By Tasneem Adams

Building sub-contractors in Cape Town are feeling the pressure from the Building Industry Bargaining Council (BIBC) and its current compliance policies, with some accusing the council of an abuse of power. Many sub-contractors are battling to stay afloat as they have been forced to fork out millions in compliance fees.

Last month, sub-contractors in the construction industry protested outside the BIBC offices in Bellville, objecting to the huge levies imposed on small companies. Sub-contractors are a vital part of the local economy as they carry out the hard labour needed for industrial and development projects. The main contractor hires or employs sub-contractors to deliver services as part of a larger project, but in most instances, it is the sub-contractor slapped with the fine.

The regulations, as stipulated by the BIBC, indicate that both the contractor and client may be liable for penalties or even face prosecution should the contractor not be compliant. Sub-contractors say they are being forced comply with the rules – or face the consequences of being blacklisted and not issued with tenders.

“We have been in the industry for many years and now BIBC is visiting our sites, terrorising our subcontractors for money. If we don’t pay, they can tell the main contractor to we are non-compliant, force them pay them to pay the BIBC directly or not allow us to enter the site,” said Sulaiman Adams, a sub-contractor.

“The problem started in 2017 where there was a certain amount that was supposed to be paid out to workers that were not done. Last year, workers only received a third of that amount. For example, if we paid the BIBC R1 million for the year, they only paid back the workers R175 000,” he explained.

Where does the money go?
The BIBC is responsible for regulating and monitoring employment conditions in the building industry in the Cape Peninsula, Boland, Malmesbury and Overstrand areas. By law, all building and building-related contractors must pay their employees the minimum rates as prescribed and contribute to certain minimum employee benefits. These employment conditions are gazetted in the Collective Agreement by the minister of Labour and as such is a law.

According to the BIBC’s website, if sub-contractors are unregistered, exempted or in dispute with the BIBC, they will not be regarded as compliant.

“Apart from the moral obligations to pay a fair wage and to compete fairly, the Minister of Labour by gazetting the Collective Agreement has made these legal obligations for the building industry and the Council is empowered to enforce compliance with the agreement,” it states.

BIBC says its “aware of misconceptions” that exist in the industry regarding monies due to them. It emphasized that 96% of the total amount paid to the BIBC by the employer is in respect of employee benefits and is credited directly to the employee.

Employer contribution

34% is paid over to Sanlam as contributions to the employee’s pension/provident fund, 33% is contributions towards the employee’s holiday or leave pay and 26% towards a bonus fund. The holiday and bonus funds are paid over to the employees in December. The BIBC Sick fund makes up 4% of the employer contribution and the BIBC Sick fund pays the employee’s wage when he or she is sick. The remaining 4% is paid towards an administrative levy payable to the BIBC to ensure compliance and administer the various funds.

The breakdown is illustrated here:

The concerns of the contractors:
1. That the BIBC’s minimum wage is too high and the employee benefits are too high.
BIBC response: The BIBC does not determine these rates which are negotiated by the parties, but is responsible for the administration of the funds and the enforcement of the Collective Agreement

2. That the main contractors are not paying them enough to comply with the BIBC.
BIBC response: The BIBC is not mandated to get involved in the contracts between main contractors and sub-contractors, except as far as the requirement that both should be compliant with the BIBC (refer Clause 7 of the Collective Agreement).

3. That they do not have input in wage negotiations.
BIBC response: Before wage negotiations start, non-parties are invited via the media as well as via our email database to give their input into the negotiations. No such submissions have been received.

4. Penalties/Fines issued by the BIBC:
BIBC response: Penalties and fines are written off by the BIBC as a token of goodwill once all the employee benefits have been contributed. Fines remain applicable if the contractors does not settle outstanding matters and the matter is referred to arbitration and the legal course followed.

5. There is nobody looking after the interest of the sub-contractors.
BIBC response: The LRA makes provision for any group of employers to establish an employer body and in terms of the BIBC’s constitution, if such an employer body represents 1000 industry employees, they can apply for a seat on the Council and be represented at the BIBC

VOC News contacted the Building Industry Bargaining Council for an on-air interview but were told that a sub-committee of the council met with a delegation of ten representatives of sub-contractors in order to discuss their concerns. Resulting from this meeting, the BIBC has called an emergency full council meeting.

“We want to have a say in the collective agreement. If BIBC is going to do what they have been constituted to do, we will support them. But they are terrorising and indoctrinating our workers,” said Adams.

In the wake of these issues, a new organization is being formed to represent the interests of building sub-contractors in Cape Town. – called the Building Society of the Sub Contractors. The organisation, which represents 300 subcontractors in Cape town, Boland and the West Coast, are planning a mass rally in the coming weeks.

“The plan is to open up a dialogue which must involve all the parties. The main contractor, investors, labour and sub-contractors must be a part of this. This is affecting us and goes down to our labour. We as sub-contractors are employers and if the BIBC is going to rip us off, then the rest of the workers will lose work when we close down,” said Ayanda Peters, a member of the organisation.

“We urge all the sub-contractors to join us, so we have one voice going forward.”

To join the Building Society of the Sub Contractors, contact Sulaiman Adams on 083 636 8855.

Listen to the interview here: