The SA Institute of Race Relations (IRR) published a 10-point plan on Wednesday to tackle South Africa’s mounting unemployment crisis.
The IRR said that South Africa’s very high unemployment, which had risen from 3.67 million in 1994 to 8.74 million this year, necessitated a series of radical steps.
“Job security for some has been achieved at the price of unemployment for others who might have benefited from a more adaptable and flexible regulatory environment,” the IRR said in a statement.
“Joblessness on the scale currently prevalent in South Africa represents a colossal loss in economic output.”
The IRR added that its proposals were designed to “curtail violence, replace coercion with democracy, lower barriers to market entry, and remove obstacles to the engagement of workers”.
Unskilled people without education or capital had nothing to sell but their labour and all the artificial restrictions – such as minimum wages – preventing them from exploiting their only asset should be removed, in the IRR’s view.
Dr Anthea Jeffery, head of policy research at the IRR, explained ten labour market reform points of the suggested IRR plan to Fin24:
End strike-related violence
Very often strikes go on longer than they otherwise would have, explained Jeffery. This is due to intimidation or an incitement to violence or even attacks on non-strikers as important factors.
“Yet we are not aware of any successful prosecutions in this regard,” said Jeffery. “We, therefore, want those responsible for attacks or incitements to be prosecuted privately with help civil society if government does not.”
The IRR also wants to see that as soon as a strike turns violent, it loses its protected status so that workers can be dismissed.
“That would be a very important incentive to trade unions to make sure strikes are not marred by violence. We believe unions should be held liable. It would just make it that much easier to bring civil action against unions,” said Jeffery.
Require secret pre-strike ballots
This proposal was recently dropped from proposed labour relations legislation, according to Jeffery.
“We know there is intimidation, so let’s make sure from the start and before a strike begins that there is real support for it. Let a two-third majority enable a strike to enjoy protected status,” said Jeffery.
Protect property during strikes and pickets
The IRR wants unions to ensure what they do does not result in damage to property.
“We argue that there is a Constitutional Court judgment which provides for unions to be sued for damage during a strike. It should not only be compensatory, but also punitive in order to create an incentive for unions to make sure that when they call a strike it does not lead to violence,” she explained.
Limit the scope of protected strikes and pickets
Jeffery explained that the Labour Relations Act protects secondary strikes, while the IRR is of the view that protection should only apply between workers and their employer.
If, for example, there is a strike at a particular company, workers from another company should not be allowed to picket.
“We say only those workers at that particular work place should be allowed to go on a strike and only at that company’s premises,” said Jeffery.
The IRR would also like to see an end to protection for so-called general socio-economic strikes.
“Strikes in SA have reached levels much higher than rest of world, so we want to take away this right to socio economic strikes. It makes our labour market much more off-putting to investors and prevents more jobs from being created,” she said.
End the closed shop and make unions collect their own subscriptions
The IRR would like to see and end to companies deducting union membership fees from wages.
“Rather let unions persuade people to pay their subscriptions and make it directly payable to unions. This would improve the accountability of unions to their members,” said Jeffery.
Furthermore, under the Labour Relations Act a union is allowed to demand that all those employed at a certain company must belong to it and that a non-union member can’t get a job.
“Employers should be able to employ regardless if someone is a union member,” said Jeffery.
Stop extending bargaining council agreements to non-parties
Under the LRA it is possible for employers and unions to enter into a Bargaining Council agreement which not only applies to those organisations, but to all in that industry. It favours big employers at the expense of smaller ones and make them uncompetitive, explained Jeffery.
Give people back their right to work
“In essence, people who are poorly skilled and lack capital really can only exploit their ability to work, but in many cases they cannot because of bargaining council agreements,” said Jeffery.
This makes it difficult for companies to take on more staff, for instance, workers who would otherwise have no work at all.
“Not only Bargaining Council wage agreements, but also minimum wages impact job creation as it makes it impossible for people who would like to work to get a job at all. Our wages are often too high, especially at entry level, for inexperienced workers who are not productive,” said Jeffery.
“We must get out of that situation if we want to stop locking people out of the labour market.”
Allow dismissals and retrenchments to be governed by employment contracts
The LRA is very onerous regarding dismissals, said Jeffery.
The CCMA had 667 cases every working day in 2013, for instance and it makes it very time consuming for managers.
“Especially for small firms where we have to look for job creation we say remove these restrictions. We say let employers and employees agree about notice and put it in the contract,” said Jeffery.
“It is always risky to employ people, to know if there will be future demand due to economic changes and if a person will be able to do the work.”
SA has 26% unemployment and in Brazil it is 6%. In Jeffery’s view it is because it is there easier to fire someone, but then also easier to hire someone.
Remove new restrictions on temporary labour
Jeffery said temporary employment has been growing in SA because of various restrictions.
“There is often a need for more flexibility and changing conditions, yet, our laws are not allowing it,” she said.
“Our current laws harm rather than help the youth and new entrants to labour market. We say those restrictions should go and Government should welcome private placement agencies, as they help with employment.”
Stop fighting the private sector
Jeffery said there seems often to be hostility to the private sector in the ranks of senior ministers, especially those in the Communist Party with ideological hostility to free market.
“We see increasing regulatory constraints on businesses. We need to end that hostility if we were to see the private sector thrive and offer more jobs to millions of unemployed,” she said.
The IRR has presented its proposal to a number of Government departments and wants to show why it is important not just to keep on going the current way.
“We need to look at change. Our wages are too high, our dismissal costs are too high and we need to start acting on this recognition,” she said.
