The employment incentive legislation is scheduled to pass through the current session of Parliament and the envisaged tax incentive looks set to be up and running by January 1 next year, but Numsa says it won’t allow the ANC to hold workers hostage and it warned that passage of the bill could trigger mass strikes.
Irvin Jim, the general secretary for the National Union of Metalworkers of SA (Numsa), said the legislation represented yet another example of a litany of failures of the ruling party’s “neo-liberal” economic policies. The union movement “rejected it with contempt”.
Asked if there was any possibility of the union movement finding a compromise with the National Treasury on the Employment Tax Incentive Bill, Jim – whose union has already indicated that it would withdraw R2 milllion in funding the ANC’s 2014 national election campaign – was adamant.
“There is no middle ground. The ANC must accept one thing… that all its neo-liberal policies it has pursued throughout the years have failed to create jobs,” he said.
Jim noted that the Cosatu unions would be holding a special conference and it would be decided whether workers “would continue to vote for the ANC”.
In a clear indication that it looked most likely that Numsa was going to withdraw its historic support for the ruling party, he said. “It (will be) up to workers to decide whether to continue to vote for the ANC… which continues to roll out e-tolls (in Gauteng), refuses to ban labour brokers, is introducing forced youth wage subsidies… and is imposing a right-wing National Development Plan (NDP).”
There was only one solution to the impasse of high unemployment, poorly paid work and low growth. That, he suggested, was “to dump the current macro-economic framework”. He described the NDP and the youth wage subsidy – now called an employment “incentive” – as “disastrous”.
The incentive programme, he believed, had the potential “to destroy existing jobs”.
Cosatu, which has consistently argued that a youth wage incentive would throw older experienced workers out of jobs, told the finance standing committee of Parliament last week that it intended to stop the legislation in its tracks. It said it would make use of political mechanisms to persuade the ANC to withdraw the legislation.
But standing committee chairman and ANC MP Thaba Mufamadi said he could not comment on the Cosatu threats. “I can only talk about parliamentary processes. I have said before that the cabinet has approved the bill. The bill was tabled before the house (national assembly) and it referred the bill to the committee.”
Finance Minister Pravin Gordhan’s spokesman, Jabulani Sikhakhane, referred all queries about the bill to Mufamadi.
Mufamadi said the committee was simply doing its work. “The mistake is constantly made that this bill is… about Cosatu and Numsa,” he said.
The role of the multi-party committee – albeit dominated by the ANC, which was in alliance with Cosatu – was to consider representations “from all stakeholders”, he said.
Unions, business and non-government organisations have made written and oral submissions on the bill. Business in general has warmly welcomed the legislation, while NGOs have given guarded support for the bill.
DA finance spokesman Tim Harris said he was fearful that the ANC would “ram” the legislation through Parliament ahead of the election, although there were significant problems with the bill.
Although his party supports the principle of a workplace incentive – and marched last year on Cosatu House in Joburg to protest against the union federation’s dogged opposition to it – he says the current draft of the bill has serious flaws.
Among them were that the Nedlac process – representing the government, labour and business – had not signed off on the bill. Another was that temporary workers – potentially the most vulnerable of workers – would not benefit in any way from the legislation.
Mufamadi said that his committee would “apply its mind” to the representations.
The treasury is expected to report back on the various submissions – and make proposals of any changes – on Tuesday. On Friday, the committee will begin its own deliberations and go through the bill clause-by-clause.
Noting that the bill proposed a flat rate of R1 000 applicable to monthly wages between R2 000 and R4 000, with the subsidy tapering downwards from R1 000 to zero for wages between R4 000 and R6 000 a month for workers under 29, Numsa’s parliamentary officer, Woody Aroun, said: “It would appear that the formula actually incentivises low-wage setting and exploitation.”
The SA Clothing and Textile Workers’ Union and the Young Communist League of SA – led by general secretary Buti Manamela, who is also an ANC MP – also opposed the bill.
Manamela described the treasury, which was piloting the bill, as “the harbour of neo-liberal ideology”.