'Last days of SA’s labour regime'

2013-08-04 10:00

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Influential speakers at a conference this week appeared to agree the labour regime is due for a massive overhaul, but they cautioned that union expectations are now at unsustainable levels

The post-apartheid labour regime is coming apart at the seams. Radical changes to how wages are set, how strikes are conducted and how workers are treated are inevitable.

This, in short, was the message of speaker after speaker at the annual LexisNexis Labour Law Conference in Joburg this week, where academics, lawyers and government officials painted a grim picture of South Africa’s chances of lowering unemployment or even maintaining its current levels.

All labour market institutions in the country, from the labour courts to the bargaining councils and the sectoral determinations, are facing new, game-changing challenges.

Professor Ingrid Woolard, the chair of the Employment Conditions Commission (ECC), said she supports the single national minimum wage.

“Speaking for myself, the current system is too complicated and sets too many wages,” she said.

The ECC is the body that advises the minister on the sectoral determinations setting minimum wages for unorganised labour sectors such as agriculture and domestic work.

The unprecedented strikes that led to the farm workers’ determination increases by 59% last year may yet affect the other determinations.

There is a growing “politicisation” of wage-setting and other sectors will very likely follow farming’s path, said Woolard.

“People are saying if the wage in agriculture was so dramatically wrong, maybe others need to be looked at,” she said.

The determinations are, by far, the most important wage-setting mechanism in the country, covering 3.5?million workers.

The wages set by the determinations range from R1?614 per month for farm workers to just less than R3?000 for the retail sector.

In the labour courts, there is a “growing restlessness” about the general disregard for court orders, said Professor Alan Rycroft, head of the University of Cape Town’s department of commercial law.

Interdicts granted against strikers are “fairly disregarded”, he said.

He predicted courts will increasingly move to punish unions and workers for contempt of court when court interdicts against strikes are ignored.

According to labour analyst Andrew Levy, the mining industry is in the “last-chance saloon” and unions could actually “strike themselves out of existence”.

He said: “There is very little time left to secure the mining industry?.?.?.?and it affects all of us.”

Levy blamed the “woeful and complete lack of economic literacy” among workers for long and ultimately hopeless strikes.

According to him, sheer ignorance left mine workers with “no idea that a company cannot pay a 60% increase”.

Pervasive economic illiteracy is abused by unions who “bargain in bad faith” by proposing ludicrous wage increases, he argued.

SA Reserve Bank Governor Gill Marcus gave an unusually frank speech in support of controversial labour market interventions like

the wage subsidy, productivity-linked wage increases and importing skilled labour.

She also spoke out against high administered prices (like electricity) and the drive to ensure the beneficiation of minerals.

She compared the idea that mines should ensure beneficiation to making families who own cattle manufacture leather handbags.

In general, South Africa cannot compete in skilled sectors because it lacks skills, but it also cannot compete in unskilled sectors because of high costs, she argued.

The “inability to more closely link pay to productivity growth” is a “major feature of the labour market regime”, she said.

That is, however, “not what was intended” by the Labour Relations Act, she said.

The intention was rather that the act would create minimums and then firms would individually strike wage deals linked to productivity.

“Agreements like that are possible under our laws,” she said.

The collective bargaining system that had evolved instead “favoured big firms at the expense of smaller ones” and keeps new workers out of the labour market, she said.

These comments put her firmly on the side of employer groups who have threatened a Constitutional Court challenge against the practice of extending wage agreements to entire sectors.

According to Marcus, the labour regime post-1994 also “had not lived up to expectations” in other aspects. Its “sound intention” was to defuse tensions between workers and employers, she said.

It was now apparent that the opposite was happening.

Marcus proposed that policy makers should “focus on the worker, not the job”, arguing that social security and retraining are more important than preserving any given job.

“Wages on their own may not meet standards of living,” Marcus admitted, saying the “social wage” was crucial.

Marcus spoke positively of German initiatives to retrain workers on lower wages and advocated the “sensible” importation of skilled workers.

Reducing South Africa’s unemployment is the “single most important economic objective”, said Marcus. “It is not just about economic growth. It is also about the structural factors that inhibit employment.

“In South Africa, cyclical unemployment is a small portion. The bulk is structural.”

Every mine for itself

The Association of Mining and Construction Union (Amcu) was opposed to central bargaining altogether and would fight to bargain separately from other unions, it announced on Friday.

This constitutes a challenge to the very foundation of the gold sector’s long-standing bargaining forum, which sees almost the entire sector negotiate a single deal with all unions at once.

The chamber has repeatedly said it “invited” Amcu to join, but now faces the prospect of its entire forum splitting. Amcu represents only 17% of the gold sector’s workers, but those members are concentrated at a handful of the most important mines.

If Amcu is able to negotiate separately for only those mines, it will avoid being a junior party in the talks – and could very well end up with higher settlements than the other unions will be able to get.

This is simply because the other unions are also bargaining for more marginal mines.

Last week, Amcu refused to join the other three unions in the forum when they declared a dispute and moved the talks to the CCMA under mediation. This forced the chamber to have two parallel wage talks – one with Amcu and one with the rest.

The chamber seemed to outwit the union this week by itself declaring a dispute with Amcu – and asking the CCMA to consolidate its dispute with that of the other three unions.

Now Amcu is vowing to fight the so-called joiner application – threatening to split the talks again.

Amcu’s emerging strategy in the gold sector suggests that mooted plans for a central bargaining forum in the platinum industry is unlikely to be realised while it enjoys majority status at the major Rustenburg mines.

Mediation in the gold talks, with or without Amcu, will continue weekly on August 6, 13 and 21, led by senior commissioner Afzul Soobedaar and independent mediator Peter Harris. – Jan de Lange, Dewald van Rensburg

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