Fedusa has raised its concerns over the collective bargaining process in a meeting with Deputy President Kgalema Motlanthe.

Johannesburg - Fedusa raised its concerns over the collective bargaining process in a meeting with Deputy President Kgalema Motlanthe, it said on Saturday.

Federation of Unions of SA general secretary Dennis George said the meeting with Motlanthe, to discuss ongoing strikes in the mining sector, was held in Pretoria on Friday.

“Fedusa raised its concerns regarding the collective bargaining process with specific emphasis on the exclusion of important role-players and how this posed a threat to sustainable solutions to our economic challenges,” George said in a statement.

He said the federation maintained its call to have Section 18

of the Labour Relations Act removed as it was against the principles of a democratic government.

The section dealt with the right to establish thresholds of representativeness.

“We believe that Section 18 is both unconstitutional and in total opposition to the right of freedom of association,” said George.

“While it excludes often meaningful role-players from the labour relationship, it also breeds collusion and corruption.”

He said Motlanthe would hold meetings with other stakeholders to hear their concerns before discussing bargaining issues “full-on”.

“He (Motlanthe) continued by stating that the biggest concern was the numerous wildcat strikes and unpredictability of labour unrest in key sectors of the economy,” said George.

He said Fedusa looked forward to meeting with Motlanthe again. - Sapa

Researchers point to inadequate education and dearth of opportunities for experience

A LACK of logistics skills is hampering South Africa’s ability to compete in the global market, with about 65 percent of employers struggling to fill tactical and strategic level positions in supply chain networks.

The shortage of logistics skills similarly hampers businesses that handle the delivery of goods, according to researchers from the University of Johannesburg who will present their findings at next week’s 35th annual Sapics conference at Sun City.

Their 2012 Supply Chain Skills Gap Survey, conducted by Rose Luke and Gert Heyns, shows logistics or supply chain require a range of skills to be effective and efficient.

“A combination of ‘soft’ skills, like team work and communication skills, and ‘hard’ skills, like specific technical or analytical skills, are required,” said Luke.

The worst-case scenario was that customers often resorted to using foreign companies that cost less as a result.

South Africa is ranked 23rd in the world for logistics performance, according to the World Bank. Heyns said a skills shortage also put South Africa behind other countries.

According to an Adcorp report, the economy shed about 5 000 jobs in the transport and logistics sector last month because of a skills gap.

And logistics skills were not the only professional skills lacking in South Africa either, Luke warned. Their findings showed up other problem areas, including customer focus, ability to plan and prioritise, business ethics, and the ability to see the bigger picture.

Merina Willemse, an economist at Efficient Group, commented: “It’s a very real hardship in South Africa that we do have a significant skills shortage, added to (our) structural problems and persistent high unemployment rate.”

While the logistics sector lost jobs last month, a further 18 000 low-skilled jobs were lost across the board. But the Adcorp report showed that 16 000 high-skilled jobs were created. Willemse said these figures showed that the economy had the capacity to absorb skilled labour more than unskilled labour.

Luke said there were many factors driving the skills shortage, including an inadequate long-term education and skills development strategy, and a changing economy with new demands. Of the survey respondents, 40 percent said high school education was necessary for working in supply chain, and that faults in the education system contributed to the problem, she added.

Willemse pointed out: “We have a massive portion of our population that doesn’t even have matric, and when they do, the quality is quite poor… It’s not about getting everyone a degree; it’s about getting everyone a quality matric education and practical forms of training.”

Lyndy van den Barselaar, Manpower South Africa’s managing director, said there was also insufficient investment in training and development. “People have the formal qualifications and have the skills on a piece of paper, but not in terms of experience,” she said.

Last year, the group released a report pointing to a skills shortage in multiple sectors, with about 829 000 unfilled positions for high-skilled workers. Manpower’s latest report on the talent shortage is scheduled for release next week.

“We continue to produce unskilled or low skilled labourers that demand high salaries. All of these issues are making South Africa very uncompetitive which again undermines growth and employment – a vicious circle,” Willemse said.

Van den Barselaar said that as the demand for skills rose, so did the cost of acquiring such skills. Many South Africans also left the country for more attractive offers globally.

