SAR, Vol 12 No 2, February 1997
THE ANC'S NEW EMPLOYMENT STRATEGY
BY IGHSAAN SCHROEDER AND MARLEA CLARKE
Ighsaan Schroeder is a labour educator working at Khanya College, Community Division, Johannesburg. Marlea Clarke is a member of the SAR editorial collective who is currently based in Cape Town. She is researching globalisation and the related challenges facing the labour movement.
"... we should not have called it an Employment Standards Act. We should have called it Employment Law"
(Labour Minister Tito Mboweni, commenting on the proposed new Employment Standards Act)
At first glance, Mboweni's comment appears to be a mere toss of words. In reality, it goes to the very heart of the new legislation. Far from setting labour standards as its name implies, the Employment Standards Act (ESA) is essentially about breaking them. Rather than defending and advancing worker rights as COSATU hoped the new law would do, the ESA is designed specifically to ensure "flexibility" in the South African labour market, and thereby to undermine labour standards.
The ideologues of the Labour Ministry regard the labour market in South Africa as being too "rigid," i.e., it forces too many employers to abide by labour standards negotiated by unions, or set by wage determinations and the Basic Conditions of Employment Act. They argue that the resultant higher labour cost makes local capitalists internationally uncompetitive. Since international competitiveness is regarded as the necessary - indeed the only possible - growth path for the economy, it follows that labour markets should be made more flexible, allowing for greater "free market" operations, and hence, increased competitiveness.
Not surprisingly, but still disappointingly for workers and what's left of the left in South Africa, the neo-liberal philosophy of labour market flexibility and competitiveness that informed the drafters of both the new Labour Relations Act and the state's recent macroeconomic strategy document, "Growth, Employment and Redistribution," has also shaped this new legislation. To meet the presumed imperatives of globalization, legislation will be passed to assist in enticing multinationals to locate here ... while also convincing national companies that labour costs are as cheap in South Africa as they are elsewhere in the region. This race to the bottom may in fact create more jobs, as the government argues, but the question is: what kind of jobs? Less full-time, protected, unionized jobs, and more vulnerable, unprotected bad jobs? Chances are, workers will be forced to work longer and harder so business can make higher profits more easily.
Challenging this proposed legislation does not appear to be an easy task for labour. But if workers are to find ways of resisting this accelerated accommodation to neo-liberalism, key questions must be addressed and debated. Most important, perhaps, is the need to understand the contents and potential impact of the proposed legislation. Why the imperative of greater flexibility? How will the ESA achieve and ensure flexibility? And what are the likely consequences for the working class?
Key components of the new Employment Standards Act
First released in February last year as a "Green Paper" (a draft bill for comment and debate), the draft bill under discussion (the Employment Standards Act) is part of the ministry's five year plan to reform the South African labour market and revamp labour legislation. This legislation will replace the existing Basic Conditions of Employment Act and the Wage Act. Emphasizing that the old acts "are too rigid and restrict the productive arrangement of work and working time which hampers productivity and efficiency," the Labour Minister states:
"New legislation must recognize that South Africa's return to the international economy demands that enterprises compete with countries whose employment standards and social costs of production vary considerably. It must therefore avoid the imposition of legal rigidities in the labour market, provide greater flexibility and introduce more responsive mechanisms for variation from statutory standards."
In consequence, as the Green Paper states, new legislation must "seek to balance the demands of international competitiveness and the protection of basic rights of workers through a mechanism of `regulated flexibility'."
Legislating `regulated flexibility'
Labour market flexibility in the proposed legislation includes flexibility in both the organization and the use of labour. Overall, the push is for greater flexibility in working time arrangements, wage and employment flexibility, and job flexibility (often referred to as "functional flexibility"). In theory, these forms of flexibility, combined with the lowering of labour standards set out in the law as a kind of permissible "variation downward," are intended to ensure the rapid and effective response by business to market changes.
While the government andreak unions have agreed on the importance of training for workers, "functional flexibility" will likely have the effect of de-skilling many workers. For example, legislation will allow for labour power to be used in a way not restricted by job descriptions by having workers perform jobs previously performed by a number of different workers. Although this can take a range of different forms, most often this means that workers are expected to carry tasks previously performed by numerous workers, or to operate more than one machine at a time.
Workers rightly regard this so-called "multi-skilling" as beingreak merely multi-tasking. Business or other proponents of multi-skilling argue that this leads to a real acquisition of skills and higher wages for workers. But this has not been the experience of workers elsewhere, and it is unlikely to be the case here. Why? First, workers are rarely formally trained to take on the extra work they are expected to perform. Second, it is not automatic that multi-tasked workers are compensated with wage increases. Moreover, even if workers are properly trained and do get wage increases, it is only a small number of workers who benefit - a development which is outweighed by the large numbers of workers who lose their jobs.
The proposed system of "regulated flexibility" - to balance, as stated, "the protection of minimum standards and the requirements of labour market flexibility" - means that the ESA will set standards and then allow for their variation downward. Variation is allowed for ordinary hours of work, overtime, meal intervals, rest periods, night work, public holidays, sick leave, parental leave and notice or termination. So, while the bill stipulates workers should work a normal working day of no more than 9 hours, it also adds that collective and individual agreements can be made whereby workers can work as long as 12 hours normal time. Thus, workers will not be paid overtime for the extra hours worked. In this way, the ESA introduces a form of wage flexibility.
This push for "flexible hours" to benefit the employer rather than the workers by facilitating a practice of longer hours for lower pay is boldly stated in the Green Paper: "This [flexible working time] allows the distribution of working time in a manner that may coincide better with the employer's demand for production ..." and "generally results in a saving on overtime pay."
