Stringent labour legislation

INLSA

I write this column having just returned from a workshop in which the topic of discussion was the labour law amendments that are in the parliamentary pipeline and are likely to be promulgated before the end of the year.

In respect of labour brokers, they do not meet the demands articulated so aggressively by Cosatu over time, but overall, they are not good news for employers either.

To be more accurate, they are bad news for business and the economy. Labour, in its quest for a regimen that favours union members and workers, has struck out, successfully for the most part, to increase the heights of the hurdles that make up the employment steeplechase.

This is a rigorous test of stamina at the present time, but promises to be that much more challenging in the future. The laws will not reach the exacting levels of some of the labour demands that characterise Europe and some other developed countries, but SA is nowhere near economically mature enough to take the strain of these.

I am thinking of paid paternity leave, stretching to three years in Austria, and the fact that Spanish unions are up in arms because the government, as one of its austerity measures, is proposing a cut in severance pay for those retrenched to 33 days per year from 45.

We are a developing country, aspiring to be a development state, a circumstance that requires a flourishing economy, many more jobs, far better education and reliable health services. What is the point, therefore, of making employment difficult? So difficult, in fact, that we cannot rely on people to improve productivity.

Last year, in their quest for “decent” jobs, the unions subjected SA’s economy to a loss of almost 30 million working days. This represented a 50 percent increase from 2010, while in 2009, the number was only one million.

The fact that this increase, and the extra-inflationary wages that resulted after the strikes, should have accompanied the effects of the global recession makes the situation that much more serious.

The concerns of the business community cannot be dismissed as characteristic antagonism to labour. They are reasoned responses to foreseen consequences that have become increasingly apparent in recent times. Business holds the view that the amendments are mostly unnecessary.

Proper enforcement of the existing legislation and efficient management of its requirements would successfully eliminate many of the workers’ concerns.

Instead, we are to be subjected to new demands which will impose an even greater burden on the Department of Labour.

If it has lacked the capacity hitherto, one wonders how it can be thought that extra bureaucratic and control provisions will bring about improvement.

When the Durban Chamber of Commerce hosted the World Chambers Congress several years ago, many visitors expressed surprise at the fact that, whereas in their countries the norm reflected a relationship between government and business, SA’s government has an alliance with labour.

In recent times, Cosatu has been active in moving government as far to the left as possible. The manifestation of its success is reflected, not just in words, or even in enforcement, but in demonstrations, strikes and protests, and, significantly, amended laws which favour the unions.

In our business circles there is frequent discussion about how business should seek more influence over government decisions.

Well, considering that the ruling party has an alliance with the SACP and Cosatu – not just a relationship, but an alliance – there is slim chance of making headway.

In the wake of these legislative changes, business will adapt. There will be wailing and gnashing of teeth, but the innovation of the private sector will prevail.

The plethora of economic opportunities in the country and continent will stimulate, and momentum will be gained in the cycle of growth that lies ahead.

But the objectives of the development state may be missed and job creation inhibited by the need of business to find another way of competing.

It is such a pity, because if we could find the way of acting in concert to achieve growth, it would be greater and more people would benefit, including the millions who are unlikely to find employment where this is impeded by stringent regulation.