Business Day
*Pragmatic reform of labour legislation needed urgently **Halton Cheadle, Peter le Roux and Clive Thompson, Business Day, Johannesburg, 15 November 2011*
THE performance of SA's labour market and one of its key props, labour law, are the subject of criticism and for the same reason: dismal outcomes. The attacks come from left and right, so the prescriptions for reform run in opposite directions.
Earlier this month, Congress of South African Trade Unions general secretary Zwelinzima Vavi reported to French President Nicolas Sarkozy that SA is the country with the highest rate of unemployment among middle-income countries and with the highest rate of inequality in the world. He could have added that it is blighted by possibly the highest strike rate as well.
For more than 20 years, November has been a time when the three of us (and some others) have collected our thoughts on the state of labour law and offered a synopsis to audiences around the country. What has changed in that time is that the political order and its ensuing legislation have become legitimate. What has not changed is a lack of consensus on the formula for productive workplaces.
Law is a distinctly secondary force in the making of social outcomes but it still has an important effect. Given the mixed and even disappointing results of the 1995 Labour Relations Act (LRA), we have to keep reconsidering. We have some thoughts, some of which are lofty and others pragmatic.
The 1995 LRA was designed to promote fairness, rationality and a higher level of co-operation across the labour market, from industry forums down to individual workplaces. It gives expression to the relevant sections of the bill of rights and it meets international labour standards. There can be no doubt that back in the 1990s, the new legislation helped to stabilise workplace relations: industrial conflict in the second half of that decade was dramatically down on the first. The National Economic Development and Labour Council played the role of patrician, providing policy leadership, all-party cohesion and not a few guides. The Commission for Conciliation, Mediation and Arbitration (CCMA) and the Labour Court did then and continue today to do sterling work in guaranteeing fairness and rationality, and damp ing down what would otherwise be still higher levels of discord.
Given the state of labour relations and economic performance today, is it the design of the law that stands exposed? Are its provisions too rigid, hampering market responsiveness to global and domestic needs? Or is its orbit too narrow, failing to reach out and protect those in the informal and atypical employment sectors? Our sense is that it is not the structure of the law that is wanting (accepting that no law can do everything anyway). Rather, the stumbling block takes the shape of a lack of social receptiveness to a key part of the LRA's scheme, made worse by the inability of national macroeconomic policies to deliver sustainable, employment- boosting growth.
While the institution of collective bargaining was robustly asserted in the 1995 LRA, provision was also made for a second channel of industrial relations. Parties were invited to form workplace forums, platforms to foster trust and workplace productivity. Collective bargaining and the dispute resolution structures of the LRA cannot carry the weight of labour dynamics in this unequal society in the absence of the embrace at least of the philosophy underlying the second channel.
This last observation is linked to another. For so long as employers and unions see the workplace as simply a site of struggle, South African business will never be able to prosper domestically or compete internationally. Whether one is dealing with the public or private sector, more efficient ways of organising work and delivering goods and services have to be a priority. If the debate between labour and capital is confined to the distributive element of collective bargaining, no real progress can be made.
A new social compact is needed for this to be achieved. This cannot be limited to the top-tier actors; it must reach down to the workplace leadership as well. It should not be so much a compact in relation to wages but on workplace culture, productivity and reform.
But, away from that grander agenda, several areas of the law deserve a rethink as well. Let us deal with an area of outright pathology first. SA cannot afford the level of conflict associated with failed collective bargaining in the public sector. The consequences for society are not only expensive, they are fatal. Nor do workers enjoy any net financial gain; they end up worse off. An end to volatility in this sector is not in sight. There is, however, a voluntary remedy available until saner perspectives prevail. The parties should consider agreeing to submit all economic disputes to arbitration for a respectable period, say three years. The record out of Canada shows that arbitrated outcomes in the public sector track negotiated outcomes very closely, but without the costs of industrial action. While the exercise of power does have an important role to play in underpinning the bargaining process, for now, in SA, that role has become utterly dysfunctional.
Ireland also offers a suggestion on how better to regulate potential conflict in public sector bargaining. The parties should be required to enter into comprehensive agreements regulating all contingencies in the event of industrial action. This should go much further than a mere set of picketing rules, covering all the possible consequences of disruption. It should leave space for the legitimate exercise of power while clamping down on its illegitimate expressions.
Violence in private sector labour relations has also reached new post-1994 heights. Here, too, there is a need to introduce procedural obligations that go beyond pro-forma picketing rules. And a case can be made for the right to industrial action to be open to suspension by the Labour Court if that action is accompanied by egregious conduct.
A second area for pragmatic reform relates to unfair dismissal. Given a history of arbitrary management decision-making, it was appropriate for the then Industrial Court to introduce stringent rules in relation to pre-dismissal hearings in the 1980s. That time has now passed and the cottage industry associated with predismissal inquiries needs to be closed down. The CCMA's imminent Guidelines on Misconduct Arbitrations will assist, but perhaps the adoption of US arbitrators' approach of dispensing with the requirement of all forms of predismissal hearing (at least as a legal requirement) is what is needed.
Third, SA is not dealing merely with a dual labour market but one that is sliced and diced into multiple segments. Collective bargaining processes and outcomes need to reflect that diversity. The recent agreement on a tiered wage structure in the clothing sector represents pioneering and necessary flexibility in the approach to bargaining.
Fourth, the abuse of contract labour does not justify outright prohibition. The abuses of contract labour can be prevented by appropriate regulation.
Even disgruntled players need to recognise that contract labour is now ubiquitous and is sometimes a useful feature of labour markets across the world.
However, all of these prescriptions --- and other amendments to legislation that might soon be in the offing --- will count for very little if a broad consensus on the need to transform the workplace culture is not actively pursued and achieved.
* Cheadle was the principal architect of the 1995 LRA. Le Roux and
Thompson are lawyers who have been engaged in the practice and
reform of labour law since the 1970s.
*From: http://www.businessday.co.za/articles/Content.aspx?id=158666*
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