Paarl La Concorde,
57 Main Road,
Paarl, 7646

Tel: +27 21 863 0830

Fax: +27 21 863 0906

OUR LABOUR DISPENSATION ISN’T WORKING

Dave Steward, Executive Director of the FW de Klerk Foundation:

NOTHING TO CELEBRATE ON WORKERS’ DAY

On 1 May, South Africa will once again celebrate Workers’ Day – although, in truth, there is nothing to celebrate. Our fractious trade unions are causing enormous damage to society, to the economy, to the unemployed and to the interests of workers themselves.

South Africa has one of the highest strike rates in the world – and our strikes are amongst the most violent. Between 2006 and 2011 an average of 507 working days were lost for every 1 000 South Africans in employment – compared with a global average of just 30.6 days per 1 000 workers during the same period.

The platinum strikes during the first half of 2014 cost R23 billion in lost production and R10 billion in lost wages.

The South African Democratic Teachers Union has been one of the main contributors to poor education outcomes – and does not hesitate to strike when school kids are about to write exams.

At the very moment when the country is struggling with the effects of load shedding – NUMSA has once again gone on strike at the giant Medupi power station.

Trade union sponsored limitations on labour broking will, according to the Free Market Foundation, cost more than 250 000 jobs.

Current public service union demands would add R50 billion to the government’s wage bill and would almost certainly lead to further down-grading by ratings agencies.

Our labour laws and hostile unions discourage foreign direct investment. According to the World Economic Forum’s Global Competitiveness Report South Africa’s cooperation in labour-employer relations was the worst of the 144 countries that were surveyed. Our hiring and firing practices were the second worst; we were in 139th position in terms of flexibility of wage determination; and our pay and productivity was 8th worst in the world.

The main victims of our militant unions are, however, the millions of unemployed South Africans who have been effectively locked out of the job market by rigid labour laws and by the high minimum wages set by the unions.

Our unemployment rate is far higher than the official 24.3% figure. Only 43% of the population – and only 39% of black South Africans – between the ages of 15 and 64 are employed – compared with 72% in a First World nation like Britain. Millions of South Africans have very little prospect of ever getting a job – with a devastating impact on their prospects for human dignity, for equality and for a better life.

Why are we doing so badly in the field of labour relations?

The first problem is ideological. Our unions are led by some of the last true believing communists in the world (despite the fact that only 6% of COSATU members are active SACP members). In June 2011, COSATU President Sidumo Dlamini declared that

“We are a Marxist-Leninist formation not in words but through our commitment to the struggle for socialism and in that context we encourage our members to fill the front ranks of the SACP and we subject ourselves to the discipline of communists.”

The communist orientation of COSATU played a key role in the evolution of the new South Africa. In 2006 COSATU took the lead in opposing President Mbeki’s GEAR policies, which it feared had been hijacked by capitalists. At its 9th Congress in 2006 COSATU launched a battle for the ‘heart and soul’ of the ANC. It resolved that “the working class must re-direct the National Democratic Revolution towards socialism and jealously guard it against opportunistic tendencies that are attempting to wrest it from achieving its logical conclusion, which is socialism”. It adopted an official position that “rejects the separation of the NDR from socialism and asserts that the dictatorship of the proletariat is the only guarantee that there will be a transition from NDR to socialism.”

This led to the most fateful development since 1994: the ousting of President Thabo Mbeki at the ANC’s Polokwane Conference in 2007, and the ascendency of Jacob Zuma and the SACP within the Alliance.

COSATU’s communist orientation has been one of the main causes of hostility between unions and management – mainly because communist-led unions do not really accept the right of private sector businesses to exist. The COSATU culture is dominated by struggle and resistance against management that is regarded as the ‘class enemy’. There may be temporary truces – but there is little room for the genuine cooperation that is essential for success.

There is also a dire lack of understanding of basic economics. Trade union leaders are steeped in Marxist gobbledygook but appear to have little grasp of the factors that have led to economic growth and the advancement of real wellbeing of workers throughout the world. The Free market Foundation used to offer an excellent basic economics course for workers that explained how companies operate in free market economies and why excessive wage demands and strikes were not necessarily in the interest of workers. Incomprehensibly, big business is no longer prepared to fund this programme.

Another problem is that there is no balance in the relationship between business, government and labour. Because COSATU is part of the ruling alliance it has been able to dictate the government’s labour policy. The result has been the enactment of labour legislation that is making it increasingly difficult for companies to generate wealth and to create jobs.

Labour expert Loane Sharp has suggested some of the steps that might be taken to restore the balance, including secret ballots before strikes to avoid intimidation; civil liability for trade union members who damage property or injure persons; and an end to closed shop agreements which force workers to join a union or to pay union dues as a precondition for obtaining employment.

At heart, what our labour dispensation is missing is the realisation that the interests of all parties will be promoted by genuine cooperation between labour and management. This will not happen while labour and management continue to regard one another as class and race enemies.

In particular, more should be done to give workers a genuine stake in the success of companies through share-holding schemes. Management should also show genuine commitment to the wellbeing of workers – rather than the enrichment of individuals through the current process of Black Economic Empowerment. At the end of the day it may well be true: there are no bad workers – only bad managers.

Dave Steward

04 May 2015