The draft Basic Conditions of Employment Bill, released this week, has raised the ire of business and labour. A compromise is vital if Gear is to stay on track. Madeleine Wackernagel and Ferial Haffajee report
THE next stage in the heavyweight battle to get the draft Basic Conditions of Employment Bill passed into law is set to make the negotiations around the Labour Relations Act look like a friendly joust. So say government insiders, who believe it is going to be more difficult because “this one’s about money”.
And lots of it. Evidence points to a 20% increase in business costs if the working week is indeed cut down to 40 hours as demanded by labour, and part-time employees are given the same benefits as full-time staff. The government won’t be spared either – higher staff overheads could have severe implications for the Budget deficit target.
The Bill, which calls for an average 45-hour working week to protect employees in industries where 52-hour weeks are common, was given the Cabinet’s stamp of approval this week, which is about the only stamp it got, with cries of foul coming from almost all corners.
The draft Bill will now go back to the National Economic Development and Labour Council for further consideration.
Business says the draft plan will make job creation difficult and will cost too much. Labour is fighting both the government and business on provisions for a 40-hour week, four months’ paid maternity leave and minimum standards of employment.
While nobody questions that labour should be protected from extreme working conditions, there are fears that too cast-iron a framework will impede the production process.
Says Tony Twine of Econometrix: “Issues of fairness have to be addressed but the general appropriateness of the legislation is worrying. We aren’t a very productive or efficient economy. And there are fears that a rigid labour market will make the attainment of Gear [government’s growth, employment and redistribution strategy] that much more difficult.”
This concern was echoed by Rudolf Gouws, chief economist at Rand Merchant Bank: “It would be tragedy if Gear were seen to fail because of the structure of the labour market – because costs imposed on business through employment standards and levies make it impractical to employ more people.”
The argument that a shorter working week will help to boost jobs is fallacious, says Democratic Party leader Tony Leon. “Every other country is moving towards greater flexibility, not less, because it has been proven that cutting the working week actually results in lower output and fewer jobs. In the ideal world of the International Labour Organisation (ILO) in Geneva this logic may apply but real-world experience points to a different outcome.
“South Africa is going against the grain of what every other country has demonstrated to be the reality – greater job flexibility creates jobs. We are in danger of having too much regulation and not enough flexibility.”
The government defends the Bill with arguments that it sets in stone better conditions than anything labour has enjoyed before. And it holds out the promise of flexibility by providing for various ways in which standards can be negotiated downwards in struggling industries or by consensus between unions and their employers.
But labour, especially the Congress of South African Trade Unions (Cosatu), is spoiling for a fight. Some Cosatu-watchers say this round is really about ongoing unhappiness around the market-oriented Gear strategy.
Now Cosatu is shifting the battle to the draft Basic Conditions of Employment Bill, which is easier to mobilise workers around because it concerns nuts-and-bolts issues like money – payment for Sunday work and maternity leave; as well as a shorter working week and better leave conditions.
Cosatu’s plan for a general strike on May 12 stands, though the federation’s most senior decision-making body, the National Executive Committee, meets today to run a fine-tooth comb through the Bill.
Cosatu’s biggest worry is the draft law’s suggestion of a 45-hour week. The federation is pushing for a 40-hour week, though most countries in the world work 48 hours.
ILO figures show that 53 countries have opted for the longer working week, while 42 countries, including China, work a 40-hour week.
Trends show that Western Europeans work between 35 and 37,5 hours every week; Australia is equally liberal with a 38-hour work week introduced 14 years ago.
But faced with rising unemployment and shrinking economies, unions are starting to show flexibility. Overtime, for example, is becoming more acceptable. Both Canada and the United States work a 42-hour week, though employees in the US manufacturing sector work the longest hours in the world when calculated annually because of short holidays.
Comparisons with South Africa are better made with emerging economies. Workers in the Republic of Korea and in Singapore are employed on a 47,5 hour week; those in Hong Kong work three hours less. In Latin America, the average working week is about 44 hours.
The ILO has no figures for African countries other than Egypt, where the working week is unusually long at 52 hours. ILO researchers say there’s a “virtual absence of debate concerning reducing working hours as a means to combat unemployment”.
Running a close second to Cosatu’s call for a 40-hour week is its demand for six months’ maternity leave, of which four would be paid and two unpaid. The government has recommended four months’ unpaid leave with state assistance; while employers go lower. They want three months’ unpaid maternity leave.
While the 40-hour week has many international examples to point to, Cosatu stands alone on its demands concerning maternity leave.
The ILO’s benchmark figure is 12 weeks. One in two of the ILO’s member countries has met this goal, while one-third of the rest provide 14 weeks or more maternity leave; and Italy’s laws are currently world best practice with provisions for five months’ paid maternity leave.