Legal heads tackle unemployment

September 1st, 2013

By Nomfundo Manyathi-Jele

The 26th annual labour law conference was held at the Sandton Convention Centre last month. This year’s theme: ‘Employment, the economy and growth: The implications for Labour Law,’ examined the impact of the prolonged global economic crisis on labour law and the need for the South African economy and labour market to develop tools to address these challenges. The conference was jointly organised by the universities of Cape Town, the Witwatersrand and KwaZulu-Natal.

Speakers at the conference included Judge President of the Labour and Labour Appeal Court, Basheer Waglay, governor of the Reserve Bank, Gill Marcus and the deputy director-general for labour policy and industrial relations at the Department of Labour, Les Kettledas.

Judge Waglay delivered the official welcome and opening address where he highlighted the issue of youth unemployment and also spoke about the changing role of the labour court system. He said that the South African youth found it difficult to secure employment.

He said that the labour courts were facing the judicial challenge of how to balance rights with decent work while recognising business competitiveness and added that the country already had a relatively stable framework that should provide for stability.

Judge Waglay said that, traditionally, fair labour practice was the sole responsibility of the labour court. ‘This responsibility for fair labour practice originates from the Constitution and is shared by the Commission for Conciliation, Mediation and Arbitration (CCMA) and bargaining councils’, he said. Judge Waglay said that because labour practices were continually evolving, new laws needed to be created to deal with this changing type of worker. ‘This means that the labour court system now has to deal with issues arising from labour matters which it did not have to deal with previously, such as employee-related fraud’, he said. Judge Waglay further said there should be no room for violence and intimidation as the Constitution provided a framework for parties to protect their interests, in the form of the courts, the CCMA and collective bargaining that created a platform for discussion and debate.

Mr Kettledas presented the ministerial address on behalf of the Labour Minister, Mildred Oliphant. During this address, he indicated how the Labour Department viewed the current labour unrest. Mr Kettledas said that the International Labour Organisation’s Global Employment Report of 2012 indicated that 400 million jobs would be needed in the next decade to avoid a further increase in unemployment, adding that in many regions there had been a growth in the number of workers who were in vulnerable employment and the majority of these workers were women.

Mr Kettledas said growth estimates for the South African economy had been revised downwards to 2%. He said that while there had been a small increase in employment in the first quarter of 2013, the number of unemployed had since increased even more. ‘There are now 4,6 million unemployed persons in the South African labour market and of these unemployed, about 2,3 million are discouraged work seekers, people who have given up hope of finding work,’ he said.

Mr Kettledas said at the end of March 2013, unemployment in South Africa was at 25,2%, adding that youth unemployment was at 41%. ‘We know that youth unemployment is a global problem, but in South Africa the scale of the problem is much bigger,’ he said. Mr Kettledas added: ‘The only bright light to be seen is that 646 000 jobs have been gained from early 2011 to the end of March 2013. But we should remember that 1 million jobs were lost during the recession in 2009’. He said that over the past three years, South Africa had experienced an increase in strikes and in the number of workdays lost due to strike action. He said that the average loss of workdays due to strike action had been 3 million over the 2011 to 2012 period.

‘In the context of these challenges, it is appropriate to reflect on the implications for labour law. One of the purposes of the Labour Relations Act [66 of 1995] is, after all, to advance economic development. The same purpose is contained in the Basic Conditions of Employment Act [75 of 1997]’.

Mr Kettledas said that, while labour legislation should support economic growth and employment, it was important to recognise that the law was not focused on securing employment for people. He added that labour legislation was mainly concerned with providing employees with basic protection against unfair labour practices, unsafe working conditions and a decent living wage.

Mr Kettledas said that there had been many calls over the past year for a review of labour legislation and that ‘many seem to think that simply changing the law will solve all our labour market problems’. He added that it was not that simple. ‘Labour relations involve buyers and sellers in a highly contested terrain. In South Africa, this terrain still bears the burden of a legacy of oppression and racial discrimination and there continues to be extreme income and wage inequalities,’ he said.

Mr Kettledas said that achieving the necessary social and economic objectives will be a challenge that goes well beyond the law, particularly given the competing interests of reducing mass unemployment, raising living standards and closing the earnings gap.

He said that South Africa was currently in the middle of a major process of amending a number of labour laws and introducing a new Employment Services Bill 38 of 2012. He added that the Basic Conditions of Employment Amendment Bill 15B of 2012 was passed in the National Assembly in June this year and that the Labour Relations Amendment Bill 16 of 2012, the Employment Equity Amendment Bill 31 of 2012 and the Employment Services Bill were still in the parliamentary process.

Mr Kettledas said that in July Minister Oliphant released the Unemployment Insurance Amendment Bill 35 of 2012 for tabling in the National Economic Development and Labour Council and for public comment. He added that the Labour Department was also working on amendments to the Occupational Health and Safety Act 85 of 1993 and the Compensation for Occupational Injuries and Diseases Act 130 of 1993.

Mr Kettledas said that the legal amendments were intended to have two effects; to improve security of employment for vulnerable workers and to improve social protection. He said that the proposed amendments to the Unemployment Insurance Act 63 of 2001 aim to extend the coverage of the Act in order to improve benefits and the legal framework for active labour market measures.

Mr Kettledas said the events of 2012 were a reminder of the difficult history of labour relations in South Africa. He said the strikes in the mining and road freight sectors and the protest action by farm workers in the Western Cape were a reminder of how important labour relations were to the country and to the economy, adding that despite these setbacks, South Africa should not lose sight of the progress made in the labour relations system.

He said that last year’s events highlighted the critical need to –

  • strengthen respect for our legal dispensation;
  • ensure adherence to processes and procedures that govern labour relations on a day-to-day basis in workplaces; and
  • pursue fundamental rights in the workplace.

Mr Kettledas said: ‘This is not a challenge for labour law. It is a challenge to better implementation of law, improved understanding of law and upholding the values that underpin our law – including the value of dialogue and non-violent solutions to workplace conflict. In dealing with these challenges, labour law will have to provide the framework within which solutions are found. Our laws can also serve as a resource to assist in resolving problems, but it will not be a magic bullet. If we lean too heavily on legal solutions to what are fundamentally social and socio-economic challenges, we will not be creating sustainable solutions.’

Governor Marcus delivered the keynote address on ‘Employment and the economics of job creation’ in which she outlined the relationship between the economy and the labour market. She said that South Africa has had an unemployment crisis for the better part of three decades.

Governor Marcus said that, following the enactment of the Labour Relations Act, the number of days lost to strike action fell sharply with about one million strike days a year on average from 1996 to 2007. ‘Since 2007, however, the number of strike days lost have increased sharply and strike activity has also become more violent. More recently, there has been a sharp increase in illegal or unprocedural strikes. Today, many labour intensive sectors are characterised by high levels of tension, which are not conducive to investment, job security or employment creation’, she said.

Nomfundo Manyathi-Jele,

This article was first published in De Rebus in 2013 (Sept) DR 8.