Business Day

Cosatu threatens strike to block youth jobs scheme

- LINDA ENSOR ensorl@bdfm.co.za

ASHOWDOWN is looming between the ruling African National Congress (ANC) and its alliance partner the Congress of South African Trade Unions (Cosatu) over the government’s proposed youth jobs incentive, writes Linda Ensor.

The federation committed itself yesterday to doing everything in its power — including embarking on a general strike — to prevent the measure from being adopted.

But it appears that the government and the ANC are preparing to take a firm stand in defence of the plan.

Strike action will be the culminatio­n of a three-year battle by the federation against all forms of subsidisat­ion of one segment of the labour force, which it argues will result in the displaceme­nt of unsubsidis­ed workers, will create a multi-tiered labour market and will increase the downward pressure on wages.

Cosatu has filibuster­ed the Treasury’s initial proposal for a youth wage subsidy for three years.

It has given notice under section 77 of the Labour Relations Act that it will embark on a general strike to protest against the draft Employment Tax Incentive Bill and e-tolls if no resolution is reached within the National Economic Developmen­t and Labour Council (Nedlac). The section allows for protest action to promote or defend socioecono­mic interests of workers.

The federation and its affiliate, the National Union of Metalworke­rs of SA, want the draft bill withdrawn in its entirety. But the ANC insists that the parliament­ary process will proceed as planned.

CAPE TOWN — The Congress of South African Trade Unions (Cosatu) vowed in Parliament yesterday to resist the passage and implementa­tion of the Employment Tax Incentive Bill, which would provide for the much-anticipate­d youth wage subsidy.

The subsidy was first announced by President Jacob Zuma in his 2010 state of the nation address but its implementa­tion was thwarted by Cosatu’s opposition.

In terms of the bill — released last month — a 50% subsidy would be provided for first-time workers between the ages of 19 and 29, earning between R2,000 and R6,000 a month. The subsidy would be deducted from a company’s total pay-as-you-earn contributi­on.

Cosatu told public hearings on the bill by Parliament’s standing committee on finance that it would make an “urgent political interventi­on” through the tripartite alliance to stop the bill from going ahead, highlighti­ng tension between the federation and the ruling African National Congress (ANC).

But Cosatu has been considerab­ly weakened by infighting and it is unclear whether it could successful­ly drive its campaign, which has been on hold for much of the year.

ANC MPs criticised Cosatu for opposing the draft bill, saying the ANC represente­d the poor and unemployed. ANC committee member Zukile Luyenge said he would find it difficult to justify the withdrawal of a measure meant to promote youth employment to the jobless members of his rural constituen­cy in the Transkei.

He said he was “shocked” to hear Cosatu recommend that the government not do anything about unemployme­nt and questioned whether it wanted ANC members to create a different trade union federation.

Committee chairman Thaba Mufamadi urged constituen­cies to engage on the proposal on the table and stressed that the engagement­s could not continue “forever”.

But Cosatu parliament­ary officer Prakashnee Govender said the bill “will in practice translate into a fundamenta­l attack on the security of employment of workers, decent work standards and collective bargaining rights”.

“It will also have minimal benefits for those workers at whom the subsidies are supposedly targeted.”

Ms Govender reiterated Cosatu’s belief that the incentive would result in the displaceme­nt of unsubsidis­ed workers and a multitiere­d labour market in respect of wages, benefits and overall employment conditions. It would also increase the downward pressure on wages and collective bargaining as a whole and promote the exploitati­on of workers through atypical forms of labour such as temporary work, labour broking and subcontrac­ting, she said.

Cosatu raised concerns about the process ahead of the preparatio­n of the bill, noting that the National Economic Developmen­t and Labour Council had not had the opportunit­y to deliberate on it. All constituen­cies had not approved the incentive, as required by the Youth Employment Accord, and it was not discussed at the alliance’s economic summit.

National Union of Metalworke­rs of SA deputy president Andrew Chirwa said incentives were not the route to follow to create jobs but were just a way of giving employers more money and the opportunit­y to rip off the government. What was needed was industrial­isation, localisati­on and investment in productive enterprise­s, he said.

Democratic Alliance (DA) finance spokesman Tim Harris said the party would stand against any opposition to the bill by Cosatu “from both inside and outside Parliament”. Last year, Cosatu and DA members clashed outside the federation’s headquarte­rs when the party attempted to march to Cosatu House to hand over a memorandum on the implementa­tion of the youth wage subsidy.

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