATION GATHERING
The purpose of the first phase was to address the administrative aspects of the investigation and
identify areas of focus. The administrative aspects dealt with in this phase included, in
particular, the publication of a notice in the government gazette as required by section 52(3) of
the BCEA, the processes to ensure that the appropriate legislation was complied with in respect
of this investigation.
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ECC Private Security Sector Report 2012
As part of the information gathering process, the Department invited public comments through
a notice published in the Government Gazette No 34784 of 11th November 2011. Interested
parties had 30 days to submit written representations to the ECC. Only the bargaining forum
submitted written representations in response to the notice.
1.4.2.
PHASE TWO – CONSULTATION WITH STAKEHOLDERS
Public hearings were held across nine provinces, and between two to three areas in a province
were visited. Public hearings commenced on 18th April 2012 until 25th May 2012. A total
number of 29 public hearings sessions were held countrywide. When the public hearings
commenced the parties had already signed an agreement and during the public hearings the
signed agreement formed the basis of discussions.
Table 2: Schedule of Public Hearings: Dates Venues & Attendance
Dates
Venue & Address
Total Number of Empoyers
Total Number of Employee’s
Nelspruit
18/04/2012
Orion Hotel
7
12
Ermelo
19/04/2012
Ella De Bruin Hall
6
2
Witbank
20/04/2012
Department of labour
40
28
Johannesburg
16/04/2012
Department of Labour
5
16
Bronkhorstspruit
17/04/2012
Municipality Bronkhorstspruit
3
53
Krugersdorp
18/04/2012
Department of Labour
3
0
Kempton Park
19/04/2012
Kempton Park Labour Centre
1
21
Vereneeging
20/04/2012
Kopanong Hospital
4
18
Upington
25/04/2012
Waterfront Guest Centre
12
13
Kimberley
26/04/2012
Depart of Labour Boardroom
1
7
Rustenburg
24/04/2012
Rusternburg Civic Centre
0
0
Klerksdorp
25/04/2012
Ngwenya Hotel & Conference
8
13
Mafikeng
26/04/2012
Gardern View Lodge
4
15
Cape Town
09/05/2012
Department of Labour
8
2
Mosselbay
10/05/2012
D’Almeida Library Hall
4
11
George
11/05/2012
Department of labour
7
9
Durban
09/05/2012
La’vita
11
10
Richard's Bay
10/05/2012
Imbizo Conference Centre
12
17
Newcastle
11/05/2012
Mojuba Lodge
15
0
Thohoyandou
16/05/2012
Peermont Metcourt Khoroni
16
56
Tzaneen
17/05/2012
Fairview River Lodge
4
23
Polokwane
18/05/2012
Mosate Lodge
14
59
16/05/2012
Department of Labour
20
57
Area
Mpumalanga
Gauteng
Northern Cape
North West
Western Cape
KwaZuluZ Natal
Limpopo
Eastern Cape
Port Elizabeth
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ECC Private Security Sector Report 2012
East London
17/05/2012
Department of Labour
03
24
Umtata
18/05/2012
Savoy Hotel
5
17
Bloemfontein
23/05/2012
Protea Hotel
9
65
Bethlehem
24/05/2012
Frontier Hotel
18
35
Welkom
25/05/2012
Gold Guest and Conference
10
5
Free State
Total
250
588
The hearings thus provided information from a total of 250 employers and 588 employees. It
should further be noted that the representation was both from individual employees and
employers as well as those representing organised business and labour.
After the public hearings the Department received submissions from the following:

SATAWU;

A combined submission from the following employers: Maluti Security, Wulf Alarms
and Cybko;

Department of Labour Inspectors; and

Individual employers and employees.
1.4.3. PHASE THREE – ECC PROCESS
During this stage, the Employment Conditions Commission (ECC) deliberated on the
consolidated report prepared by the Department on the basis of the written submissions
forwarded to the Department and inputs captured during the public hearings.
1.4.4. PHASE FOUR- PUBLICATION OF THE SECTORAL DETERMINATION
AMENDMENT
This phase will see the publication of amendments to the sectoral determination in the
Government Gazette, once approved by the Minister and subsequent awareness-raising.
1.5.
STRUCTURE OF THE REPORT
The report consists of the following chapters:

Chapter 2 of this report outlines the sector profile and current status of the South
African Private Security Sector.

Chapter 3 focuses on the consolidated written submissions, inputs received during
public hearings, and the Departmental proposals.

Chapter 4 will focus on the evaluation in terms of ECC criteria
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ECC Private Security Sector Report 2012