The government had developed programmes like the National Growth Plan and the National Development Plan to create jobs and skills, and improve education, and Willemse said she hoped to see results in the next two years.

Luke said the nature of the skills shortage was so severe that a wide range of interventions was required at many different levels. There needed to be changes in the skills taught at primary and secondary education levels, as well as changes in focused tertiary education, workplace placement programmes and experiential learning programmes.

Van den Barselaar added that people also needed to be given more opportunities to gain more experience and skills. “We need to provide opportunities to develop skills so that the older generation is transferring skills to the younger generation,” she said. “Otherwise the skills shortage is going to get worse.”

rachelle.blidner@inl.co.za

Weekend Argus

Cosatu's central executive committee will decide on the future of its general secretary. Here is a look at the issues behind the story.

Cosatu’s central executive committee, its highest decision-making body between congresses and central committees, meets on Monday to decide on the future of its popular general secretary Zwelinzima Vavi – an outspoken critic of corruption by the ANC-led government – who has been accused of corruption. LEE-ANN ALFREDS provides a guide to the issues behind the story.

WHAT IS AT STAKE?

The leadership of Cosatu as well as its political and moral direction.

Some analysts believe the crisis is the result of an SACP plot to oust Vavi, who is considered too critical of the ANC-led government of President Jacob Zuma and some of the government’s policies, especially the National Development Plan.

There is also an argument that the crisis centres on Cosatu’s increasing proclivity over the past few years to dabble in “high politics” and the ANC’s leadership wrangles at the expense of focusing on labour issues and protecting workers’ interests.

Vavi’s main foes, Cosatu president, Sidumo Dlamini, who is a staunch supporter of Zuma, and National Union Mineworkers (NUM) secretary general Frans Baleni, are in favour of fostering a closer working relationship with the ANC while Vavi’s main supporter, the National Union of Metalworkers of South Africa (Numsa), is focused more on building worker power and is critical of a too-cosy relationship with the ruling party.

WHO WILL ATTEND THE MEETING?

Cosatu’s six national office bearers, the nine provincial chairmen and general secretaries and the national leaders and representatives from the 19 affiliate unions.

The 11 unions with over 80 000 members are represented by four national leaders, while the remaining eight affiliates with fewer than 80 000 members are allowed only two.

WHO IS ELIGIBLE TO VOTE?

Only those representing the affiliate unions are allowed to vote, meaning 60 representatives have voting power.

The national office bearers and provincial representatives have speaking rights but no voting rights.

WHERE WILL THE MEETING TAKE PLACE?

At the Cosatu head office in Braamfontein, Joburg.

WHAT IS VAVI ACCUSED OF?

The main allegations centre on Vavi’s purported selling of the old Cosatu House building in Braamfontein, Joburg for R10 million, far below its market value.

The Police and Prisons Civil Rights Union (Popcru) claims it offered to buy the building for R15m, but Vavi allegedly turned the union down and sold it to a company linked to a relative of his.

They also accuse him of awarding a contract to a company that allegedly employs his daughter.

Vavi is also alleged to be involved in financial impropriety relating to the procurement of the federation’s new R50m Braamfontein headquarters.

Other allegations relate to claims that Vavi has collaborated with opposition parties and rival unions to destabilise the government and the ANC, and that he has meddled in the internal affairs of one of the federation’s affiliates.

Union leaders also accuse Vavi of using Corruption Watch, of which he is a board member, to launch probes into their activities.

WHAT WILL THE DELEGATES BASE THEIR DECISION ON?

A three-pronged inquiry has allegedly been under way over the last few months. Auditors Sizwe Ntsaluba Gobodo have conducted a forensic audit into Cosatu’s administration and finances while respected labour lawyer Charles Nupen has headed up a political commission into the claims.

Former South African Municipal Workers Union (Samwu) president Petrus Mashishi has been looking into “organisational matters”.

All three were to have reported back to federation before the executive committee, but the Mail & Guardian reported this week that the inquiry had stalled because the union leaders had failed to provide a clear mandate on how to conduct it.

WHO SUPPORTS VAVI?

Numsa, the Food and Allied Workers Union, Samwu, the Democratic Nursing Association of SA and the SA State and Allied Workers Union.

WHO IS LOOKING TO GET RID OF HIM?

