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Made In Dagenham; Perfected In Newcastle? – “Over-Protective Labour Law Dispensation”

The search for what Jeremy Cronin of the SACP calls “a paradigm shift” in the functioning of the South African economy has attracted much heat and dust in the public debate around the clutch of proposed amendments to our over-protective labour law dispensation and the unveiling of the New Growth Plan of government. In the midst of the encouraging alterations in the tone of the rhetoric of the ANC, a movie about the struggle for equal pay for female workers in Britain in the late sixties, “Made in Dagenham” has hit the local circuit – adding tragi-comic historical perspective to the long, hard struggle for the rights of those who work for a living.

A paradigm shift is certainly needed. For too long the promises of dignity and equality (let alone food, water, shelter, access to healthcare and the right to pursue the occupation of one’s choice) guaranteed to all in our Bill of Rights have not matched the day to day experiences of a large part of the population who are unemployed work-seekers, no longer seeking work or worse yet, unemployable due to their lack of proper education and training in the skills necessary to find a job in our modern economy. The experiences of employers, including the state, have also not been happy of late. Long running and violent strike action, some of it illegal and therefore unprotected, does nothing to promote South Africa as a suitably safe haven for foreign direct investment. The rapid shrinking of this type of investment in the last year is cause for concern.

The labour dispensation with its endless red tape, centralised bargaining councils system and guarantees of “fair labour practices” which are not properly and even-handedly dealt with in devilish detail of the labour laws at present in place, does little to encourage the creation of new jobs in the private sector. The private sector is the main driver of the creation of wealth in the nation; public enterprises, organs of state and the public administration itself do not contribute directly to the creation of wealth, but they can help indirectly by creation of fully functional infrastructure in, for example the education, health, housing, electricity supply and transport sectors. Public enterprises like the SABC, SAA and Armscor seldom turn a profit. The public sector can and should however oil the wheels of commerce and industry by delivering properly trained, healthy, adequately housed and safely transported workers into the economy to boost production and generate greater tax income for the nation.

The dysfunction in the labour dispensation is best illustrated by the experiences of the Chinese Chamber of Commerce in Newcastle, Kwazulu-Natal. A few hundred factories employ around 20,000 textile and clothing workers from the town and its surrounds and try to compete in the marketplace with cheap imports from China. To do so, they are obliged to pay wages lower than the minimum prescribed by the relevant bargaining council. The workers of Newcastle agree with the ANC spokesman Jackson Mtembu that there is no dignity in having no job, so they accept wages that are below the minimum agreed between unions and employers at the bargaining council. As a result they are lifted out of the grinding poverty of the jobless and are on the first small (illegal) step to living the success story of the new South Africa.

The bargaining council is having none of this, it has put the Chinese Chamber of Commerce to terms to pay the minimum or face litigation. The quite foreseeable response is a threat to close down the factories, retrench all employees and relocate the businesses to either Lesotho or Swaziland, where the freedom to sell one’s labour at an agreed rather than an imposed rate still exists. The factories of Newcastle simply can not afford to pay the rates laid down by the bargaining council. They could perhaps pay an economically realistic minimum and offer productivity bonuses.

The challenges that are posed by the looming “shape up or ship out” deadline demand a paradigm shift. Centralised bargaining via remote and disinterested bargaining councils seems to be a feature of the impasse that has not enjoyed sufficient scrutiny yet. The bargaining councils have been around for a long time, they were invented by a Smuts government in the wake of the Rand revolt of the twenties, and they seem to be accepted as a given. But are they serving the greater good with machinations that will leave 20,000 workers in full employment jobless after the Chinese factories decamp? Do those who are fully prepared to work for less than the minimum wage prescribed have no rights of their own in the matter? The exacerbation of inequality under and because of the present labour regime is one of the major failings of the new South Africa. Is it fair to the masses of unemployed work-seekers that they should remain idle until decent work at the unrealistically inflated prescribed wage somehow magically becomes available to them? The hell in which they live may well freeze over before any decent work appears. What of the freedom of association of employers and the right to pursue the occupation of one’s choice guaranteed to all in the Bill of Rights? Those workers in Newcastle who lose their meagre pay-packets, when the Chinese Chamber of Commerce is no more, would surely prefer their current status, dignity and ability to provide for their families to the fate that awaits them in the world of unemployment still inhabited by far too many of the poorest of the poor in South Africa. Can there possibly be any warrant for allowing the rights of those in employment, at the cushy and often unaffordable, inequitable minimum wages that they are paid under bargaining council determinations, to trump the rights to dignity, equality, pursuit of a career, freedom of association, freedom of contract and the ability to access all socio-economic rights via their own sweat of the unemployed or indeed those employed “illegally” in Newcastle?

A challenge to the constitutionality of the determination by the bargaining council concerned could be mounted by the Chinese Chamber of Commerce in Newcastle. All conduct that is inconsistent with the Constitution is invalid. The conduct involved in setting impossibly high minimum wages that would force the closure of the Newcastle factories infringes all of the rights of the workers and employers who are affected in the ways suggested above. The course of action upon which the bargaining council is embarking with its deadlines for compliance could be interdicted until the Constitutional Court finally determines the legality and constitutionality of the structural framework of the labour laws, and in particular the draconian powers given the bargaining council, that allow the stand off in Newcastle to exist.

Alternatively, the new Minister of Labour, Mildred Oliphant, could ask her drafting team, who are busy tinkering with the unconstitutional aspects of the raft of anti-labour-broking bills at present on their way to NEDLAC – for decent burial there, to take a long hard look at the big picture instead of simply focusing on the rights of workers and the preferences of unions. The big picture shows that too little is being done to respect, protect, promote and fulfil the rights of the unemployed in the interests of keeping the employed in so-called “decent work”. This is not sustainable. The tipping point at which the unemployed express their views in anti-social ways can not be too far off. There are ways of creating labour practices that are fair to the employed, the employer and to those in society who are unemployed but seeking employment. This is the paradigm shift that is needed.

Paul Hoffman SC
January 2011

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