and Chapter 5 focus on the recommendations of the Employment Conditions
Commission (ECC)
11
ECC Private Security Sector Report 2012
CHAPTER TWO
2. DESCRIPTION OF THE SECTOR
The Sectoral Determination (SD 6): Private Security Sector, South Africa was published in the
Government Gazette of 30th November 2001 and provisions in respect of minimum wages
became applicable on 10th December 2001. The wages in this sector were set for a period of
three years, including annual increments, with the first set of amendments to the wages coming
into effect on 13th June 2003. The last set of wage increases were published on 25th August
2009 and will lapse on 31st August 2012. Hence the review of the determination was necessary
to set new minimum wage levels for the period 2012 - 2015.
2.1.
SECTOR DEMARCATION
The current sectoral determination categorizes South Africa into three areas namely Area 1; 2
and 3. The categories in relation to the areas are as follows:
Table 3: Demarcated Areas in the Private Security Sector, South Africa
Area 1
Alberton, Bellville, Benoni, Boksburg, Brakpan, Camperdown, Chatsworth, Durban, Germiston,
Goodwood, Inanda, Johannesburg, Kempton Park, Krugersdorp, Kuils River, Mitchell’s Plain,
Nigel, Oberholzer, Paarl, Pinetown, Port Elizabeth, Pretoria, Randburg, Randfontein,
Roodepoort, Sasolburg, Simon’s Town, Springs, The Cape, Uitenhage, Vanderbijlpark,
Vereeniging, Westonaria, Wonderboom and Wynberg.
Area 2
Bloemfontein, East London, Kimberley, Klerksdorp, Pietermaritzburg Somerset West,
Stellenbosch and Strand.
Area 3
All other areas not mentioned under Area 1 and 2
2.2.
EMPLOYMENT IN THE SECTOR
According to the Private Security Industrial Regulatory Authority (PSIRA) the number of
registered active security businesses has increased from 5491 (2001) to 2836 (2011),
representing a 35.84% increase whilst the number of registered security officers increased from
194 525 to 387 273, representing a 99.09% increase over the same period. The above figures
reveal that there is a steady and consistent increase in most of the categories of security
business and security officers. Table 3 below gives the number of security businesses and
security officers per category.
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ECC Private Security Sector Report 2012
Table 4: Number of Security Businesses and Security Officers
2009
2010
2011
Registered active armed response 2 083
2 721
2836
business
Registered
active
guarding 4 862
5 784
6324
active
security 6 392
7 496
8828
391035
411109
1 070 267
1369765
business
Registered
business
Registered active security officers
Registered
inactive
375 315
security 940 330
officers
Source PSIRA Annual report 2009/2010 & 2010/2011
It is important to note that Cash in Transit guards do not form part of the Security Sector
regulated by the Sectoral Determination.
2.3.
PRIVATE SECURITY GROWTH IN SOUTH AFRICA
Reaching an annual turnover of R50 billion in 2011, from which the largest sector of the
security industry, namely the security guarding segment, has contributed R18 billion. The
Private Security Industry in South Africa is believed to be the largest in the world. The South
African Police Service, who spent roughly R161.5 million in 2009/2010 on private security
services (Sapa1, 2011) contributed to the growth of the private security industry.
Both the number of private security officers and private security companies have increased by
111.30% and 66.7% respectively, since 2001 to 2011, where a total number of 8 828 active
Private Security Companies are registered with PSIRA (Private Security Industry Regulatory
Authority). Moreover, the amount of security guards outnumbers SAPS officers by 2:1. “The
reason for this growing gap is because citizens do not perceive the police as adequate for their
safety needs,” says Lebone, South African Institute of Race Relations.
Thus, by analyzing the above statistics of a growing private security industry, it is of
significance to analyze the main factors that have led to the growth of the Private Security
Industry in South Africa. Firstly, changes in property associations have taken place, due to the
1
South African Press Association
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ECC Private Security Sector Report 2012
growth of mass private property i.e. urbanization, environmental factors and new building
demands related to social controls, and the need to secure these properties, where new
uncertainties have been identified in the proclaimed ‘risk society’ of South Africa. Secondly,
growing trends towards the commoditisation of security have led to individuals purchasing their
own security such as physical security, use of armed response companies and counter
surveillance, and businesses acquiring security services from security companies, such as
security guarding, equipment, surveillance and armed response reaction, as a result of the
state’s perceived inability to guarantee security. Furthermore, the widespread presence of
cooperative systems are on the increase, whereby a community is secured not only by the
police, but also by private security patrols, metro police and neighbourhood-watch
organizations working to secure the same area.
What goes without saying is that violent crime has been the larger precursor in the growth of
the Private Security Industry. While South Africa’s murder rate has decreased, statistics show
that almost 16 000 murders took place within the last year, which is considerably higher than
that in most other parts of the globe2. House and business robberies are also a major concern for
the public. In addition, the role of the media in widely broadcasting violent crime has
influenced the growth of insecurity and fear of crime in the public eye.
The growth of the industry has also been an avenue of employment. The Security Sectoral
Education and Training Authority states that the Private Security Industry employs larger
numbers of workers than either SAPS , Correctional Services, Justice, Defence, Intelligence, or
the Legal Service industry. Growth in the sector can be seen by the increase in the enrolment in
private security training programmes by aspiring security guards.
To conclude, a broadening of the security market has taken place, in which the means to
counteract risks or threats to individual or business security constantly progresses and becomes
more specialized. Mulder articulates that “indirectly, the presence of security equipment,
security guards, and/or vehicles have an influence on the establishment concerned not only in
terms of ensuring safety and averting crime, but also are a visible guarantee that spaces and
individuals are being safeguarded by means of security guarding and patrolling duties.”
2
Beeld Newspaper dated Tuesday 4 October 2011
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ECC Private Security Sector Report 2012
2.4.
CHALLENGES IN THE PRIVATE SECURITY SECTOR
2.4.1 Increase in PSIRA annual fees
A concern for security firms, is that PSIRA (The Private Security Industry Regulatory
Authority) has recently released new regulations which drastically changed the regime of
regulatory fees which are payable by the security service providers and security officers to
PSIRA.
These fees have been increased by approximately 40%, which registered companies are obliged
to pay upfront on an annual basis, and no longer on a monthly basis, as published on The Skills
Portal. April 2012 marked the beginning of the Annual Fee Cycle. A Once-off fee of R84.00
will be deducted from each Security Officer employed and paid over to PSIRA on their behalf
by respective employers on or before 03 May 2012 while the employers contribution has
increased from R0.70 per employee per month to R7.00 per employee per month The next
Annual Fee will be payable by end of April 2013. These regulations are not only in complete
contrast with the government policy on the support of small and medium businesses in South
Africa, but also impact on larger security companies. A reason for the increase in these fees
could be that PSIRA is not funded by government and driven on the revenue derived from
security guards and companies levies.
2.4.2 Regulatory Challenges
PSIRA, is one of the most significant and authoritative protectors of the industry. The low
barriers to entry into the industry are a challenge. De Witt (2011)
3
articulates that there is a
lack of co-ordination between regulatory departments and inspectors and that the regulatory
aspects are often described too vaguely, rendering the implementation of these regulations as
weak and deficient. Furthermore, the Private Security Chamber Chairperson, Anna Maoko,
believes that the ratio is 95% to 5% in favour of private institutions, results in employers
believing that higher success can be achieved through on-the-job training. This is an indication
of the dissatisfaction of the quality of training being provided by the training institutions.
Regular demands for bribes are at the highest levels of the industry, from both clients and other
role players. Furthermore, De Witt is of opinion that Regulatory bodies need to act as
arbitrators in the contract process.
3
Alex de Witt (Omega Risk Solutions)
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ECC Private Security Sector Report 2012
2.4.3 Unregistered and non-compliant
Although many security companies are actively registered with PSIRA, there is a concern
regarding the number of unregistered and non-compliant security businesses that do not pay the
minimum wage to their workers, and provide services that are below standard.
2.4.4 Non South African Security Official
It was found that the majority of these non compliant companies are using foreign security
officials without relevant security training or PSIRA certificates. These foreign security
officials are then paid lower rates as compared to those prescribed by the Sectoral
Determination. PSIRA’s regulations state that only South African Identity Document holders
may be employed by registered security companies. It was recently discovered that non South
African’s are recruited by Private Security companies in the booming security industry.
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ECC Private Security Sector Report 2012
CHAPTER THREE
The focus for the investigation, in line with the terms of reference, was to review minimum
wages, and conditions of employment in the Private Security Sector.
This chapter provides the current dispensation in the sectoral determination around minimum
wages and other related conditions of employment. In addition, it also deals with the inputs
from both employer and employees received during the public hearings, written inputs
submitted to the Department, proposals by the Department and recommendations of the
Commission.
3.
DISCUSSION AND PROPOSALS
3.1 Minimum Wages
The current wages in this sector were set for a three year period. The current minimum wage
mechanism will lapse on the 31 August 2012 and therefore a new wage dispensation should be
in place by 01 September 2012. The current sectoral determination required Grade E security
officers to be incorporated into Grade D during 2010 and further that Area 4 be phased out in
2010.
Table 5: Area 4 to Area 3 increase
Area 4
Area 3
1 September 2010
1 September 2011
to
to
31 August 2011
31 August 2012
Grades Hourly Monthly Hourly Monthly
A
R12.98 R2701
R14.59 R3005
B
R11.23 R2337
R13.05 R2714
C
R9.48 R1973
R10.75 R2235
D
R8.79 R1828
R10.06 R2093
E
2009 - 2010
R7.89 R1641
2010 – 2011
R8.79 R1828
Increase Percentage
%
12.36%
16.13%
13.38%
14.50%
%
11.40%
The above table indicates the percentage increases experienced when Area 4 was abolished in
all grades ranging from 12.36% to 14.50% while in terms of abolishing Grade E there was an
increase percentage of 11.40%.indicate a combined % during the year in which area4 was
phased out
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ECC Private Security Sector Report 2012
3.1.1 Employee’s views
During the public hearings across the country the majority of the employees proposed an
increase of 8%. They also concur with the current system of a percentage increase for the
lowest category and a rand value increase for the other grades applied in addressing the issues
of increases. Three different proposals were put forward during the Johannesburg public
hearings. The first proposal of a R500 increase to the current R2 093 (Grade D) minimum wage
which amounts to an increase of 24%. Secondly an increase of 11% across the board to the
current minimum wage. Thirdly a minimum wage of R3500 for Grade D security officers,
which amounts to an increase of approximately 67%. The employee’s motivation on the above
mentioned proposals based on the following economic factors:

