Cosatu says yes to giving time for compliance
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