ANC deputy president Cyril Ramaphosa is seen at the Banking Association summit in Johannesburg on Wednesday, 4 September 2013. Ramaphosa said business and the financial service sector had a critical contribution to make. The financial services sector needed to play a role in helping small to medium enterprises, as these would contribute to job creation. This could be done through small business incubator models, and helping these businesses gain access to finance. "Banks need to investigate feasible ways to extend credit to small and medium businesses," he said. Picture: Werner Beukes/SAPA
In the middle of December, Mineral Resources and Energy Minister Gwede Mantashe suddenly realised that “closed shop agreements” were not the most functional systems to introduce in the mining industry.
Closed-shop agreements allow an employer to sign an agreement with a trade union, disallowing any other trade union to muscle into the workplace.
The arrangement is restrictive as it forces staff to belong to a trade union and doesn’t give them a choice of trade unions.
The restrictive covenant can create all sorts of problems, with the obvious one being that an external trade union might be desperately trying to muscle in on the workplace. The move from an external trade union is sure to create an enormous amount of tension and unhappiness.
This was evidenced over the last six months of 2023.
In fact, the heavily fought battle between the National Union of Metalworkers of SA and the Association of Mineworkers and Construction Union has played out to the detriment of the mining industry.
Some people lost their lives, the employers lost an enormous amount of turnover and profit and the government, in turn, lost income tax on the profits. The idea of restricting the employment relationship to archaic arrangements, such as the closed shop agreement, is a negative all round.
Many trade unions in the closed shop arrangements became “sweetheart trade unions”. Unfortunately, the ANC government and its respective ministers have heavily favoured evasive legislation allowing for the sole recognition of a particular trade union.
The agreements arose out of the tripartite alliance where the ANC, Cosatu and the SACP structured themselves to try to control the economy.
Likewise, the forcing of businesses and trade unions to join bargaining councils have a similar effect to the closed shop agreements.
Small businesses have been, to a large degree, almost destroyed because of the nature of the bargaining council agreements and the extension of the agreements to small businesses in any particular industry.
To take this type of agreement one step further, it is again pointed out that forcing businesses and trade unions to join bargaining councils has a similar effect to the closed shop agreements.
Small businesses have been, to a large degree, almost destroyed because of the nature of the bargaining council agreements and the extension of the agreement to small businesses in any particular industry. The employment and labour minister has never understood the negativity of close shop agreement and bargaining councils.
Both the arrangements are archaic and hark from the early days of communism in the UK.
The whole world has moved on but South Africa is languishing in this negative style of thinking.
Even traditional communist regimes, such as China and Russia, have moved on and have embraced the modern economy.
We have the lowest employment in the world and the second lowest productivity.
The ANC has carefully guided us down a very steep, slippery slope. Things are so bad that even our president rejoices when a handful of jobs are created while millions are standing in the unemployment queue.
Even the unemployment queue is non-functional and the broken Unemployment Insurance Fund doesn’t seem to service anyone.
Taking this one step further, the National Minimum Wage Act has been similarly destructive to job creation. It has been almost impossible to implement it across the board and, similarly, it is proving impossible to enforce. The minister of employment and labour has reported on numerous occasions that the national minimum wage has been increasingly difficult to implement, and this is not surprising as he leads one of the worst performing departments in the country by every possible measure.
The minister reported that many thousands of workers were being paid below the national minimum wage but the government did not have nearly enough capacity in its inspectorate to enforce the wage. There are no meaningful plans to address this either, making the national minimum wage an unimplementable law.
The unfortunate situation is that once employers find themselves forced into a scenario of avoiding the national minimum wage, then the by-product of this is that they develop a higher appetite to not comply with all labour laws. The avoidance of the wage leads to employers considering avoiding all the other labour legal legislation, including the conditions as contained in the Basic Conditions of Employment Act.
Even the trade unions in the KwaZulu-Natal clothing industry have understood that the national minimum wage is detrimental to employment. Trade unions there have been largely silent when it comes to implementing the national minimum wage, knowing full well that should it be enforced, it would decimate the fragile economic conditions that allow the workforce in the sector to participate in the clothing industry.
The government itself has not seen its way clear to implement the national minimum wage with regard to its Extended Public Works Programme which is a remarkable contradiction in legal terms. The government has justified the non-payment of the minimum wage in this programme by saying that they could not afford to pay the full amount of the national minimum wage, yet the government somehow expects employers to afford this when in many instances, they are battling to turn a profit.
This highlights that job creation and having productive jobs are more important than strict adherence to a national minimum wage.
* Michael Bagraim.
** The views expressed here are not necessarily those of Independent Media.
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