increased cost of living;

transport price increases;

rental increases; and

escalating food prices.
The employees also indicated that the current low level of the minimum wages is the cause of
security employee’s being debt-ridden. They further indicated that large numbers of security
officers are blacklisted and they resort to making loans from loan sharks due to the fact that
banks cannot offer them loans.
In Vereeniging employees opposed the utilization of the CPI to determine wage increases. They
argued that CPI does not address their economic situation. They further proposed that the
increase should be based on actual rand value. They indicated that a large portion of their wages
is spent on food, transport and rent. They also indicated that it should be noted that most of
security employees use two or three taxi’s to reach their workplace as most of these workplaces
are situated in industrial areas.
SATAWU in Nelspruit raised concerns about the current mechanism of negotiation in the NBF
as they alleged that an agreement that binds them is signed without them agreeing on other
issues. In line with the negotiating framework agreed to by the parties, they however supported
the increases as outlined in the agreement signed by the bargaining forum. In the Free State
province, SATAWU however disagreed on the wage proposal signed by the Bargaining Forum
and submitted the following wage proposals:
Table 6: Satawu Free State minimum wage proposals
Grades
Area 2
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ECC Private Security Sector Report 2012
Grade D
Grade C
Grade B
Grade A
R13.46 per hour
R15.38 per hour
R17.30 per hour
R18.26 per hour
Employees in other areas proposed an increase ranging between R3500.00 and R5000.00 per
month for Grade D. They indicated that private security officers protect properties worth of
millions hence they suggested an increase of a 14%. They indicated that their proposal is
informed by the value of properties they are protecting and that their lives are at risk since
criminals tend to target areas where there are expensive.
SATAWU, in their national submission, indicated that wage increase of 8,5% across the board
for the 1st year is too little in the light of the fact that security officers are paid on an hourly rate
and the increase does not affect the total cost to the company which means the total wage bill of
security service providers is less than 5%. A reference was made to Private Security Regulation
Authority (PSIRA) contract pricing structure for the period 1st September 2011 to 31st August
2012. SATAWU proposed an increase of 9,5% across the board for a period of 3 years which
they believe will be beneficial to all employees in the private security sector.
3.1.2
Employers views
Employers believe that the issue of increasing the minimum wage should be tackled with
caution to avoid job losses as most of the security companies in the areas falling under Area 3
have been subjected to huge wage bill increases which was caused by absorption of the
elimination of grade E security offices and the incorporation of area 4 into area 3, which
resulted in massive cost to business increases as compared to the other areas. The majority of
employers in the sector who attended the public hearings proposed that new wages should be
determined by utilizing CPI as it is the most appropriate tool. They further indicated that during
year 2 and 3, minimum wages should be increased by CPI plus 1 or 2%. Employers argued that
their inputs in relation to the minimum wage levels are informed by the following factors which
impact negatively on the ability of employers to conduct business successfully:

Increase on PSIRA rates;

Competing with unregistered and non-compliant companies in the market; and

Increased risks levels of operating in this industry.
Furthermore employers indicated that they do not get the annual increase as legislated in the
sectoral determination from their clients.
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ECC Private Security Sector Report 2012
Employers in some areas also proposed a CPI related increase to the current minimum wage.
Employers mentioned that they are subjected to ever increasing overhead costs of business such
as fuel increases and other costs, which impedes on the ability of employers to conduct their
businesses successfully. Furthermore they indicated that majority of employers in the sector
provide free transport to employees, which is an additional cost to business. Employers
vehemently opposed a double digit increase put forward by employees and indicated that such
an increase would lead to an inability by the employers to remain profitable, and would
therefore result in unemployment.
Employers raised concerns that employees do not
understand how the private security sector operates hence it is easy for them to demand huge
increases.
The employers across the country were also concerned about what they call unrealistic wage
demands made by employees which may have a negative effect on clients, who will either
refuse to pay this, or consider mechanization to replace the security guards, which could lead to
job losses. They added that in order to circumvent this problem, security companies should
focus on improving training and development to up-skill workers.
Employers in Bethlehem representing Maluti Security, Wulf Alarms and Cybko Security in
their submission indicated that all consumers in South Africa experiencing the ongoing
increases in food, petrol, electricity, taxes etc; they consider it reasonable to implement annual
increases accordingly. They however felt that the annual increases should stick to the CPI as
published annually by Statistics South Africa, with no added percentage increase on top of CPI.
Considering all the other increases on allowances as well as the proposed additional allowance
for Grade D security guards referred to as “Grade D Premium”, the total increase will then
exceed the average wage increases across different sectors.
3.1.3 Bargaining forum agreement
Parties at the bargaining forum agreed that the monthly minimum salaries of all Security
Officers in Area 1 as contained in Sectoral Determination 6 should be increased as outlined in
the table below:
Table 7: Minimum wage proposals NBF
Grade
Year 1
Rand value
%
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ECC Private Security Sector Report 2012
A
R214.00
5.85%
B
R214.00
6.66%
C
R214.00
7.95%
D
R214.00
8.50%
In respect of all other Areas and categories of employment, the parties agreed as follows:
a) The equivalent percentage value of the increases as set out above should apply to
security officers of the grades in all other Areas in each year of operation of the sectoral
determination.
b) The equivalent percentage value of the increases as set out above in respect of security
officers Grade D shall apply to all categories of employment not mentioned in each
respective year of operation of the sectoral determination.
3.9.2 Departmental recommendations
The Department would like to point out that during the public hearings stakeholders in the
private security sector understand the role of the bargaining forum and also that the bargaining
forum play important role.
The Department is takes cognisance of the challenges already facing the sector due to the
process of phasing out area 4 and Grade E security officers in a short space of time. This
therefore means that determining the level of the new wage should consider the economic
situation especially for those employers who were in past falling under area 4. Taking into
consideration all the agreed increases on the different allowances as well as the increase on the
minimum wage will this result to an increase of approximately 10, 65% . This basic calculation
based on salary of a Grade D security officer as proposed in the agreement:
Minimum Wage:
R2093 + 8.5%
= R2270.91
Grade D premium:
+ R25.00 (1.19%)
= R2295.91
Area 3 premium:
+ R20.00 (0.96%)
= R2315.91
Total % increase
= 10.65%
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ECC Private Security Sector Report 2012
Furthermore, in promoting collective bargaining spirit within the sector, the Department
supports the new minimum wage levels and wage increases for subsequent years as agreed to in
the negotiating forum. It should also be noted that the private security sector is moving towards
the establishment of a national bargaining council. This therefore means that the sectoral
determination will cease to operate once the bargaining council is in place.
3.2 Premiums
3.2.1 Grade D premiums
In terms of the signed agreement Grade D premium is aimed at reducing the gap between Grade
D and Grade C.
3.2.1.1 Bargaining Forum agreement
The parties agreed that all security officers in all areas should receive Grade D premium, which
should be paid as an additional allowance. The parties agreed that Grade D premium should be
paid as follows:
Table 8: Recommended Grade D premiums
Year 1
Year 2
Year 3
R25 per month
R50 per month
R75 per month
3.2.2 Area 3 premium
According to the agreement Area 3 premium is aimed at reducing the minimum wage gap
between Area 3 and Area 2 in the future.
3.2.2.1 Bargaining Forum agreement
The parties agreed that all security officers in Area 3 should receive Area 3 premium, which
should be paid as an additional allowance. The parties agreed that Area 3 premium should be
paid as follows:
Table 9: Recommended Area 3 premiums
Year 1
Year 2
Year 3
R20 per month
R40 per month
R60 per month
3.2.3 Departmental recommendations
The Department support the proposal made by the Bargaining Forum as it is aimed at
incorporating Area 3 into Area 2 and also to address the issue of narrowing wage gap between
Grade D and C.
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ECC Private Security Sector Report 2012
3.3
Special Allowance
The current special allowance is R5.50 per shift for the following employees:
a) Mobile Supervisors
b) Armed Security Officer
c) Armed Response Officer
d) National Key Point Officer
e) Control Centre Operator
3.3.1 Bargaining Forum Agreement
The parties agreed to adjust the special allowances referred to in Clause 6 of the Sectoral
Determination as set out below:
Table 10: Recommended special allowance
Category
Shift allowance Shift allowance Shift allowance
Year 1
Year 2
Year 3
Mobile Supervisors
R5.50
R6.50
R7.00
Armed Security Officer
R5.50
R6.50
R7.00
National Key Points Officer R5.50
R6.50
R7.00
Control Centre Operator
R6.50
R7.00
R5.50
3.3.2 Departmental recommendations
The Department support the signed agreement for special allowances which in essence reflects
an additional R1.00 increase for the second year and 50c in the third year.
3.4 Night Shift Allowance
The night shift is between the hours of 18:00 and 6:00 the next day and the employee who is
working between those hours would be entitled to be paid night shift allowance. Currently the
night shift allowance is R5.00 per shift.
3.4.1 Employees views
In a written submission from SATAWU, it was alleged that 80% of the workforce in the
Security sector work at night and consideration should be given to a premium increase for night
shift allowance as this should not be treated as a normal activity. They further indicated that
employers have a moral obligation to take this aspect very seriously. Although SATAWU was
sceptical to agree with the agreement signed in relation to this matter, they however indicated
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ECC Private Security Sector Report 2012
that the 50c increase to the current R5.00 night shift allowance which employers agreed to at
the bargaining forum should be implemented as from 1 September 2012.
3.4.2 Bargaining Forum agreement
The parties agree that the night shift allowance shall increase to R5.50 with effect from the third
year of agreement.
3.4.3 Departmental recommendations
The Department support the agreement signed at the bargaining forum in relation to the
additional of 50c on the night shift allowance rate.
3.5 Long Service
Currently security officer is entitled to service benefits upon completion of a given
uninterrupted service with the same employer.
a) R500.00 after 5 years
b) R1000.00 after 10 years
c) R5000.00 after 20 years
3.5.1 Employees views
SATAWU in Free State proposed that service benefits should be calculated as follows:
a) R1500.00 for 5 years
b) R2500.00 for 10 years
c) R3000.00 for 15 years
d) R4000.00 for 20 years
e) R5000.00 for 25 years
3.5.2 Departmental recommendations
The Department propose that the status quo remain as this will put more pressure on the
employer’s side as they are expected to pay the increase in minimum wages and proposed
premiums which will result in huge costs.
3.6 Annual increase
The sectoral determination for Private Security sector currently prescribes wages for a period of
three years. During the second year an increase of 7.25% to Grade D in all areas was
prescribed, whilst Grade A to C was increased by Grade D Rand value. In the third year Grade
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ECC Private Security Sector Report 2012
