South Africa cracks down on creation of bogus co-ops which exploit workers

‘All of these jokers have now run out of time. The arc of justice has caught up with them’

New laws have been introduced in South Africa to combat the proliferation of bogus co-operatives that exploit workers.

The Regulations for the Co-operatives Amendment Act passed the final stage of its legislative procedure and came into operation on 1 April.

The Southern African Clothing & Textile Workers’ Union (SACTWU) has welcomed the move. “Workers and their unions now have the tools to bring the full might of the law down on the scourge of bogus co-operatives plaguing tens of thousands of workers across the country,” said general secretary Andre Kriel.

“In the clothing industry alone, there are estimated to be around 15,000 workers abused by bogus co-operatives.”

Members of co-operatives in South Africa have been legally considered self-employed making them exempt from minimum wages and labour standards. Unscrupulous factory owners have exploited this loophole by changing their businesses to co-ops and forcing their employees to join them, stripping them of their workers’ rights.

“Nefarious employers have seen this as an opportunity to cut wages – so workers in bogus co-operatives lose money and benefits,” said Mr Kriel.

“But these co-operatives remain under the control of the original factory owner who also takes all decisions around the working hours and conditions of workers. And if workers raise concerns about anything, they are simply disciplined and fired on the spot.”

The legislation now requires co-ops to comply with labour laws unless they can demonstrate to be genuine co-ops functioning on behalf of and in the interests of their members. “Of course, bogus co-operatives cannot prove this and any of their sham attempts to do so fall flat upon close scrutiny,” Kriel added.

“All of these jokers have now run out of time. The arc of justice has caught up with them.”