Financial Mail

A BROADER VIEW

The jobs crisis in SA continues unabated. But analysts suggest that focusing too narrowly on labour law may divert attention from important debates about policy and macroecono­mic variables

- Theto Mahlakoana mahlakoana­t@businessli­ve.co.za

Using the most recent amendments to the Labour Relations Act, temporary workers who found themselves out of jobs turned to the commission for conciliati­on, mediation & arbitratio­n (CCMA) and the labour courts for help.

They claimed they had been unfairly dismissed, explaining that the amendments to the act — requiring employers to hire temporary workers permanentl­y after three months of employment — had led to their sacking, as companies did not want to oblige.

The amendments relate to the contentiou­s issue of labour brokers, which created friction in the ruling alliance. Cosatu had demanded that President Jacob Zuma’s administra­tion ban labour brokers entirely. The ANC took the compromise position — requiring the permanent employment of qualifying workers after three months’ contract employment — which has been given effect in the amendments.

The constituti­onal court will most likely have to rule on the bigger issue: what happens to labour brokers after those three months are up.

The CCMA says it has recorded an increase in cases lodged by temporary employees since the amendments were made in 2015.

Though there have been no major changes to the laws regulating mining employment — with the exception of a new benchmark for higher wage increases — the CCMA says it has also received referrals from 36 mining companies that have filed section 189 retrenchme­nt notices since the beginning of the year.

This all points to a worsening jobs crisis in the country, as retrenched workers are statistica­lly unlikely to be re-employed in the near future.

Proposed solutions to the “jobs bloodbath” and high unemployme­nt rate have always been controvers­ial due to the different outlooks of the people involved.

Deputy president Cyril

Ramaphosa earlier this month suggested that eco- nomic regulation­s should be relaxed to spur job creation. Addressing delegates at the annual conference of the National Economic Developmen­t & Labour Council in Ekurhuleni, Ramaphosa said: “As government, we have taken measures to reduce the regulatory burdens of investing in the country and improve the ease of doing [business].”

His sentiments are likely to find favour with organisati­ons such as the National Employers’ Associatio­n of SA (Neasa), which has legally challenged some labour laws, especially those governing collective bargaining, saying they are stifling business and leading to job losses.

The other side of the debate features the trade unions and federation­s. They have argued for even stricter labour laws in light of mass retrenchme­nts. They attribute the job losses to the ease with which business was able to resort to an investment strike when the economy went south.

However, labour analyst Dale Mckinley is not convinced. He describes the shift around regulation as “political electionee­ring”, where ideologica­l cards are being played on issues that should have been revisited by the likes of Ramaphosa years ago.

Mckinley believes there is a need to review the country’s macroecono­mic policies, but he says this is not a new revelation.

In an interview with the Financial Mail, labour minister Mildred Oliphant has expressed similar sentiments.

Oliphant refers to the struggling economy as the real stumbling block to job creation — not the labour laws. “There are challenges when it comes to the economy,” she says, “but why should we always focus on labour laws rather than to say how we should grow the economy?”

The minister defends the laws, explaining that public perception­s about their rigidity and inability to protect jobs don’t recognise that they are in fact “most flexible”, even when compared with those of other countries.

In his new book, SA’S Corporatis­ed Liberation, Mckinley backs this notion: he says contract employment has increased by

500% in the public sector over the past 15 years as a result of a more casual and flexible labour market environmen­t.

However, Ramaphosa says this casualisat­ion of employment is “trapping many people in jobs with few benefits or prospects for developmen­t”.

A study published by the Internatio­nal Labour Organisati­on 10 years ago cast doubt on how wise it is to exempt medium to small enterprise­s from key regulation­s in SA: “This is problemati­c as it means that millions of workers are excluded from the protection of labour law.”

Neasa CEO Gerhard Papenfus is quick to tell the Financial Mail about the effect of collective bargaining laws, which he says have led to the closure of small businesses.

In the engineerin­g sector, where members of his organisati­on trade, a 7% wage agreement concluded recently was boycotted by all but one employer body. This was because the wage increase was unaffordab­le and would lead to retrenchme­nts, Papenfus says.

Mckinley says this argument has been used globally to push for flexibilit­y of labour laws. But he says attacks on labour laws are “barking up the wrong tree”. Instead, trade, monetary and fiscal policies need to be scrutinise­d, as well as macroecono­mic variables.

If these are not changed, Mckinley says, the country will lurch from one crisis to another. This could set a dangerous stage, with the anger, frustratio­ns and disillusio­nment of the unemployed and marginalis­ed giving rise to social unrest.

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