D was increased by 7% whilst Grade A to C was increased by Grade D Rand value. The
following table reflects the increment for year 2 and 3 for area 3:
Table 11: Increment for Year 2 and 3 for Area 3
Year 2 (2010-2011)
Year 3 (2011-2012)
Grades
Hourly Rate
Rand or %
Hourly rate
Rand or %
A
R13.93
R0.64
R14.59
R0.65
B
R12.39
R0.64
R13.05
R0.65
C
R10.10
R0.64
R10.75
R0.65
D
R9.41
7.25%
R10.06
7%
3.6.1 Employee’s views
There were diverse views on the issue of annual increases among the employees during the
hearings. While the majority concur with the idea of three years term, some employees think
that the idea of determining wages for a longer duration does not do justice to employees as the
level of CPI fluctuates. They therefore proposed that in dealing with the situation minimum
wages should be reviewed annually. There was however a majority who supported the
agreement of the bargaining forum in that it also attempts to address the wage gaps between the
areas and grades. SATAWU proposed an increase of 9.5% across the board for year 2 and 3 as
they believe that it will be beneficial all categories of employees in the sector.
3.6.2 Employers views
Employers indicated that the appropriate measure to determine annual increases is the CPI as it
projects the economic standing of the country at a particular period. They further pointed out
that the current approach should be utilized as it takes into consideration the CPI. The majority
of employers supported the agreement signed. They however requested the Department to also
inform their clients of the requirements of the sectoral determination especially in relation to
wage increases.
3.6.3 Bargaining Forum agreement
The parties agreed that the annual minimum wages should be increased as follow for year 2 and
3:
Table 12: Agreed annual wage increases
Grade
Year 1
A
Rand
R214
B
R214
Year 2
Year 3
%
5.85%
Grade D Rand value
Grade D Rand value
6.66%
Grade D Rand value
Grade D Rand value
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ECC Private Security Sector Report 2012
C
R214
7.95%
Grade D Rand value
D
R214
8.5%
Inflation rate plus 2 %( Min Inflation rate plus 2% (Min 7% or
7.25% 0r Max 8%)
Grade D Rand value
Max 8%)
Reference to CPI should mean the annualised CPI as published by Statistics South Africa as at
30 June 2013 for the purpose of calculating increases in the second year of this determination;
and as at 30 June 2014 for the purpose of calculating increases in the third year of this
determination.
3.6.4 Departmental recommendations
The Department support the agreement signed at the bargaining forum in relation to
determining annual wage increases.
3.7 Annual bonus
The current sectoral determination prescribes annual bonus which employees becomes entitled
to after completion of the 12 months of service with same employer. In the event that the
employee’s contract of employment ends before the end of any subsequent 12 month cycle with
the same employer for any reason other than resignation or dismissal for misconduct, poor
performance not related to incapacity for ill health, employee must receive a prorated share of
the bonus for the year that he/she has worked.
3.7.1 Employee’s views
On this issue the majority of employees including SATAWU proposed that the current bonus
provision should be replaced by the entitlement to a 13th cheque.
3.7.2 Employers views
Employers believe that the current calculation of bonus as prescribed is fair and the system will
motivate employees to work hard to get what is due to them. They believe that the employee
should get what they deserve as bonus is actually earned form the hard work done and not on
the bases that you were present at work. Employers argued that an increase in the bonus will
mean a further increase in minimum wages. Employers further indicated that in actual fact
bonus should not be possibly regulated due to the fact that this comes as an incentive for well
done job and should be then left for the employer to decide. Employers in Bethlehem proposed
that the status quo should remain the same on the issue of bonus.
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ECC Private Security Sector Report 2012
3.7.3 Bargaining Forum Agreement
The parties at the bargaining forum agreed that the current bonus provision should be changed
to reflect that an employer should pay every security officer, for each month that the employee
was paid or entitled to be paid in respect of each completed 12 months of service with such
employer, an annual bonus, calculate as follows:
A – (B X C)
12
A
=
Security officer’s ordinary salary
B
=
Security officer’s hourly equivalent rate of pay
C
=
The number of hours worked short due to absenteeism
Provided that –
(i)
only unauthorised hours of absence should be used in determining the figure “C” in the
above formula.
o
any period of approved absence, including but not limited to, annual leave, sick
leave, maternity leave, study leave, family responsibility leave and protected
industrial action shall not be used to reduce the bonus payable in terms of this
clause, and
o
any employee who is scheduled to perform duties as a spare and is not utilised for
that shift should suffer no detriment for the duration of the shift in the
accumulation of his/her annual bonus.
The annual bonus should be paid on the anniversary of the security officer’s date of
employment with the employer unless the employer and a representative trade union and/or the
security officer mutually agree in writing upon another date.
3.7.4 Departmental recommendations
The Department support the agreement signed at the bargaining forum with regard to the issue
of bonus calculation.
3.8 Demarcation
Currently the sector is demarcated into three areas namely; area 1, area 2 and area 3 as
discussed in chapter 2 above. The current demarcation is in accordance with magisterial
districts, and the applicable minimum wage is determined by area where security officer works.
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ECC Private Security Sector Report 2012
3.8.1 Employee’s views
During the public hearings employees in all provinces proposed that there should be a way to
phase out the three tier system and introduce single wage across the country. Area 3 and Area 2
should be phased out and remain with a single area which will prescribe a national minimum
wage for the sector. Employees indicated that a single wage will assist in dealing with the
following challenges which employees are faced with:
a) Unfair treatment by the employers, and
b) Exploitation of the workers.
In addition they argued that it is unfair and unconstitutional that employees employed by the
employer but working in different areas, at the same level, doing same job are remunerated
differently. SATAWU proposed that the current demarcation model should be phased out as
some of the areas do not fall under the magisterial district due to the current model of
demarcation which focuses on the municipalities and not magisterial districts.
SATAWU also proposed that the current gap between the areas should be phased out
completely. SATAWU believe that move to phasing out of Areas will bring parity in the sector.
They further indicated that the phasing out can be dealt with by adding a premium of R35.00
for the 1st year, R70.00 in the 2nd year and R105.00 in the 3rd, which should be paid with effect
from the 1st September 2012. SATAWU would like that to be completely by 2015.
3.8.2 Employers views
The majority of the employers in the sector concur with the idea that status quo should remain.
They therefore proposed that the current areas should be retained for now. Although majority
concurred with the system in place to phase out areas there are those employers mostly located
in area 3 concerned about this move. Employers in Welkom indicated that with lots of mining
activities closed in their area it is difficult to operate productive and incorporating them with
Area 1 will be difficult for them.
3.8.3 Bargaining Forum Agreement
The parties agreed to retain the current demarcation while putting in place a mechanism to deal
with Phasing out Area 3. The parties agreed that for now the sector should carry on with three
Areas.
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ECC Private Security Sector Report 2012
3.8.4 Departmental recommendations
The Department supports the agreement signed in relation to maintaining the current status on
the demarcation. This is further informed by the fact that the sector will soon establish a
bargaining council and this matter should be dealt with at that stage.
3.9 Other Conditions
3.9.1 Housing and HIV/AIDS
The parties agreed to establish a task team (comprising representatives of Trade Unions and
Employer Organisations) to investigate and produce a report to the National Bargaining Forum
on initiatives that can be implemented jointly by the Parties insofar as the manner in which the
interests of workers in the Private Security Sector relating to Housing and HIV/Aids may be
addressed. The parties agreed that the National Bargaining Forum will establish terms of
reference and time frames for the task team.
3.9.2 Hours of Work
In the Kempton Park hearing, employees raised the issue of hours of work. They stated that in
2006 agreement was reached in principle that hours would be reduced to 8 hours per day, and
