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.

Finweek English Edition - - OPINION - Ed­i­to­rial@fin­week.co.za is a for­mer jour­nal­ist and ed­i­tor and served as spokesper­son of the Na­tional Union of Minework­ers for seven years. He cur­rently works as ex­ec­u­tive di­rec­tor: cor­po­rate re­la­tions at the Univer­sity of KwaZulu-Natal (UKZN), and writes

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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.

Set­tling strikes

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.

Min­i­mum wage

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

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