NUM, the National Education, Health and Allied Workers Union, Popcru, the SA Transport and Allied Workers Union and the Chemical, Energy, Paper, Printing, Wood and Allied Workers Union.

WHO IS UNDECIDED?

The SA Democratic Teachers Union and smaller affiliates, the Communication Workers Union, the Public and Allied Workers Union of SA, the South African Democratic Nurses’ Union, the SA Football Players Union, SA Medical Association and finance union Sasbo.

WHO IS HOLDING THEIR CARDS CLOSE TO THEIR CHEST?

The Southern African Clothing and Textiles Workers Union and the SA Commercial Catering and Allied Workers Union.

HOW WILL A DECISION BE CARRIED?

By simple majority (in other words 31 votes) – generally through a show of hands. If the meeting agrees, a ballot can be held. For a decision to be made, a motion must be tabled and seconded and then voted on.

WHAT DOES THIS MEAN IN TERMS OF VOTES?

It is too close to call. While the Business Day has indicated that the numbers are against Vavi – with 20 guaranteed votes against him compared to about 12 for him – a final estimate is difficult as it is unclear where some of the unions stand on the issue. Should the newspaper be correct, the anti-Vavi faction only requires a few more votes to carry the day.

WHAT ARE THE OTHER POSSIBLE SCENARIOS?

Instead of being ousted, the pro-Vavi faction may be successful in carrying a proposal that a special congress be held so that ordinary members can be given the opportunity to decide on his future. If this happens, it is more than likely that Vavi will carry the day as he is popular with the rank-and-file.

Saturday Star

Nearly 2 000 farmers, many from the Western Cape, have applied for exemption from the minimum wage for farm workers.

Cape Town - Nearly 2 000 farmers, many from the Western Cape, have applied for exemption from the minimum wage for farm workers.

Labour Minister Mildred Olifant told a press briefing on Thursday, following her department’s budget vote speech, that 1 988 farmers had applied for exemption from the new R105-a-day wage included in the sectoral determination for farmworkers.

Last year farm strikes started in De Doorns as workers protested against the R69-a-day minimum wage.

The strikes spread and turned violent, resulting in the destruction of property and at least two deaths.

Workers demanded R150 a day, but earlier this year the Labour department decided on a new daily minimum wage of R105.

Farmers who said they could not afford to pay the increased wage were given an opportunity to apply for exemption, but were required to provide the relevant proof.

Les Kettledas, deputy director-general of labour policy and industrial relations

in the department, said the highest number of applications for exemption had come from the Western Cape, followed by Mpumalanga, Free State and Limpopo.

Already 470 of these applications, representing around 32 500 workers, had been declined.

Kettledas indicated that many of those denied applications had not included financial statements or proof that the farmers had consulted with their workers on the wage issue.

“Until such time as they provide those, their applications will be denied,” he said.

About 64 applications for exemption, representing 7 500 workers, had been approved.

In her budget speech, Olifant said the department would introduce or amend several pieces of legislation to secure the rights of workers, among them farmworkers and domestic workers.

The department was hard hit in the past year by massive labour disputes in many of these sectors.

Amendments to the Compensation for Occupational Injuries and Diseases Act, which are in the works, would include farmworkers and domestic workers not entitled nor covered by this legislation.

Domestic workers have also been recognised in proposed amendments to the Unemployment Insurance Fund (UIF).

The amendments, which the department says are “largely technical” and therefore unlikely to be opposed, have already been determined to be affordable and legal by actuaries and attorneys.

The National Treasury has been consulted, but the amendments still need to go before the cabinet, and be released for public comments.

Olifant said domestic workers would, following the amendments, be able to access maternity leave benefits from the fund.

Other planned amendments to the UIF include an extension of the benefits period from eight months to a year.

Women going on maternity leave will also be paid an income replacement rate of 38 to 66 percent of their salaries.

In addition, the period of time family members would have to claim death benefits from the fund would be extended from six months to a year.

This, Olifant said, was to observe various cultures and their mourning processes.

Weekend Argus

Cosatu's Zwelinzima Vavi accused everyone from the media, to employers and the opposition of trying to "divide and rule".

