Commitment Not a Commission

Labour Minister Tito Mboweni is pushing for yet another commission of inquiry. Instead, he should support the existing National Manpower Commission, argues Martin Brassey

DURING his keynote speech at last week’s Labour Law Conference, Tito Mboweni mooted a new commission of inquiry into labour legislation. “We need a Wiehahn Mark II”, was how he put it (though making it quite plain that a different cock would herald this new dawn).

On the face of it this might seem a fine idea. Industrial action is on the increase and industrial relations structures are badly in need of an overhaul. But there is one problem: the minister already has a commission of this sort — the National Manpower Commission. Over the last five years it has been trying to draw up precisely the sort of blueprint that Mark II might be expected to produce.

Mboweni is shrewd enough to know that, in matters of this sort, two is not twice as good as one. He must also know the risks he runs in sidelining the NMC. It may initially have been ineffectual, but it has become a macro bargaining forum in which the major players can, and do, negotiate over national industrial relations issues.

Putting another commission on its turf cannot be interpreted as a snub. To contemplate alienating these interests, the minister must believe that the NMC cannot deliver the goods.

The goods he is seeking, reasonably enough, are full employment in a flourishing economy. In his speech he made this plain — on several occasions he expressed his concern for the unemployed, who now comprise about half our national work force. As an economist, he knows that excessive regulation can contribute to this problem and, as a politician, he must know that the NMC would be the last to admit that it is doing so. The NMC represents the groups with the most interest in regulation — big capital and big labour — and small entrepreneurs and the unemployed go unheeded there.

Pivotal to this reasoning, of course, is the suspicion that over- regulation is stifling our economy. Is this justified?

Some of the current regulation is the product of collective bargaining in industrial councils. To understand how much it is important to appreciate that collective bargaining, whether central or local, is in itself no breach of free enterprise principles — indeed, being voluntarism writ large, it is arguably its apogee. The breach, if breach there is, lies in the statutory extension of central bargained agreements to non-parties. Since this is impermissible unless the parties represent the majority of those affected, the system can be justified as reflecting majority will.

But its merits, whatever they are, are by the way. Much more important is the fact that the extensions hardly matter in practice. Outside the metal, clothing and related industries few industrial council agreements are extended, and within those industries exemptions from them are liberally granted. Given the passion with which unions embrace this system, so modest an invasion of voluntarist principle should be tolerable even to avid free marketeers.

Wage determinations — statutory minimum wages fixed by state appointed wage boards — are harder to stomach. They make sense in an economy in which unemployment is minimal or in which the jobless receive welfare. Then they provide a means of redistributing wealth from rich employers to poor employees. But in a society like ours, in which the competition for jobs is acute, indeed desperate, they can seem cruelly protectionist, advancing the employed haves at the expense of the unemployed have-nots.

In theory there is a case for their abolition, but in practice the problem is rather more complex. For one thing, they command significant support in the labour movement. For another they represent our compliance with the International Labour Organisation Convention governing minimum standards machinery, one of the few we have ratified.

But most significant of all is the fact that, like extensions, they scarcely matter. Their effect on wages is trifling since the levels they set are well below the going rate.

Equally inconsequential, one suspects, is legislation governing basic conditions of employment: in most cases it sets standards of which only the sweat shop proprietor could really complain. Other welfare measures – – such as those governing work place injuries, unemployment insurance and job security — bite rather deeper, but they are still minimalist by international standards. Without them, we would be a society at once brutal and unstable, hardly the kind of place in which free enterprise would flourish.

The political climate is hostile to deregulation, but even if it were not, there would still be good arguments against it. Greater flexibility may be necessary, but the abolition of minimum standards is as undesirable as it is unlikely. We must seek a solution to joblessness elsewhere, and within the present context, it seems to lie in a reform of our collective bargaining structures to make them more flexible and comprehensive.

These are, needless to say, precisely the sort of reforms that the NMC is best equipped to undertake. The commission’s members are the primary users of the system. Who better than they to reform it?

Ultimately, the minister is going to have to work with the NMC. If he does so grudgingly, he will be the loser, and so will we. If the NMC merges with the National Economic Forum, the logical next step in its development, it will become a body of considerable influence and great potential. Within it business and unions will be negotiating with each other over important issues of labour market policy. If they strike partisan deals, as well they might, the government will be there to inject the requisite corrective. Out of its deliberations will emerge consensus of precisely the sort that this government says it endorses. We need to support this body, not undermine it.

In short, Mr Minister, there is no need for another commission, just a proper commitment to the one we already have.

* Martin Brassey is professor of law at the University of the Witwatersrand

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