that a task team would be established to find ways to achieve this. They stated that no progress
has been made. The motivation in favour of 8 hour shifts was that it is impossible to concentrate
for 12 hours, and that many workers are dismissed for sleeping on duty. They referred to the
number of sleeping dismissal cases referred to the CCMA. They also mentioned that a number
of companies, including the large employer G4, already work on 8 hour shift. We need to
discuss hours – currently the Sectoral Determination limits hours to 48 hours per week. This is
4 x 12 hour shifts, or 6 x 8 hour shifts. There is no reason why eight hour shifts cannot be
legislated at very little cost to the employers, and no loss of earnings to the employees. The
only additional cost would be some instances of additional transport costs, but this would not be
the case for all employers.
3.10 Other Issues
3.10.1 Enforcement and Inspection
Employees complain about the issue of employers not complying with the sectoral
determination. They even indicated that the SD is failing people as well as the Department.
They also indicated that before the SD was promulgated, they were living a happy life because
they used to earn more than they are earning now. They said their sector was not supposed to be
29
ECC Private Security Sector Report 2012
deemed vulnerable. They also raised a concern about the government’s privatisation of the
Private Security sector. Some employees are still employed by government and therefore still
have personal salary numbers PERSAL, whereas some do not. This continues to create
confusion in the sector. The minimum wage is becoming the maximum wage as employers use
this as a yardstick which government proposes Private Security sector workers should be paid.
Another challenge is that the companies are busy retrenching those people with PERSAL
numbers as they apparently earn more than the minimum wage.
3.10.2 Government Departments
Parties in the sector they are concerned about the way government Departments issue security
service tenders. Most of the Government Department they undermine the companies who are
comply with the law and award tenders to those fly by night and they get away with that. Many
security companies working for Government Departments exploit employees by posting one
security officer where four should be posted, and by not contribution to UIF. To make matters
worse, some of the contracted companies are owned by Government Officials. An attempt was
made in order to expose those companies wherein list was submitted to the PSIRA and nothing
happened to address that matter. A stakeholder raised the issue of contracting in of security
services by some government departments. The employer argued that the government should
ask advice from previous service providers, and that government should ensure that they
employ the workers from the service providers.
3.10.3 Medical Aid
This issue was raised by employees in Kempton Park. An employer argued in response that the
NHI is coming soon and that should be the answer.
3.10.4 Transfer Allowance
A proposal for an increase in the allowance and a reduction in the radius was made by
employees in the Bloemfontein hearing.
3.10.5 Housing Allowance
In Kempton Park employees indicated that the issue of housing should be addressed in the
sector as some employees does not qualify for RDP houses and bonds. They further stated that
the situation is unbearable where these security officers are leaving as they relay only on
renting room in the community.
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ECC Private Security Sector Report 2012
3.10.6 Departmental recommendations
The Department is of the view that other issues should be given a through investigation due to
the fact that this issue were not properly consulted on hence it would therefore be unfair for the
Minister to impose such conditions without having conducted the normal consultation process.
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ECC Private Security Sector Report 2012
CHAPTER FOUR
4
EVALUATION IN TERMS OF ECC CRITERIA
4.1 Alleviation of poverty and impact on cost of living
The Private Security sector is one of those sectors that can be classified as sector
accommodating the most underprivileged citizen of the country. Many of the employees in this
sector come from the informal settlements and poor families. It’s quite crucial that when
dealing with this sector the focus should be on the issue of poverty. In most cases the prescribed
minimum wages in the sector become what employees are getting in the sector.
The income earned from employment will be important, particularly since the aim is to reduce
poverty and tackle the issue of cost of living. This requires, not only the creation of
employment, but also raising income earned from work. In other words, some path is needed
that would create jobs and also enable real wage growth in a way that is supportive of long term
economic expansion.
No matter how successful employment policy is, it is quite certain that severe unemployment
and under-employment will persist. The problem has simply become too big for market-based
solutions to solve the problem within the next 10 to 20 years. The ‘problem’ includes both
severe unemployment and very low levels of remuneration from market-based employment.
Income and expenditure in South Africa continue to be distributed in a highly unequal manner.
Annual household income and expenditure continue to vary by population group, sex and
province, and within province, by urban and non-urban environments. African female headed
households and households in non-urban areas remain the poorest. African households
generally tend to be the least affluent, followed by coloured and Indian households, while the
most affluent households still tend to be those headed by white people, particularly men.
In South Africa, earnings from employment and self-employment are low relative to the cost of
living. The Labour Force Survey shows that about 65% of all workers earned less than R2500
per month, and 39% earned less than R1000 per month. Low earners are not only found in the
informal sector: just over half of formal sector workers earned less than R2500 per month. Low
earners in the formal sector are not only found in low level jobs: about two-thirds of craft
workers and plant and machinery operators earned R2500 per month or less. Grade D
employees in the Private Security sector earn way below R2500 per month. What does this
mean for poverty? There is no official poverty line, but the National Treasury recently released
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ECC Private Security Sector Report 2012
a discussion paper suggesting that it might initially be set at the equivalent of R430 per person
per month in 2006 Rand. About 50% of the population would fall below this level. What if the
unemployment problem were virtually resolved and fell from about 25% to 13% to 6.5%? Most
of us assume that this would dig deeply into the poverty problem.
Insofar as current minimum wages in the sector don’t sufficiently contribute to some minimum
livelihood; it would be the job of the state to address this. Some balance is needed that does not
create a disincentive to employ, but that also enables working people to assemble an acceptable
standard of living.
4.3 Ability of employers to carry on their business successfully and operation of small
businesses
It has always been a challenge for the Private Security sector to operate effectively under this
circumstance they are facing now. A concern for security firms, is that PSIRA (The Private
Security Industry Regulatory Authority) has recently released new regulations which drastically
change the regime of regulatory fees which are payable by the security service providers and
security officers to PSIRA. These fees have been increased by approximately 40%, which
registered companies are obliged to pay upfront on an annual basis, and no longer on a monthly
basis, as published on The Skills Portal. These regulations are not only in complete contrast
with the government policy on the support of small and medium businesses in South Africa, but
also impact on larger security companies.
A reason for the increase in these fees could be that PSIRA is not funded by government and
driven on the revenue derived from security guards and companies’ levies. “Government will
be taking responsibility for regulation i.e. they will be funding regulation”, says PSIRA
director, Manabela Chauke. Diavastos, Group 4 Securicor HR Director and SIA executive
committee member is of opinion that security guards, who already are earning a minimum
wage, should not be contributing to the regulation of the industry out of their own pockets.
Furthermore, Police minister Mthethwa states that should the government fund this regulatory
body, PSIRA’s service delivery will improve, recruitment of more inspectors will drive
compliance monitoring in the industry, and better information and communication technologies
infrastructure
will
assist
with
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ECC Private Security Sector Report 2012
compliance.
It emerged during the public hearings that most of the complying employers in the sector are
pushed out market due to the escalating cost of operation, while non compliant companies
survive. This fly by night companies grab most of government tenders for the fact that they can