Johannesburg - COSATU general secretary Zwelinzima Vavi has blamed everyone from the media, employers and the opposition, especially the DA, for trying to “divide and rule, to fragment and ultimately destroy the power of workers which was built over decades”.

But he told the audience at the National Union of Mineworkers’ central executive committee meeting in Pretoria this week that they would not succeed, and that Cosatu’s “unity is our strength”.

The NUM is said to be in the vanguard of moves to oust Vavi at Cosatu’s central executive committee meeting next week.

The NUM’s leaders and the ANC are said to be aggrieved over Vavi’s criticism of President Jacob Zuma’s ANC government and its much-vaunted National Development Plan.

But there was no evidence of dissent as they all presented a united front for NUM members and the media, with the call for unity stressed first by NUM president Senzeni Zokwane in his welcoming address, then by ANC treasurer Zweli Mkhize, and Vavi.

“We must defend Cosatu – a divided Cosatu would mean a divided alliance,” said Zokwane in a sentiment later endorsed by Mkhize, who told the audience to “defend the unity of Cosatu at all costs”.

Vavi also attributed stories of the infighting tearing Cosatu apart to a “media campaign of lies and distortions spread by leaks of faceless anonymous sources who want to weaken and wreck the federation”.

Vavi vowed that Cosatu would fight the government’s moves to implement e-tolls with the “same rigour that it fights for improving conditions in the workplace”.

He exhorted delegates to defend the gains of the past 20 years and return the ANC to power in next year’s elections.

Weekend Argus

The National Union of Mineworkers cannot be blamed for the violence in the mining sector, Mineral Resources Minister Susan Shabangu said.

Pretoria - The National Union of Mineworkers (NUM) cannot be blamed for the violence in the mining sector, Mineral Resources Minister Susan Shabangu said on Friday.

“As I believe, the NUM belongs to the discipline of the left therefore it cannot be held responsible for the violence on other unions,” Shabangu told the union's central committee meeting in Pretoria.

“It can also never be correct that marches are being held to scare management to close the office of minority trade unions.”

The minister said the right to associate or disassociate was enshrined in the Constitution.

NUM needed to represent its workers without fear or favour.

Shabangu said violence and murder could not be used to coerce people to join a union.

“We are calling for a peaceful coexistence of unions in the mining industry; let freedom of association prevail.

“The NUM is not the enemy of Amcu (Association of Mineworkers and Construction Union), and Amcu is not and should not be the enemy of NUM.”

Shabangu said the unions needed to join hands as they had one common class enemy - “monopoly capital”.

“You are both organisations that should represent the class interests of mine workers... Monopoly can only thrive through divide and rule. Instead of joining hands and promoting unity, trade unions are busy decimating each other, as we have seen last week.”

Rivalry between NUM and Amcu in Rustenburg and the mining sector had intensified and escalated into violence.

Shabangu said it was a testing time for the NUM. - Sapa

Violence and murder cannot be used to coerce people to join a union, Mineral Resource Minister Susan Shabangu said.

Pretoria - Violence and murder cannot be used to coerce people to join a union, Mineral Resource Minister Susan Shabangu said on Friday.

“We are calling for a peaceful co-existence of unions in the mining industry; let freedom of association prevail,” Shabangu told the NUM central committee meeting in Pretoria.

“The NUM is not the enemy of Amcu, and Amcu is not and should not be the enemy of NUM.”

Shabangu said the unions needed to join hands as they had one common class enemy - “monopoly capital”.

The mining sector has lately seen fierce rivalry between the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (Amcu) that has led to violent labour unrest in North West.

Shabangu said this was a testing time for NUM, but the union needed to represent its members without fear or favour. - Sapa

US stocks fell for a third day, putting indexes on track for their first negative week since mid-April.

New York - US stocks fell for a third day on Friday, putting indexes on track for their first negative week since mid-April, on lingering concern the US central bank may scale back its support to the economy.

Trading has been choppy in the second half of the week as market participants assess the Federal Reserve's evolving stance toward markets. The Fed's stimulus measures have been instrumental in a rally that has driven US stocks to record highs this year.

“We've had some volatility this week that we really haven't experienced in a month or so, so it's got a little bit of uncertainty here,” said Joe Bell, a senior equity analyst at Schaeffer's Investment Research in Cincinnati.

