Busi­ness bites

Walk­out at Ned­lac about pro­posed changes to labour leg­is­la­tion

Finweek English Edition - - INSIGHT - TROYE LUND troyel@finweek.co.za

CON­TRO­VER­SIAL AMEND­MENTS pro­posed to South Africa’s labour Bills have been put on ice. Finweek can re­veal that fol­lows an un­prece­dented walk­out by or­gan­ised busi­ness, rep­re­sented on the Na­tional Eco­nomic De­vel­op­ment and Labour Coun­cil (Ned­lac), where con­sen­sus has to be reached be­tween Gov­ern­ment, labour and busi­ness be­fore any Bills are re­ferred to Par­lia­ment. Fur­ther­more, the agree­ment – struck to get busi­ness back into the Ned­lac talks – is likely to be­come one of the keen­est tests yet for the ANCled Gov­ern­ment, which is go­ing to have to make some stark choices be­tween labour mar­ket reg­u­la­tions that stim­u­late em­ploy­ment and keep­ing ANC labour al­liance part­ner Cosatu pla­cated.

Busi­ness Unity South Africa (Busa) con­firmed or­gan­ised busi­ness rep­re­sented on Ned­lac dug its heels in over a suite of four labour amend­ment Bills that rep­re­sent the first ma­jor leg­isla­tive in­ter­ven­tion of Pres­i­dent Ja­cob Zuma’s term. Three of the four Bills pro­pose changes to ex­ist­ing labour laws: the Labour Re­la­tions Act (LRA), the Ba­sic Con­di­tions of Em­ploy­ment Act (BCEA) and the Em­ploy­ment Equity (EE) Act. The fourth labour Bill, the Em­ploy­ment Ser­vices Bill, is new.

Busa’s Vikash­nee Harb­ha­jan says busi­ness re­fused to en­gage in a line-by-line dis­cus­sion of the Bills (as re­quired by the Ned­lac process) be­cause they weren’t only fun­da­men­tally flawed and poorly drafted but busi­ness also be­lieved they had the po­ten­tial to achieve ex­actly the op­po­site of Gov­ern­ment’s in­ten­tion to at­tract in­vest­ment, grow SA’s econ­omy and es­ca­late job cre­ation (see box).

Busi­ness re­turned to Ned­lac ne­go­ti­a­tions af­ter all par­ties agreed that in­stead of fo­cus­ing dis­cus­sions on the Bills, sev­eral labour pol­icy themes would be cho­sen and used as terms of ref­er­ence for tak­ing dis­cus­sions for­ward. While the pol­icy themes in­clude atyp­i­cal em­ploy­ment, col­lec­tive bar­gain­ing, dis­pute res­o­lu­tion and ac­cess to em­ploy­ment, the talks will now also in­clude the ini­tial dis­cus­sion doc­u­ments Gov­ern­ment tabled in 2009, when it first sig­nalled its in­ten­tion to draft amend­ments to SA’s labour laws.

“We’re very pos­i­tive the ne­go­ti­a­tions are go­ing in the right direc­tion and the par­ties are com­ing to­gether,” said Harb­ha­jan.

Ned­lac wasn’t avail­able to com­ment, but an of­fi­cial at Ned­lac (who didn’t want to be named) says: “In other words, it’s back to the draw­ing board on this is­sue.”

Apart from busi­nesses’ crit­i­cism of the Bills and the un­in­tended (job-shed­ding) con­se­quences they hold, the Labour Depart­ment’s own reg­u­la­tory im­pact anal­y­sis (RIA) ac­knowl­edges their dam­ag­ing po­ten­tial. The RIA con­cludes: “While per­ma­nent em­ploy­ment might in­crease… it’s a fair as­sump­tion that to­tal em­ploy­ment will de­cline.” It con­cedes pro­posed penal­ties “could con­trib­ute to com­pany con­trac­tion and re­trench­ments, and even com­pany clo­sure, re­sult­ing in job losses and neg­a­tive im­pacts on eco­nomic growth”.

The con­tra­dic­tion be­tween Gov­ern­ment’s top pri­or­ity – job cre­ation – and the Bills’ con­tents sug­gests the in­ter­nal pol­i­tics of the ANC al­liance, es­pe­cially the need to ap­pease pow­er­ful trade unions, has in­formed the pro­posed leg­is­la­tion more than eco­nomic re­al­ism has.

Idasa’s Ju­dith Fe­bru­ary says the con­tro­versy un­der­scores the tight po­lit­i­cal spot Zuma finds him­self in as he nav­i­gates be­tween fac­tions in the labour al­liance to se­cure a sec­ond term at the ANC’s 2012 elec­tive con­fer­ence.

The so­lu­tion, says Ad­corp labour mar­ket an­a­lyst Loane Sharp, is re­ally very sim­ple: scrap min­i­mum wages and re­move dis­missal pro­tec­tions. “It strikes me SA cre­ated 3,5m jobs for im­mi­grant Zim­bab­weans over the past decade yet the coun­try can’t cre­ate jobs for 4,2m unem­ployed South Africans.”

Of course, il­le­gal im­mi­grants dif­fer from South Africans in two im­por­tant ways: they earn less than the min­i­mum wage and aren’t af­forded legal pro­tec­tions against dis­missal.

Cosatu re­jects this out of hand, say­ing there’s ab­so­lutely no way it will agree to any lib­er­al­i­sa­tion. On the con­trary, it wants more strin­gent labour reg­u­la­tion and in­tends to fight for that at Ned­lac.

LOANE SHARP Scrap min­i­mum wages

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