bid lower and after winning the tender they exploit employees by paying them lesser rate than
what is prescribed in terms of the law. During the public hearings, the department advised and
emphasized the need to consider the sectoral determination when submitting the tender
documents. Considering the level of wages in the sector, the exclusion of new and small
business from paying the minimum wages is not recommended.
4.3 Impact on current employment and the creation of employment
South Africa's private security industry is one of the largest in the world, providing large
numbers of semi skilled jobs in the country. This is often attributed to the country's former high
levels of crime or to a lack of public funds from Parliament in the Central Yearly State Budget
Allocated towards the South African Police Service (SAPS). However, due to the success of the
2010 FIFA Football World Cup, watched by over a billion international television viewers from
around the globe, and reported on widely in the international printed press, public confidence
levels in both the SAPS and in private security companies have improved.
Due to a widespread lack of compliance with registration requirements, it is difficult to
determine the number of workers in the industry. About 12000 applications for registration by
both Companies and Individuals due to reasons such as previous criminal activities were turned
down between 1 April 2010 and 31 March 2011, the last financial year. According to the last
year report as tabled in Parliament since 2001 the amount of Registered Companies has
increased by 61 percent and the amount of Registers Security Officers by 111 percent.
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ECC Private Security Sector Report 2012
CHAPTER FIVE
5.
ECC RECOMMENDATIOND
5.1. Minimum Wages
The ECC recommends and support the agreement reached by the parties regarding new wage
levels and wage increases. The minimum wages increase for security officers grade D and all
other categories in all areas should be increased by 8.5% while the increase for all higher grades
or levels for all categories will be calculated by adding the rand value of the entry levels
applicable to each category to the year 1 salary levels for all such higher grades or levels.
The tables below reflect the new wages tables:
Monthly
R5,001
Hourly
R25.65
During the first year of experience
R2,491
R12.78
During the second year of experience
R2,540
R13.03
Thereafter
R2,585
R13.26
During the first year of experience
R2,721
R13.95
During the second year of experience
R2,916
R14.95
During the third year of experience
Thereafter
R3,092
R3,283
R15.86
R16.84
Light motor vehicle
R2,622
R13.45
Medium motor vehicle
Heavy motor vehicle
R2,841
R2,985
R14.57
R15.31
During the first 6 months of employment
R2,041
R10.47
Thereafter
R2,119
R10.87
R2903
R14.89
Grade A
R3,872
R18.62
Grade B
R3,425
R16.47
Grade C
R2,905
R13.97
Grade D and E
R2,733
R13.14
R2,519
R12.92
Artisan
Clerical Assistant
Clerk
Driver of a -
General Worker
Handyman
Security Officer
Employees not elsewhere specified including car guards
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ECC Private Security Sector Report 2012
Previous minimum wage + CPI + 2% OR
Min 7%, Max 80%
Table 1
Area 1
Previous minimum wage + CPI + 2% OR
Min 7.25%, Max 80%
In The Magisterial district of:
Alberton, Bellville, Benoni, Boksburg, Brakpan, Camperdown,
Chatsworth, Durban, Germiston, Goodwood, Inanda, Johannesburg,
Kempton Park, Krugersdorp, Kuils River, Mitchell’s Plain, Nigel,
Oberholzer, Paarl, Pinetown, Port Elizabeth, Pretoria, Randburg,
Randfontein, Roodepoort, Sasolburg, Simon’s Town, Springs, The Cape,
Uitenhage, Vanderbijlpark, Vereeniging, Westonaria, Wonderboom and
Wynberg.
1 September 2012
1 September 2013
3 September 2014
To
To
To
31 August 2013
31 August 2014
31 August 2015
Hourly
R23.35
During the first year of experience
R2,285
R11.72
During the second year of experience
R2,322
R11.91
Thereafter
R2,375
R12.18
During the first year of experience
R2,170
R11.13
During the second year of experience
R2,389
R12.25
During the third year of experience
Thereafter
R2,502
R2,675
R12.83
R13.72
Driver of a -
Light motor vehicle
R2,431
R12.47
Medium motor vehicle
Heavy motor vehicle
R2,626
R2,753
R13.47
R14.12
General Worker
During the first 6 months of employment
R1,872
R9.60
Thereafter
R1,954
R10.02
R2,160
R11.08
Grade A
R3,540
R17.02
Grade B
R3,126
R15.03
Grade C
Grade D and E
R2,673
R2,500
R12.85
R12.02
R2,316
R11.88
Handyman
Security Officer
Employees not elsewhere specified including car guards
Table 3
Area 3
All other Areas not specified else where
1 September 2012
1 September 2013
3 September 2014
To
To
To
31 August 2013
31 August 2014
31 August 2015
Monthly
R4,366
Hourly
R22.39
During the first year of experience
R2,067
R10.60
During the second year of experience
R2,104
R10.79
Thereafter
R2,156
R11.05
During the first year of experience
R2,291
R11.75
During the second year of experience
R2,455
R12.59
During the third year of experience
Thereafter
R2,633
R2,792
R13.50
R14.32
Light motor vehicle
R2,201
R11.29
Medium motor vehicle
Heavy motor vehicle
R2,398
R2,524
R12.30
R12.94
During the first 6 months of employment
R1,679
R8.61
Thereafter
R2,524
R9.00
Artisan
Clerical Assistant
Clerk
Driver of a -
General Worker
R2,476
R12.70
Grade A
R3,213
R15.45
Grade B
R2,892
R13.90
Grade C
R2,417
R11.61
Grade D and E
R2,271
R10.92
R2,092
R10.73
Handyman
Security Officer
Employees not elsewhere specified including car guards
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ECC Private Security Sector Report 2012
Previous minimum wage + CPI + 2% OR
Min 7%, Max 80%
Clerk
Previous minimum wage + CPI + 2% OR
Min 7.25%, Max 80%
Clerical Assistant
Previous minimum wage + CPI + 2% OR
Min 7%, Max 80%
Monthly
R4,553
Artisan
Previous minimum wage + CPI + 2% OR
Min 7.25%, Max 80%
In The Magisterial district of:
Bloemfontein, East London, Kimberley, Klerksdorp, Pietermaritzburg,
Somerset West, Stellenbosch and Strand.
1 September 2012
1 September 2013
3 September 2014
To
To
To
31 August 2013
31 August 2014
31 August 2015
Table 2
Area 2
5.2. Premiums
5.2.1. Grade D Premiums
The Commission recommended that Grade D premium should be implemented as stipulated in
the agreement. The agreement stipulates as follow:
Year 1
Year 2
Year 3
R25 per month
R50 per month
R75 per month
Grade D premium was introduced to ensure that the wage gaps between Grade D and C is
reduced.
5.2.2. Area 3 Premiums
The ECC recommended that Area 3 premium should be implemented as agreed in the
Bargaining Forum agreement. The agreement tabled as follows:
Year 1
Year 2
Year 3
R20 per month
R40 per month
R60 per month
Area 3 premium is introduce to try and close the gap between Area 2 minimum wages and Area
3 minimum wages.
5.3.
Special Allowance
The Commission recommended that the special allowance should be increase the manner is
tabled in the signed agreement by the parties. The agreement tabled as follows:
Category
Shift allowance Shift allowance Shift allowance
Year 1
Year 2
Year 3
Mobile Supervisors
R5.50
R6.50
R7.00
Armed Security Officer
R5.50
R6.50
R7.00
National Key Points Officer R5.50
R6.50
R7.00
Control Centre Operator
R6.50
R7.00
R5.50
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ECC Private Security Sector Report 2012
5.4.
Night Shift Allowance
The Commission recommended that the night shift allowance should be increased by R0.50 as
stipulated in the National Bargaining Forum agreement.
5.5.
Long Servicer
The ECC supports the proposal by the Department in relation to the issue of long service that
the status quo should remain the same. Currently the long service is paid as follows:
a) R500.00 (Five hundred rand) after 5 (Five) years,
b) R1000.00 (One thousand rand) after 10 (Ten) years, and
c) R5000.00 (Five thousand rand) after 20 (Twenty) years.
5.6.
Annual Increase
Taking into account the singed agreement as well as the proposals and recommendations made
by the Department, the ECC recommends that the annual increases for year 2 and 3 will be
calculated by adding the annualised Consumer Price Index plus 2% (two per cent) to the
security officers Grade D and all other categories in all areas salary rates for the year 2 of this
determination, with a minimum increase of 7.25% (seven and a quarter per cent) for such entry
levels and maximum of 8% (eight per cent) while in the third year of the determination Grade D
security officers will receive annualised Consumer Price Index plus 2% (two per cent) to the
Grade D salary rate with a minimum increase of 7% (seven per cent) for such entry levels and
maximum of 8% (eight per cent).
5.7.
Annual Bonus
The ECC recommended that the signed agreement in relation to the new formula which
is agreed to by parties in terms of annual bonus should be adopted. The new formula
stipulates that for each month the employee was paid or entitled to be paid in respect of
each completed 12 months of service with such employer, an annual bonus, calculate as
follows:
A – (B X C)
12
A
=
Security officer’s ordinary salary
B
=
Security officer’s hourly equivalent rate of pay
C
=
The number of hours worked short due to absenteeism
Provided that –
(i)
only unauthorized hours of absence should be used in determining the figure “C” in the
above formula.
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ECC Private Security Sector Report 2012

