Striking a deal with minimum fallout If government wants to see the economy prosper, it needs to get its house in order on two crucial issues: minimum wages and improving labour market stability.
National Economic Development and Labour Council (Nedlac) – a consensus-seeking institution consisting of government, labour and business – currently has two extremely important proposals on its agenda: minimum wages and new rules to improve labour market stability.
Both issues are crucial because, if properly resolved, South Africa may become an investment destination of choice. If not, the introduction of a high minimum wage ahead of local elections in August, as a “quick fix” to calm discontent over the lack of an improvement in living standards, could deter investment in an economy that is already struggling to grow and keep a junk credit rating at bay, ratings agency Fitch warned in May.
On the issue of labour market stability, a Nedlac task team was established to deal with excessively long strikes that impact business continuity, sustainability and employee earnings. One of the proposals under consideration is the amendment of certain sections of the Labour Relations Act (LRA), which will introduce compulsory secret balloting of trade union members before industrial action can be taken. In other words, should union members not overwhelmingly vote in favour of a strike, it would not be allowed to take place.
The balloting is envisaged to be overseen by the office of an independent registrar. Furthermore, a code of good practice on collective bargaining and industrial action would be developed, which will prohibit the carrying of dangerous weapons during strikes, as well as the prohibition of intimidation and improper conduct on the part of strikers and non-strikers.
There is no doubt that the Nedlac partners have learnt the lessons of Marikana, but the question is whether the parties would be able to agree and finally unravel the labour market policy conundrum that has characterised SA post1994. The reality is that Nedlac has always found itself in the usual quagmire that often accompanies consensusseeking institutions, and thus it is highly unlikely that major concessions will be agreed to.
The envisaged changes could limit the perennial industrial action SA has been faced with since 1994, as well as the nature of such action. There have been a lot of damaging worker strikes in the country that were sustained through intimidation. Dangerous weapons such as knobkerries, knives and guns have become characteristic of strikes, and are often used as a stern warning for those who want to break ranks. Property is quite often damaged.
But strike action is an important tool in the hands of unions against employers who sometimes unreasonably refuse to accede to workers’ demands. Giving workers a secret vote to decide whether to strike or not is important for workplace democracy, but unions are likely to fight against it tooth and nail.
The Cosatu factor
The ruling ANC, which is in alliance with Cosatu, is caught between a rock and a hard place. It would be in the interest of the state to have fewer strikes with no violence, as this will benefit the economy and help the overburdened law enforcement agencies. But at the same time, the ruling party would also want to please its trade union partner Cosatu.
Take the recent flip-flopping on retirement policy. President Jacob Zuma had signed into law both the 2015 Tax Laws Amendment Act and the Tax Administration Laws Amendment Act, popularly known as the retirement reform laws. Zuma approved the amendments despite an impasse at Nedlac, where government and business were in agreement on the reforms, but labour opposed it. Yet the ink had barely dried when Zuma made an about-turn on the new rules on the insistence of Cosatu, which issued a stern warning to the ruling party.
Cosatu said in a statement following Zuma’s signing of the amendments that it is “an outrageous and blatant act of provocation by the ANC-led government that will have dire and lasting consequences on the relationship between government and the workers… This is not just a slight against the federation and the emasculation and undermining of Nedlac, but it is an offence against all working people, who have their deferred wages to look to after retirement”.
No across-theboard national minimum wage, as demanded by Cosatu, exists.
The debate on a minimum wage is likely to be as contentious. While a minimum wage exists in certain sectors already (for example, for domestic and farm workers), no across-the-board national minimum wage, as demanded by Cosatu, exists.
Former Reserve Bank governor Tito Mboweni is one political heavyweight who has come out in favour of a minimum wage, but he said this should be implemented on a sectoral basis. Opponents of a minimum wage say it would lead to further job losses and deter investors.
As long as government understands that one cannot hunt with the hounds and run with the hares, it should not be difficult to pick a partner this time around: does it want an economy heading for junk, or one that is on the highway to prosperity?
Cosatu’s headquarters in Braamfontein, in Johannesburg’s city centre.
Tito Mboweni Former Reserve Bank governor