‘New economy’ needs new labour relations deal

In an economy hit by double-digit contraction, battered by a 42% jobless rate and languishing in junk status, what should the key sector stakeholders — organised labour and business — be doing to lift SA out of the morass? President Cyril Ramaphosa, renowned proponent of social compacts, thinks they should be holding hands and making common cause in order to turn the economy around and set it on a path of rapid growth and development. His advocacy of social contracting and promotion of inclusive solutions may seem, to many, like fiddling in a time of crisis. The impatience with his approach is understandable in a country that has endured years of poor leadership and deteriorating economic fortunes. But he is probably right. History shows that in many countries that have successfully made tectonic policy changes in relatively short periods of time, change has been driven by a single-minded dictator or an authoritarian political party — on occasion both.

In those societies, rapid forward movement has been accompanied by a marked intolerance of dissent. Leaders make the calls, the people comply — or suffer the consequences. In SA, the democracy genie was long ago let out of the bottle. Therefore, apropos his just-unveiled economic reconstruction and recovery plan, our president can neither subdue organised labour (Cosatu being a key political ally) nor coerce business (which he needs for investment and job creation) to do what it does not want to do.

This means a genuine restructuring of our economy for a post-Covid world will require, beyond the delicate consensus reached at the National Economic Development and Labour Council, that employers and employees find each other where it matters most — the shop floor. Workers and business cannot continue talking past each other on critical issues. A good example is labour’s current determination to extract a public-sector pay rise negotiated long before Covid-19 emerged to wreck world economies.

Can the president’s ambitious economic plan succeed without the mending of relations and the establishment of rapprochement in our workplaces? As things stand, organised labourwages a lowintensity guerrilla war against employers. Many employers see organised labour as a necessary evil.

In the “new economy” envisioned by Ramaphosa, what would labour and capital each be required to contribute in the search for the common good and an enduring compact of co-operation and mutual benefit? Would unions be prepared, for example, to not only accept inclusion or consultation in corporate decision-making, but also to take responsibility for those decisions? And if called on to balance the interests of their members, employed and organised, against those of unemployed workers, who are the majority, what would the unions choose? It may well be that some in union ranks see themselves as combatants in a mortal fight between workers and capital, a mission that must end with the working class vanquishing capital. Yet even China, the most viable “Marxist” state today, has embraced many aspects of capitalism and is an enthusiastic participant in its markets.

What about employers? What is their attitude to worker participation in the workplace? In management circles, there’s often talk of “skin in the game”, referring to managers being incentivised through share options and the like. This is assumed to align the financial interests of the company with those of business managers. It seems logical, then, that workers’ interests, too, should be synchronised with companies’. In the new economy with “inclusive growth” (the president’s words), what “skin in the game” would employers be willing to offer workers? Giving employees a corporate stake would create space for a pointed conversation about issues such as productivity and help reduce staff alienation.

But at the heart of the matter are the basis and nature of industrial relations in SA, which by definition place capital and labour permanently on opposite sides as adversaries.

Speaking in parliament about his economic revival programme and the post-Covid society, Ramaphosa urged the country to “rupture with the past”. In the economy, as in South African workplaces, that must mean reimagining the system of industrial relations, too. Otherwise we would be using a primitive and sub-optimal tool to address the new and urgent economic challenges facing us.