Fin24
The IRR said that South Africa’s very high unemployment, which had risen from 3.67 million in 1994 to 8.74 million this year, necessitated a series of radical steps.
“Job security for some has been achieved at the price of unemployment for others who might have benefited from a more adaptable and flexible regulatory environment,” the IRR said in a statement.
“Joblessness on the scale currently prevalent in South Africa represents a colossal loss in economic output.”
The IRR added that its proposals were designed to “curtail violence, replace coercion with democracy, lower barriers to market entry, and remove obstacles to the engagement of workers”.
Unskilled people without education or capital had nothing to sell but their labour and all the artificial restrictions – such as minimum wages – preventing them from exploiting their only asset should be removed, in the IRR’s view.
Dr Anthea Jeffery, head of policy research at the IRR, explained ten labour market reform points of the suggested IRR plan to Fin24:
End strike-related violence
Very often strikes go on longer than they otherwise would have, explained Jeffery. This is due to intimidation or an incitement to violence or even attacks on non-strikers as important factors.
“Yet we are not aware of any successful prosecutions in this regard,” said Jeffery. “We, therefore, want those responsible for attacks or incitements to be prosecuted privately with help civil society if government does not.”
The IRR also wants to see that as soon as a strike turns violent, it loses its protected status so that workers can be dismissed.
“That would be a very important incentive to trade unions to make sure strikes are not marred by violence. We believe unions should be held liable. It would just make it that much easier to bring civil action against unions,” said Jeffery.
Require secret pre-strike ballots
This proposal was recently dropped from proposed labour relations legislation, according to Jeffery.
“We know there is intimidation, so let’s make sure from the start and before a strike begins that there is real support for it. Let a two-third majority enable a strike to enjoy protected status,” said Jeffery.
Protect property during strikes and pickets
The IRR wants unions to ensure what they do does not result in damage to property.
“We argue that there is a Constitutional Court judgment which provides for unions to be sued for damage during a strike. It should not only be compensatory, but also punitive in order to create an incentive for unions to make sure that when they call a strike it does not lead to violence,” she explained.
Limit the scope of protected strikes and pickets
Jeffery explained that the Labour Relations Act protects secondary strikes, while the IRR is of the view that protection should only apply between workers and their employer.
If, for example, there is a strike at a particular company, workers from another company should not be allowed to picket.
“We say only those workers at that particular work place should be allowed to go on a strike and only at that company’s premises,” said Jeffery.
The IRR would also like to see an end to protection for so-called general socio-economic strikes.
“Strikes in SA have reached levels much higher than rest of world, so we want to take away this right to socio economic strikes. It makes our labour market much more off-putting to investors and prevents more jobs from being created,” she said.
End the closed shop and make unions collect their own subscriptions
The IRR would like to see and end to companies deducting union membership fees from wages.
“Rather let unions persuade people to pay their subscriptions and make it directly payable to unions. This would improve the accountability of unions to their members,” said Jeffery.
Furthermore, under the Labour Relations Act a union is allowed to demand that all those employed at a certain company must belong to it and that a non-union member can’t get a job.
“Employers should be able to employ regardless if someone is a union member,” said Jeffery.
Stop extending bargaining council agreements to non-parties
Under the LRA it is possible for employers and unions to enter into a Bargaining Council agreement which not only applies to those organisations, but to all in that industry. It favours big employers at the expense of smaller ones and make them uncompetitive, explained Jeffery.
Give people back their right to work
“In essence, people who are poorly skilled and lack capital really can only exploit their ability to work, but in many cases they cannot because of bargaining council agreements,” said Jeffery.
This makes it difficult for companies to take on more staff, for instance, workers who would otherwise have no work at all.
“Not only Bargaining Council wage agreements, but also minimum wages impact job creation as it makes it impossible for people who would like to work to get a job at all. Our wages are often too high, especially at entry level, for inexperienced workers who are not productive,” said Jeffery.
“We must get out of that situation if we want to stop locking people out of the labour market.”
Allow dismissals and retrenchments to be governed by employment contracts
The LRA is very onerous regarding dismissals, said Jeffery.
The CCMA had 667 cases every working day in 2013, for instance and it makes it very time consuming for managers.
“Especially for small firms where we have to look for job creation we say remove these restrictions. We say let employers and employees agree about notice and put it in the contract,” said Jeffery.
“It is always risky to employ people, to know if there will be future demand due to economic changes and if a person will be able to do the work.”
SA has 26% unemployment and in Brazil it is 6%. In Jeffery’s view it is because it is there easier to fire someone, but then also easier to hire someone.
Remove new restrictions on temporary labour
Jeffery said temporary employment has been growing in SA because of various restrictions.
“There is often a need for more flexibility and changing conditions, yet, our laws are not allowing it,” she said.
“Our current laws harm rather than help the youth and new entrants to labour market. We say those restrictions should go and Government should welcome private placement agencies, as they help with employment.”
Stop fighting the private sector
Jeffery said there seems often to be hostility to the private sector in the ranks of senior ministers, especially those in the Communist Party with ideological hostility to free market.
“We see increasing regulatory constraints on businesses. We need to end that hostility if we were to see the private sector thrive and offer more jobs to millions of unemployed,” she said.
The IRR has presented its proposal to a number of Government departments and wants to show why it is important not just to keep on going the current way.
“We need to look at change. Our wages are too high, our dismissal costs are too high and we need to start acting on this recognition,” she said.
Fin24
