Breath­ing space

Cosatu says yes to giv­ing time for com­pli­ance

Finweek English Edition - - Economic trends & analysis - GRETA STEYN

PRES­I­DENT Thabo Mbeki’s State of the Na­tion ad­dress in 2005 raised hopes in busi­ness cir­cles that steps would be taken to help small busi­ness by eas­ing the bur­den of com­pli­ance with cer­tain as­pects of labour leg­is­la­tion. Labour re­acted an­grily at the time. But, two years later, Cosatu has come up with sug­ges­tions that could help small busi­ness.

At is­sue is the ex­ten­sion of wage agree­ments reached in bar­gain­ing coun­cils to busi­nesses that weren’t party to the ne­go­ti­a­tions in the coun­cil. Some small busi­nesses say they can’t af­ford the wages agreed on by big busi­ness and big labour in th­ese coun­cils. This has es­pe­cially been the case with small cloth­ing man­u­fac­tur­ers in KwaZulu-Na­tal.

Mbeki said in his 2005 ad­dress: “Based on the re­view of the reg­u­la­tory frame­work as it ap­plies to small, medium and mi­cro-en­ter­prises, be­fore the end of the year, Gov­ern­ment will com­plete the sys­tem of ex­emp­tions for th­ese busi­nesses with re­gard to taxes, levies, as well as cen­tral bar­gain­ing and other labour ar­range­ments …”

Many com­men­ta­tors be­lieved this meant Pres­i­dent Mbeki favoured the ex­emp­tion of small busi­nesses from wage agree­ments reached in bar­gain­ing coun­cils. This trig­gered an an­gry re­sponse from Cosatu and re­mains the union move­ment’s view. Rudi Dicks, Cosatu’s labour mar­ket pol­icy co-or­di­na­tor, says “for­get it” when asked whether such ex­emp­tions could be­come the norm.

How­ever – and this is cru­cially im­por­tant – Cosatu is not im­per­vi­ous to the dif­fi­cul­ties small busi­nesses face. “There are creative ways to ac­com­mo­date em­ploy­ers. They can be given breath­ing space. If they can’t pay min­i­mum wages im­me­di­ately, they can be given time to do so,” says Dicks.

He says the real ques­tion is how best to in­clude small busi­ness in bar­gain­ing coun­cils. In the chem­i­cal in­dus­try, for ex­am­ple, small busi­nesses have been rep­re­sented in the bar­gain­ing coun­cil. They have been given three years to com­ply with agree­ments reached.

Cosatu’s de­ci­sion to al­low some breath­ing space shows some flex­i­bil­ity on its part (though one is hes­i­tant to use the word “flex­i­bil­ity” as it’s such a loaded term in SA’s de­bates on the labour mar­ket …). Dicks says peo­ple were read­ing too much into Mbeki’s 2005 speech.

The In­ter­na­tional Mone­tary Fund has made a big is­sue about the ex­ten­sion of bar­gain­ing coun­cil agree­ments to non-par­ties as a fac­tor in­hibit­ing em­ploy­ment growth. How­ever, the Min­is­ter of Labour is al­ready en­ti­tled to grant ex­emp­tions to busi­nesses at his dis­cre­tion, and most ap­pli­ca­tions for ex­emp­tions are granted.

Dicks feels the fo­cus on the labour mar­ket as a key fac­tor be­hind the fail­ure of the econ­omy to cre­ate jobs is mis­placed. A spokesman for the Labour De­part­ment says the so­cial part­ners – busi­ness, labour and Gov­ern­ment – have agreed that is­sues of eco­nomic growth, small busi­ness de­vel­op­ment and job cre­ation can­not be lim­ited to the labour mar­ket alone. “There’s a need to also look at trade and macroe­co­nomic is­sues as part of the broader de­bate.”

An is­sue about which there’s dis­agree­ment be­tween busi­ness and labour is reg­u­la­tion of tem­po­rary work­ers and ca­sual labour, or “atyp­i­cal work”. It is, how­ever, com­mon cause that there are con­cerns that un­scrupu­lous labour bro­kers are abus­ing work­ers’ rights. Com­pa­nies are in­creas­ingly mak­ing use of ca­sual labour through labour bro­kers be­cause the re­spon­si­bil­ity for com­pli­ance with labour leg­is­la­tion falls on the bro­kers.

Vic van Vu­uren, chief op­er­at­ing of­fi­cer of Busi­ness Unity SA, says Busa has put for­ward a pro­posal that busi­ness should reg­u­late it­self. “We ac­cept there are abuses tak­ing place. Those op­er­at­ing in the tem­po­rary em­ploy­ment sec­tor are say­ing they’re harmed by fly-by-night op­er­a­tors. A clean-up is needed.”

Van Vu­uren says busi­ness has pro­posed the cre­ation of a reg­u­la­tory body that would en­force min­i­mum stan­dards. He says the sec­tor is sig­nif­i­cant, as it em­ploys up to 800 000 peo­ple a day.

Dicks says Cosatu will not agree to sel­f­reg­u­la­tion of atyp­i­cal work. He says labour bro­kers must com­ply with the leg­is­la­tion and en­sure there’s a proper com­mer­cial con­tract. One is­sue is how best to en­force ex­ist­ing leg­is­la­tion. “Is ex­ist­ing leg­is­la­tion suf­fi­cient to de­ter em­ploy­ers from abuses? We need an au­dit scan to find out.”

Labour also has a prob­lem with the Labour De­part­ment’s ca­pac­ity to en­force leg­is­la­tion. Since the present Min­is­ter, Mem­bat­hisi Md­lad­lana, took over, the num­ber of in­spec­tors has fallen from 1 200 to 700. “They’re over­worked and un­der­paid and can’t deal with the large num­ber of queries on labour leg­is­la­tion,” Dicks says.

An is­sue about which Gov­ern­ment, busi­ness and labour agree is that the Com­mis­sion for Con­cil­i­a­tion, Me­di­a­tion and Ar­bi­tra­tion (CCMA) needs to be­come more ef­fi­cient. Labour an­a­lyst Andrew Levy says CCMA hear­ings em­u­late a high court and are time­con­sum­ing and ex­pen­sive. His con­ser­va­tive es­ti­mate is that the CCMA costs the econ­omy R14bn a year.

There are abuses. Vic van Vu­uren

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