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Several beauty salons and spas in Mpumalanga are objecting to what they describe as the ‘bullying tactics’ and ‘demands’ of the National Bargaining Council for the Hairdressing Cosmetology Beauty & Skincare Industry in South Africa.
A petition is being drawn up by industry stakeholders to this effect, with the help of a member of the ANC Women’s League, for presentation to the Council, which takes its statutory authority from the South African Labour Relations Act (Act 66 of 1995). As such, registration to the Council is mandated by the Main Collective Agreement, as signed by the Minister.
A spa owner in the Mpumalanga area, who wished to remain anonymous, told Professional Beauty that some businesses had shut their doors as they were unable to meet the Council’s levies, with numerous therapists retrenched. “And, the Council’s representatives basically tell us that if we don’t comply with them, there will be serious consequences,” stated the spa owner.
Professional Beauty contacted the Council’s acting CEO, Frik Bekker, for comment. He replied: “We are not aware of any owners who closed down in Mpumalanga, or of any therapist retrenchments. Registration to the Council is mandated by law, but if any business owner feels that they are being bullied by Council representatives, they are welcome to report such behaviour to the Council.”
Mariska Du Plessis of the EOHCB (Employers Organisation for Hairdressing Cosmetology and Beauty) and an executive member of the Bargaining Council, added: “I personally have not heard of, nor come across, any spas or salons in Nelspruit or Hazyview that have closed recently, nor have I heard of any therapists who have been retrenched because of the Bargaining Council. No such statistics have been received by the EOHCB or the Council, nor applications for exemptions.”
She noted that the National Minimum Wage (i.e. R20 an hour) is not set by the Bargaining Council, but by the government, through deliberations at NEDLAC. “If a business cannot afford to pay the National Minimum Wage to workers, it begs the question of whether they should actually be in business. A business needs to be sustainable and comply with the law,” said Du Plessis.
Bekker pointed out that the Main Collective Agreement for the industry is negotiated by the Parties to the Council, namely the EOHCB and UASA – the Union, and signed off by the Minister of Labour. This agreement then effectively alters the Basic Conditions of Employment Act.
Council levies
The spa owner continued: “Myself and other owners in the area find the Council levy structure outrageous and believe that the Mpumalanga industry pays the highest Council levies in South Africa. Also, some of us have found the billing structure inconsistent, in that we get charged different amounts each month.”
Bekker responded: “The Council levy is payable by the employer and the employee. For establishments registered prior to November 2017, there is a fixed rate applicable to both the employer and employee contribution, in line with other provinces in South Africa. For establishments registered after November 2017, the contribution by the employer and employee are both based on 1.3% of the Contributing Wage.
“Because Mpumalanga falls within the extension of scope of the Council, we’ve phased in the levies – contributions are limited to 60% in year 1 (2020), 80% in year 2 (2021) and then only 100% in year 3 (2022).
“Council Fees are purely based on the salary / wage paid by the employer to the employee. On the current wage schedules published by the Council, the rates payable to employees are calculated using the National Minimum Wage of R 20.00 per hour, calculated over the number of hours a week the employee works.”
Billing inconsistencies
Addressing the matter of billing inconsistencies, Bekker further stated: “During September 2019, the Parties (i.e. EOHCB and the Union) concluded their negotiations for 2020/2021. As a result, the Council had to affect these new agreed upon terms and fees. Due to the short notice of conclusion of these negotiations, the implementation took longer than expected. It was communicated to the industry that certain rules would apply in September 2019, where the new prescribed salaries / wages would apply but that the contributions would be still calculated on the previous schedules published. In October 2019, the new prescribed salaries / wages applied, together with the new contributions as negotiated by the parties. As a result, differences would be noticeable in the returns distributed by the Council for these two months. This, however, has been finalised and November 2019 returns were distributed with all the amendments in place.”
Pension Fund
A big area of contention is the Pension Fund. Said another spa owner in the Mpumalanga area, who also did not wish to be named: “The Council is pressuring us to contribute to the Pension Fund but our therapists are unwilling to pay a substantial chunk of their monthly salary to a pension fund, as they need that money for transport, etc. Similarly, many owners can’t afford to match each therapist’s monthly Pension Fund fee. And, we’ve been given no indication of the Pension Fund payout.”
Bekker responded: “The Parties to the Council – the EOHCB and the Union – negotiate the contributions for all funds applicable to industry on an annual basis. The HBSI (Hairdressing Beauty Skincare Industry) Pension Fund contribution is 12% of the prescribed minimum salary, with 6% payable by the employee and 6% payable by the employer based on the prescribed minimum salary as published in the wages schedules. For Mpumalanga, the contributions payable have been phased to only include 60% of the contributions in year 1, 80% in year 2 (2021) and then only 100% in year 3 (2022).
“Owners can apply for exemptions from the Pension Fund should they wish to rather utilise an alternative fund, as long as benefits are equal or greater than the HBSI Fund.”
He noted that the HBSI Fund will only pay out should the employee retire, leave the industry completely, become permanently disabled, or pass away. Then, the accumulated savings, as well as three times the employee’s prescribed annual salary, and the funeral benefit will pay out to the beneficiaries.
Illegal businesses
Owners say that while they are being pressured into complying with the Council, they believe there are several illegal hair and beauty salons in the area that the Council refuses to approach.
According to Bekker, the Department of Labour has exempted the following: hairdressing, cosmetology, beauty and/or skincare services rendered from a canvas or sail gazebo, or if such serves are rendered in open spaces, unless chemicals are used in the execution of such services, then such places or premises will be considered an establishment.
He said: “As previously mentioned, Mpumalanga forms part of the extension of scope for the Council and we are in the area on a constant basis to ensure compliance by all businesses. Information sessions were held in 2019 and this will continue in 2020 to assist all salon or spa owners to become compliant, but also to understand the purpose of the Council and how it functions within the legal framework of South Africa as well as the Labour Relations Act.”
Union
Some salon and spa owners have questioned why the beauty industry has been assigned to UASA – The Union. Said Bekker: “UASA is the only union that is party to the Bargaining Council. The Union currently has in excess of 6,000 active members registered with the Council.
“There are certain requirements for a Union to be registered however, Section 27 of the Labour Relations Act allows for the forming of bargaining councils by employer organisations and trade unions for the purpose of seeking solutions to labour disputes, managing collective agreements, and putting forward labour law and policy recommendations, in addition to establishing relevant schemes.”
Development programmes
Business owners have said they would like to see what the Council has achieved in the past few years, in terms of development programmes, etc.
Bekker replied: “The Council was created to regulate the industry. In 2013, the Council established an industry qualification through City & Guilds due to the challenges faced by learners to become qualified. By doing this, the Council created a pathway to ensure that growth is sustained within the Industry.
“The Council is working hand in hand with SSETA (Services Sector Education and Training Authority) to upgrade the national educational framework within the industry.”