Friday may also be a natural time for investors to take profits heading into the long weekend, with markets closed on Monday for the Memorial Day holiday, Bell said.

Even as there is some fear that the Fed will exit too soon, many analysts say the eventual tapering of the central bank's stimulus will come with an expansion of the economy and corporate earnings, which will continue to support equities.

“A lot of people have only been giving the Fed credit for this rally and not been talking about some of the improvement in the labor market or housing data,” Bell said.

“The economy in general has been on a lot better footing than perhaps people have given it credit for.”

The Dow Jones industrial average dropped 48.07 points, or 0.31 percent, to 15,246.43. The Standard & Poor's 500 Index dropped 7.91 points, or 0.48 percent, to 1,642.60. The Nasdaq Composite Index dropped 17.00 points, or 0.49 percent, to 3,442.42.

The three major US stock indexes were on track to post their first negative week in five.

Procter & Gamble shares rose 3.8 percent to $81.68 after the world's largest household products maker brought back A.G. Lafley as chief executive Thursday, replacing Bob McDonald in the midst of a major restructuring.

Abercrombie & Fitch was the S&P 500's biggest loser after the teen clothing retailer cut its profit forecast and said quarterly comparable sales fell 15 percent, which it blamed in part on inventory shortages. Its stock lost 10.7 percent to $48.54.

Shares of Sears Holdings tumbled 15.8 percent to $49 after the US retailer reported a bigger-than-expected quarterly loss on Thursday. Sears said cooler spring weather hurt its results.

Overall, the US stock market's pullbacks have been short and shallow since November as traders have taken any weakness as an opportunity to increase long positions.

Since Wednesday, the markets have been focused on the possibility that the Fed's $85 billion per month in bond purchases will be scaled back later this year, in the wake of recent congressional testimony by Fed Chairman Ben Bernanke and the minutes from the Federal Open Market Committee's latest meeting.

The minutes showed a degree of fracture among the FOMC's members “in terms of the approach moving forward, specifically the time frame” of the unwinding of the Fed's stimulus efforts, said Peter Kenny, chief market strategist at Knight Capital in Jersey City, New Jersey.

Futures briefly pared losses earlier after the Commerce Department said durable goods orders rose 3.3 percent last month, exceeding expectations for an increase of 1.5 percent. Previous readings for orders were revised to show a smaller decline in March than previously estimated. - Reuters

The New York legal case over Argentina's debt poses a deep challenge to all future sovereign debt restructurings.

Washington - The New York legal case over Argentina's debt poses a deep challenge to all future sovereign debt restructurings, the International Monetary Fund said in a report Thursday.

A US judge's decision ordering Argentina to completely repay bondholders who refused to take part in a restructuring of its debt could have “pervasive implications” in other such cases, giving holdout creditors too much power in negotiations, the IMF said.

That in turn would challenge sovereign rescues of the type that the IMF and European Union carried out in Greece, where bondholders were persuaded to take hefty writedowns of their investments to make the rescue work.

The success of a restructuring depends on strong support for collective action - that is, all debt holders equally agreeing to take “haircuts” or other such losses on the bonds to ensure some recovery of value further down the road.

But such deals could falter if holdouts are able to lay claim later to full payouts, as the court has allowed in the Argentina

case.

Having court support in that case would give potential holdouts more power to limit the haircuts in negotiations, for one, according to the report.

That in turn could make it harder to achieve restoring the borrower's finances to some level of sustainability, the study said.

“The ongoing Argentina litigation has exacerbated the collective action problem, by increasing leverage of holdout creditors,” according to the report.

If, based on the New York court's ruling, bondholders see that holdouts can actually disrupt payments after a restructuring, the bondholders will be discouraged from joining a voluntary restructuring - like that crucial to Greece's rescue, the IMF said.

Moreover, the New York court's decision could “increase the risk that holdouts will multiply and creditors who are otherwise inclined to agree to a restructuring may be less likely to do so due to inter-creditor equity concerns.”

The New York judge who ruled against Argentina argued that the solution is to include collective action clauses (CAC) in a sovereign debt issue.

Such a clause would require all debt holders to accept a restructuring if, for instance, 75 percent agree.

