Sipho M Pityana
RIGHT TO REPLY
Two articles by Howard Barrell in the Mail & Guardian of November 12 to 18 1999 present a misleading impression of what the government is doing in the labour market.
Barrell’s column, Over a Barrel, refers extensively to my address at the Institute of Industrial Relations of South Africa (Irasa) annual conference on November 4 1999, while another article on the Ministry and the Department of Labour formed part of a feature on “The people behind the Cabinet”.
At the outset it needs to be pointed out that, even though Barrell wrote as if he attended the Irasa conference, he was neither present at the event, nor did he apparently bother to read my statement, the theme of which was “labour law, employment and regulated flexibility”. Had he done so, he may have reached a different conclusion.
The central focus of the government’s labour market policy is the enhancement of the efficiency of the labour market as part of the overall strategy to improve the functioning of the economy.
The thrust of the labour laws introduced since 1994 has been informed by this very important consideration. In an environment of dynamic change and development in the world economy, an important balance has to be maintained between ensuring security and flexibility.
My statement to the Irasa conference sought to point out how the architecture of our labour laws maintains this important balance. I gave examples to demonstrate how this is achieved, pointing out the extent of flexibility in these statutes. For clarity, I highlight a few of the points made.
Firstly, the promotion of small business has an important place within the government’s strategy of economic growth and development. I believe that this is clearly reflected in the labour policies and laws adopted so far. Our laws have invariably included special provisions for small businesses or excluded them from certain obligations with the aim of assisting them to comply with our laws, while not undermining the rights of workers.
Under the Labour Relations Act, bargaining councils are able to grant exemptions on application, including small businesses. Our figures show that 85% of applications for exemptions are granted. In any given sector, not only are varying standards applied, but certain categories of businesses are exempted from some of the agreed provisions. The recent decision of the Minister of Labour, Membathisi Mdladlana, to vary certain conditions of employment for businesses that employ less than 10 people is in line with this approach.
Secondly, I raised the issue of the serious problem of youth unemployment. In this regard, I referred to evidence from other parts of the world on the wage factor as a barrier to entry in employment by the youth. I pointed out that the Basic Conditions of Employment Act (BCEA) makes adequate provision for this or any other category of employees to be given a special dispensation.
In the case of both small businesses and the youth, it is our view that special provisions cannot mean complete exemption from the scope of the various laws, which are an elaboration of our constitutional principles and consistent with our economic policy. This would imply we have a “two-tier” approach to the labour market, an approach with which the government would have no truck.
Instead, we are looking at the youth wage within the context of learnerships as outlined in the Skills Development Act. Similarly with small business, our approach is to provide them with access to training and to look at ways of improving the ease with which they can comply with the laws.
Thirdly, contrary to Barrell’s assertion, my statement highlighted the absence of evidence to show a significant correlation between minimum wages and increased unemployment. In this regard I referred to evidence in some countries, including the United States, where employment increased despite increases in the statutory minimum wage.
The purpose of this was to question the argument against sectoral minimum wages as envisaged in the BCEA. In support of my argument, I referred to the 1998 Organisation for Economic Co-operation and Development report which questioned the so-called conventional wisdom that minimum wage setting undermines employment creation.
My fourth point emphasised the importance of social partnership in the formulation and development of such policies and laws. Such co-operation in policy development ensures buy-in and legitimacy as well as more effective implementation. It is for this reason that it is hard to imagine why Barrell would suggest the Congress of South African Trade Unions (Cosatu) should be upset when the minister implements the law as agreed, following lengthy periods of negotiations.
The meeting between Cosatu and Mdladlana on the small business determination was amicably concluded. Any misunderstanding there may have been was clarified to the satisfaction of all concerned.
Finally, Barrell creates an impression that Mdladlana has introduced the small business determination through legislative amendment. This is not the case. It is through secondary legislation in the form of a ministerial determination.
Barrell’s recognition, at last, of the government’s common approach to labour market policies is most welcome. However, his assertion in the article “The people behind the Cabinet” that this is nothing more than Mdladlana following orders from his colleagues – ministers Trevor Manuel and Alec Erwin – is to trivialise the extensive efforts Mdladlana has undertaken to engage the social partners. This process is likely to result in his announcement before the year closes on where the process is going.
Sipho M Pityana is the director general of labour