Programme Director
Leaders of Organised Business and Organised Labour
Academia
Labour Law Specialists
Distinguished Guests
Ladies and Gentlemen
Friedrich List, the 19th-century German economist, wrote in 1841
that - “It is a very common clever device that when anyone has attained
the summit of greatness, he kicks away the ladder by which he has
climbed up, in order to deprive others of the means of climbing up
after him”. Today, those that have been deprived have also learnt
something about this ‘common clever device’ – and that they need to
kick this ladder before ‘anyone has attained the summit of
greatness’.
Ladies and Gentleman, our people are restless, and as we have been
told before – ‘when you have robbed a man of everything, he is no
longer in your power, he is free again’. And we all know what that
means.
Can we afford to talk about legal compliance and competitive
advantage when our people continue to die in their workplaces at the
rate at which they are currently dying in mining and construction? Can
we talk about competitive advantage and legal compliance when our
people are working longer hours with less pay, no leave, no UIF, and no
permanent employment? We are leaving in a world where more workers are
earning wages that cannot even put food on the table. Workers are
increasingly unable to afford their own transport costs to be able to
work, let alone clothe and entertain their families. A Human Sciences
Research Council (HSRC) Student Pathways study has found that 50% of
students who enroll in higher education programmes do not complete
their studies and drop-out due to poverty and lack of finances –
costing government R4,5 bn in lost grants. 70% of the students who
drop-out are “extremely poor, with monthly household income between
R400 and R1 600”, and most of them are black. Can we therefore
afford to talk legal compliance and competitive advantage in this
context? The ladder has become shaky, and no one can attain the summit
of greatness.
My Department recently looked at the issue of minimum wages and its
effects on household poverty and we have found, through research
conducted by the Development Policy Research Unit (DPRU), that “wage
income is not a major income source for the poor”. The majority of our
people are increasingly reliant on state grants and self-employment.
Less than half of the poor and ultra poor workers will benefit from
minimum wages. This raises the issue of compliance, which I shall
return to later. Lastly and more importantly that, “the fact that poor
households are larger in size compared to non-poor households adds
further concern about the effectiveness of minimum wages in reaching
the poor. For every R1 gained in a poor household, over 5 people have
to share that income (approximately 20c each)”.
The study then concludes by reminding us of what we have always
known, and it is that “poverty levels are likely to decline if
employers comply fully with minimum wage regulations”. Allow me to add
to this conclusion and say that no employer can gain any competitive
advantage from employing hungry workers.
Bargaining Councils are also not creating any competitive advantage
for our workplaces. First their coverage is very weak. Studies show
that, according to the DPRU, whilst in 1995 about 15 percent of those
in private formal employment were covered by bargaining council
agreements – this had declined to 13 percent in 2005. This translates
to just over 1 million private sector workers. Secondly, similar to the
finding on sectoral determinations I mentioned earlier, there “did not
appear to have been any significant remunerative advantage associated
with bargaining council membership in either 1995 or 2005”. Therefore,
“in both 1995 and 2005, the aggregate estimates indicate that
membership of a bargaining council was not associated with higher mean
earnings”. In this same period, using statistics from the Labour Force
Survey, there has been an increase in the number of hours worked of
approximately 1.5 hours, from 47.6 hours in 2000 to 49.1 hours in 2005.
Productivity SA also points to a 3,2% per annum increase in private
sector productivity since 1996 – largely spurred by 3.6% labour
productivity Let me put this in another way - our people are working
harder, longer, for less.
Yet we continue to be told that our labour market is rigid and needs
to be reformed. We are told that we scare investors away and that our
labour force is not productive. How can our workers be more productive
when they have no means of coming to work in the first place? How can
they be more productive when they come to work on hungry stomachs?
Productivity depends on investment. It is only when we invest more in
our workers that we can demand more from them. We must realize our
goals of achieving a forty hour week; we must train our workers, and
must reward them accordingly.
When we promulgated the Labour Relations Act and the Basic
Conditions of Employment Act more than ten years ago, we had hoped that
ten years later, these problems would not be persisting. But clearly we
were wrong, and the actions of our people on the ground are confirming
this. In the last five years we have witnessed working days lost to
strikes increasing from 79 working days lost per 1 000 employees in
2003 to 753 in 2007.
In the last two months we have also seen our people being easily
misled into believing that their genuine concerns on poverty and
unemployment are caused by our fellow brothers and sisters from Africa.
Our own analysis on labour migration has shown that South Africa gains
economically from entry by fellow Africans. In 2004, based on figures
from Stats SA, spending in South Africa by visitors from Africa and the
Middle East exceeded the combined expenditure of visitors from the
Americas. According to the South African Tourism Strategic Research
Unit, in 2005 seven of the top ten spending countries in South Africa
where from SADC – Mozambique, Zimbabwe, Botswana, and Lesotho. It is
therefore a misconception to conclude that migrants steal jobs from
South Africans. The opposite is actually true. They are job creators,
first for themselves – and for the rest of us. However, the
rumblings by our people are all signs of a ladder beginning to shake.
People don’t want to hear carrot and stick anymore, because the carrot
is not working, now is the time for the stick to come out.
Researchers from the Sociology of Work Programme at Wits University
are telling us that “there is very little merit in the assertion that
they, qualified Blacks and women were not out there”. A separate study
by the HSRC has also found that our labour market continues to
discriminate against graduates from historically disadvantaged
institutions, thus choosing not to employ black graduates possessing
similar qualifications to their white counterparts. Therefore employers
must stop telling us that they cannot find any qualified black people
to employ.
Legal compliance, competitive advantage! How can that be, when 332
workers died in their workplaces in the last year and continue to die
even today - and many remain unregistered according to COIDA and
struggle to have their claims processed quickly and efficiently by the
Compensation Fund.
Compliance can no longer be an option when half of our workers – 5.8
million according to Stats SA – are not registered for UIF; and 4.1
million of them do not even have paid leave entitlement in their places
of work.
We must also regularise migration – which is predominantly based on
labour. It does not benefit anyone, whether it is an illegal migrant
labourer or an employer, to allow illegal migration to persist. It only
encourages exploitation on the part of the migrant worker and risk on
the part of an employer. We should encourage legal entry of fellow
Africans into our country, and ensure that all migrant labourers are
properly documented like any other South African, and that the laws of
the country should equally apply to them. After all the constitution
talks about everyone in a number of areas. The Labour Court recently
ruled that even undocumented migrants and refugees have the same labour
rights as enshrined in the LRA and BCEA if they are in a working
relationship. They are also protected by the Constitution. Everyone has
a right to fair labour practices. There is therefore no escaping
compliance by anyone, whether employing South Africans, legal migrants,
or illegal migrants.
Ladies and gentleman, let me however conclude by making a very
personal plea. The issues I have raised here are not about legal
compliance anymore. Neither are they about the labour market
exclusively. They are about human dignity, mutual respect, ubuntu
– all the ethos that we seem to all be increasingly forgetting in our
rush to climb up the proverbial ladder in pursuit of the summit of
greatness. It is only when we regain these values and abide by them,
both as employers and workers, that we can truly regain our competitive
advantage.
I thank you.
