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Undermining Labour: The Rise of Sub-Contracting in South African Gold Mines

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Jonathan Crush; Theresa Ulicki; Teke Tseane; Elizabeth Jansen van Veuren (2001). Undermining Labour: The Rise of Sub-Contracting in South African Gold Mines. Journal of Southern African Studies, Vol. 27, No. 1. Taylor & Francis.
Type journal article
Scope Post-1994 South African economy
Method mixed
Period studied 1987–1998
Regions South African gold mines (Witwatersrand, Free State), Lesotho, Mozambique, Southern Africa
Themes mining migrant labour, labour markets wages, unions strikes, business and state, transition post apartheid
Citation key crush2001

Argument

Sub-contracting expanded rapidly on the gold mines after c.1990, mainly through retrenchment, full-calendar operations (fulco) and cost-cutting at marginal mines. Mainstream migrant-labour research missed it. Using TEBA data, interviews and a 1998 survey of Basotho sub-contract miners compared with a 1997 survey of regular miners, the authors argue that conditions under contractors are significantly worse than for regular miners. These conditions include lower wages, longer hours, fewer benefits, less safety and less job security. They also argue that sub-contracting has damaged the NUM, by weakening membership and creating tension between regular and sub-contract workers. The NUM's attempts to regulate it are unlikely to work without better information on what drives it.

Evidence and method

TEBA statistics on sub-contract recruiting and firm workforces (1988-1998); Chamber of Mines and Peter Lewis's data on fulco mines; a 1998 survey of 93 Basotho sub-contract miners using structured open-ended interviews; the 1997 SAMP survey of regular Lesotho miners; interviews with contractors, NUM officials and TEBA managers; NUM documents and press reports.

Findings

  • The gold mining workforce shrank by more than half between 1987 and 1999, creating a pool of skilled ex-miners for contractors. (p. 5)

    Gold mines affiliated to the Chamber of Mines employed about 500 000 workers in 1987. By early 1994, the figure had dropped to 300 000.

  • Sub-contracted labour grew sharply while total employment on a sample of mines fell. (p. 5)

    A recent sample of 27 gold mines indicates the total number of employees declined by 32.7 percent between 1988 and June 1996; during the same period, the use of sub-contracted labour on gold mines increased by 96.8 percent.

  • Sub-contracting grew fastest on fulco (marginal, full-calendar) mines. (p. 6)

    from 3.8 percent in 1988 to 17.6 percent by 1995, compared with 3.7 percent to 7.4 percent on non-fulco mines

  • Contractors moved from peripheral services into core underground production after 1990. (p. 6)

    Since 1990, contractors have increasingly penetrated core production functions underground.

  • Large mining houses had largely eliminated independent contractors by 1920, so the 1990s revival reverses an earlier consolidation. (p. 3)

    By 1920, however, the mining industry had forced most of the contractors out of business.

  • The assumption that contractors favour foreign labour is only partly supported. (p. 9)

    but this is still well below the figure for the regular workforce where foreign miners make up almost 50 percent.

  • Sub-contract miners are concentrated in lower income bands than regular miners. (p. 16)

    proportionately more of the former in the lower wage categories with 64 percent earning less than R800 per month (compared to 48 percent of regular miners)

  • Average mine pay of sub-contracted miners is lower than that of regular miners. (p. 18)

    The average wage of sub-contracted mineworkers is lower than that of the regular miners (R788 versus R836).

  • Most sub-contract miners lack standard non-wage benefits. (p. 21)

    The vast majority of respondents do not receive: a medical scheme (74 percent); sick leave or injury compensation (64 percent); pension (81 percent); severance pay (82 percent)

  • Contractor-employed workers received much less compensation after the 1995 Vaal Reefs disaster. (p. 22)

    In the Vaal Reefs disaster of 1995, the mineworkers employed by contractors were not covered by death benefits and their families received very little in the way of compensation.

  • Sub-contracting reduces how often miners can visit home, reversing an earlier improvement. (p. 23)

    Sub-contracting is reversing this trend. Only 35 percent visit home on a monthly basis (see Table 11).

  • Union membership is far lower among sub-contract miners than among regular miners. (p. 24)

    About two-thirds of the sub-contract miners interviewed are not or no longer union members. Only 11 percent of regular Basotho miners do not belong to a union.