any period of approved absence, including but not limited to, annual leave,
sick leave, maternity leave, study leave, family responsibility leave and
protected industrial action shall not be used to reduce the bonus payable in
terms of this clause, and

any employee who is scheduled to perform duties as a spare and is not utilized
for that shift should suffer no detriment for the duration of the shift in the
accumulation of his/her annual bonus.
5.8.
Demarcation
The ECC supports the signed agreement by the parties in relation to the issue of demarcation
and support the idea of introducing the Grade D and Area 3 premiums to minimizing salary gap
between Grade C and Grade D and also to minimize rate gaps between Areas 2 and Area 3.
5.9.
Other Conditions
The Commission recommended that status qua should remain the same on other conditions. The
ECC therefore agree that it is not necessary to revisit these conditions at this point.
During the deliberation in the ECC meeting the commissioners raised a concern in relation to
the way some of the decisions are agreed in the Bargaining Forum particularly on the issue of
minimum wages for the Grade A to D in the year 2 and 3 for this determination. Although they
agreed with the signed agreement they are concerned that these categories will be
disadvantaged in those years as this can result in those particular categories getting increases
below the inflation rate. They further raised their concern on the following issues:
a) Premiums and other allowances
b) Section 15 clause (c)(ii) which deals with the radius
c) Areas
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ECC Private Security Sector Report 2012
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ECC Private Security Sector Report 2012