But the IMF said that even such clauses could be less effective in the wake of the Argentine case.

The court's confidence in CACs “appears somewhat optimistic given the ability of holdout creditors to take blocking positions in individual bond issuances,” it said.

The implication is that, if it needs the private sector to take a haircut on sovereign bonds to ensure that a bailout program goes through, the IMF will have to take a tougher line to ensure the program works sustainably, the report said.

For one, the IMF will have to require a very high participation rate in the restructuring.

And secondly, the Fund could more aggressively raise the possibility that a deal could be imposed on the creditors by the sovereign borrower, rather than negotiating one. - Sapa-AFP

Switzerland and China could sign a landmark free-trade agreement as early as July.

Berne, Switzerland - Switzerland and China could sign a landmark free-trade agreement as early as July, the Alpine country said Friday, as Beijing seeks to underscore its growing global ties via deals with European partners.

With China's Premier Li Keqiang in Switzerland for high-level talks, the Swiss news agency ATS quoted Economy Minister Johann Schneider-Ammann as saying he aimed to ink the deal during a visit to Beijing in July.

“China is our top commercial partner in Asia,” Schneider-Ammann underlined, during talks with Li and members of Switzerland's financial sector, a driving force of its economy.

Li lauded Switzerland as a “global financial centre” and said Beijing aimed to draw lessons from a formal dialogue.

China is reforming its financial sector, notably concerning interest rates and trading in its currency, the yuan.

As Beijing ponders allowing selected offshore centres to trade in yuan, the Swiss National Bank's chief Thomas Jordan said Switzerland hoped to do so.

Li arrived in Switzerland late Thursday on the first stop of his debut visit to Europe since taking the helm in March in Beijing's once-in-a-decade power transfer.

On Saturday he heads to Germany, China's main European trade partner.

Unlike Germany, Switzerland is not a member of the European Union, and Li's visit comes a month after China signed a free trade deal with Iceland, which likewise stands outside the 27-nation EU bloc.

The Iceland deal was China's first with a European country, and Beijing has been pressing the EU for a similar accord.

Efforts to strike an overarching deal with the EU are more complicated because Beijing would need to find agreement with the entire bloc.

On Thursday, EU officials said that they aimed to negotiate an investment protection agreement with China, which would be the first step on the road to a wider free trade deal, despite a series of tit-for-tat disputes with Beijing.

Impulse for Europe-China trade

Later Friday, Li and the Swiss were to ink a memorandum of understanding on the free trade deal, paving the way for the official signature.

Li has said the accord could have wider implications.

“This will not only enhance our economic and trade cooperation, but also send the world a strong signal about the fight against trade and investment protectionism, as well as the liberalisation and facilitation of trade,” he said Thursday in the Swiss daily Neue Zuercher Zeitung.

“It will give a new impulse to the deepening of relations and trade ties between Europe and China, bring tangible benefits for consumers and business in both countries, and contribute to the growth of world trade and the economic recovery,” he added.

Bilateral and regional free trade deals - including a planned EU-US accord and a proposed trans-Pacific agreement - are sharply in focus amid deadlock at the World Trade Organization whose 159

member states have struggled since 2001 to produce a global treaty on liberalising international commerce.

The Swiss deal has been under negotiation since 2011.

After wrangling notably over Chinese taxes on imported Swiss industrial goods and Switzerland's rules on China's agricultural exports, the two countries wrapped up technical talks earlier this month.

Bilateral trade between Switzerland and China was worth $26.3

billion in 2012, with a full $22.8 billion of that figure represented by Swiss exports to China.

That made it one of the rare Western countries to have a positive trade balance with the Asian giant.

In contrast, exports by European economic powerhouse Germany to China in 2012 were worth the equivaliant of $86 billion, and imports from China, $99.8 billion.

Switzerland's top exports to China are watches, pharmaceuticals and chemicals, and machinery, while textiles and machinery head the list of imported Chinese goods.

“We see the deal as something positive,” Jean-Daniel Pasche, head of Switzerland's FHS watchmaking federation, told AFP.

He said his industry was hoping to see a fall in Chinese import duties on watches - currently 12-16 percent - as well as better safeguards against counterfeiting. - Sapa-AFP