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The Minister of Labour is in denial

Posted in: Press releases
Date Added: 2014/08/20

PRESS RELEASE: The National Employers’ Association of South Africa (NEASA) – The Minister of Labour is in denial

20 Augustus 2014

The National Employers’ Association of South Africa (NEASA) disagrees with recent comments by the Minister of Labour, suggesting that  South Africa's labour legislation was not to be blamed for the prolonged and often violent strikes that have hit various industries across South Africa. Speaking at the recent 2014 Mining Lekgotla, Minister Mildred Oliphant said that the lack of real transformation in mining and persistent inequality across the rest of the economy, were the more likely drivers of labour instability and workplace discontent.

Whilst we agree that the current labour legislation is not a direct or the only driver of the violent strikes, one should not shy away from admitting that South Africa’s labour laws play a huge role in exacerbating unemployment, poverty and inequality. Employers all over the world respond negatively when governments over-prescribe to them how to run their affairs. Unemployment, poverty and inequality will therefore continue as a result of South Africa's labour law dispensation which is of a very interfering and prescriptive nature,' says Gerhard Papenfus, NEASA Chief Executive.  
According to the Minister a quick fix or an emotional solution to the country's bitter labour relations will not be sustainable.
'We agree with the Minister on this but there has been ample opportunity to consider fundamental changes which could stimulate business, especially SMME development, which would have resulted in addressing South Africa's biggest challenges. The latest changes to the LRA, apart from the cosmetic and technical changes and changes to appease COSATU, gave business very little to be excited about. The problem is that the ANC’s tripartite alliance partners, and to a lesser extend big business in NEDLAC, are the only ones to have the Minister’s ear,’ says Papenfus.

NEASA maintains that the current labour laws are detrimental to sustainable growth and development.

The strict laws on dismissals serve as a deterrent to job creation and, as an unintended consequence, also has a downward impact on wages. But under pressure from the alliance partners, government refrains from addressing this problem. Another issue is the fact that, although SMME’s play an absolute strategic role in government’s NDP-strategy, they have no voice in the LRA’s collective bargaining provisions. Changes in these areas will however require a huge amount of political determination. It will also require a willingness to differ with alliance partners such as COSATU and the SACP on these issues, as well as an urgent realisation that the broader South African’s interest must have preference over short term political convenience,’ Papenfus said.

During her address to the Mining Lekgotla, the Minister also said that the lack of real transformation, socio-economic equity, mutual respect and trust in the workplace have contributed to the anger and frustration that can be seen in the current industrial relations dynamics.
What transformation is the Minister referring to? Is she referring to the development of skills, improved education and the development of a new approach towards job creation? If that is what she’s referring to, we entirely agree with her. We suspect however that this is not what she means with ‘transformation’,’ Papenfus said.

NEASA also scoffs at suggestions that the strikes were more about the ever-increasing wage gap between management and workers and the 'appalling' living conditions of workers.
Research all over the world has shown that the more government intervenes in the workplace, the more inequality increases. The Minister is right when she says that laws are not the answer. But what she has in mind is to leave the current restrictive and unfriendly business laws unchanged, to bring no relief in this area and hope things will get better. It won’t. Doing nothing won't bring a different result,' says Papenfus.
Government’s continued excessive interference in the workplace is fuelling unemployment, poverty and inequality. South Africa needs to move in the opposite direction, towards less labour laws and less interference. This however requires a completely new mind-set, a new philosophy and a new understanding of the capabilities and constraints of business. Unfortunately, we’re not there yet,’ he said.
The Minister maintains that the primary goal of the labour market legislative framework is to create an enabling environment and tools to address the harsh reality.
The Minister is so right when she says that; and labour legislation may have succeeded in putting exorbitant and unequal power in the hands of trade unions. But the LRA is not an enabler of business and since it is not inviting employer creation, the act will ultimately fail in employment creation. Unless something drastic is done about it, our socio-economic challenges will increase. At some point we’ll have to face this reality and make radical decisions,' Papenfus said.

According to the Minister, the mediocre compliance with existing labour laws further contributed to the 'militant stance' of workers dealing with collective bargaining processes.
Where there is general mediocre compliance with laws, it is usually because such laws are against the common good of those affected. How can the Minister expect SMME’s to be enthusiastic about arrangements stemming from collective bargaining processes, when their powers are curbed as a result of bizarre and completely undemocratic labour law arrangements,' Papenfus asked.
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Sya van der Walt-Potgieter
Media Liaison

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