One step forward, two steps back ... again
The move towards more "flexible" forms of production is, of course, not new. The introduction of flexibility was a key component of restructuring in industrialized economies from the 1970s onward, and a central feature of structural adjustment programs implemented in other parts of the world. Now, despite the international experience of labour flexibility (massive loss of jobs, rapid decline in working conditions and a range of other economic and social problems for workers), South Africa is moving quickly to duplicate this experience by lowering its labour standards and undermining the bargaining position of trade unions.
What is the likely impact of this legislation on South African workers? After decades of struggles, South African workers have won substantial rights for themselves. From higher rates for overtime work and shift allowances to limits on the length of the work day and improved working conditions and job descriptions, rights have been fought for, codified and in some cases generalized in minimum standards legislation. It is precisely these victories that are now being rolled back through the emphasis on greater flexibility and the introduction of "more responsive mechanisms for variation from statutory standards."
If passed, as it seems likely to be during this session of parliament, the Employment Standards Act will likely result in lower wages, increased unemployment, the intensification of work, longer working hours, and a wide range of health and safety problems. For example, the incidence of repetitive stress injuries is sure to increase, forcing many workers off the production lines long before retirement age. At Mazda in Japan, the majority of workers interviewed said they will be worn out or injured before they retire. At the Nissan plant in Britain, a researcher openly speculated as to how long the young workers on the production line would last considering the line speed. Further, flexible working time also brings with it a whole range of social and political problems for workers: less time with family and friends, less time for sport and recreation and less time for involvement in politics. It threatens, in short, to "dislodge the working class from its class groove."
Already vulnerable in the present economic climate, women and black workers stand to be most adversely affected by this legislation as the "core" workforce shrinks while the "flexible, non-core" workforce continues to increase. A smaller proportion of workers will remain as "fixed overhead" (managerial and technical staff, for example), while other workers - considered "unskilled" - will be hired on short term, casual or temporary contracts. Already we can see the effects of increased flexibility in the retail sector where women are the majority of the growing part-time, casual workforce: "a female ghetto within an already female ghetto" (as Pete Lewis of UCT's Industrial Health Research Group puts it).
Perhaps the most disturbing aspect is how the legislation will undermine the very policies and practices that have provided the basis for collective working class defense against exploitation. Organized and unorganized workers alike will be adversely affected by the decentralizing tendency of the Act. Already centralized bargaining itself has not been sufficient safeguarded against capitalists in whole regions wanting exemption from industrial council agreements. The metal industry is a case in point where, although there is formalized centralized bargaining, this in itself has not been sufficient to stop employers in whole regions from attempting exemption from the agreement.
Moreover, where collective agreements exist at centralized level, the Act gives employers every incentive to move away from these and instead bargain at levels where they are strongest in relation to the unions. Where no centralized bargaining occurs, unions have entered into company and plant level agreements. These too will now come under pressure. Insofar as the new Act allows variation of standards through individual contract, wage determination and administrative procedure (and taking into account that the LRA itself deliberately omitted any mention of a legal duty to bargain) the present bill poses a direct threat to the future of trade unions themselves. It is hard to avoid the conclusion that the longer term effect will be one of severely weakening, or even breaking, trade unions.
The politics of the ESA: neo-liberalism, the ANC and `flexible' intellectuals
Since coming to office, the ANC has introduced an explicitly neo-liberal macroeconomics strategy, reflected in its various education, land, housing, and agriculture policies. This has now found codified expression in the Growth, Employment and Redistribution (GEAR) strategy document. Such an embracing of neo-liberalism has become generally acknowledged fact, admitted to even by the Communist Party.
However, the one ministry that has heretofore been able to present its policies as being "pro-worker" has been the Labour Ministry under Tito Mboweni. Now (despite some improvements to past employment legislation that are apparent in this new labour law) the ESA's primary focus on "regulated flexibility" must surely shake the ministry's and Mr. Mboweni's reputations, since it clearly renders the Act incompatible with the entrenchment of worker rights and standards. At a moment when South African workers are perhaps most in need of strong legislation to protect themselves against the problems associated with rapid economic and trade liberalization, this legislation creates a legal framework for further exploitation of workers for the benefit of national and international capital.
Indeed, reforms to the labour market introduced by the Minister are entirely consistent with, and in furtherance of, neo-liberal policies. Indeed the progression towards neo-liberalism is even apparent in the last rounds of evolution of the current legislation: the Green Paper (the initial draft of the legislation) contained a chapter on extending rights to temporary and casual workers while the current Employment Standards Bill severely diluted this. And yet, as should be obvious, encouragement of temporary labour is entirely inconsistent with extending greater rights to such workers.
The reason the ministry cloaks its reforms in such progressive terms is two-fold. Firstly, it confronts an organized union movement that has many problems but remains militant. The anti-LRA campaign of 1995 proved this decisively. A frontal assault on worker rights in such a context is out of the question. Second, but related to this, the ministry is staffed and advised by a range of intellectuals who were previously tied, directly or indirectly, to the union movement, and who remain influential within it. It is these intellectuals, many of them erstwhile ideologues for socialism, who now espouse the neo-liberal dogma contained in the various policy documents released by the ministry.
Together with the union bosses, whom they have convinced of the inevitability of the neo-liberal path, and with other intellectuals also tied to the labour movement, these "flexible intellectuals" have managed to "sell" a brand of legislative reform to the labour market that is antithetical to everything that the union movement has struggled for over time. Much of this neo-liberalism is perforce dressed up as a muddle of "co-determination," and sweet reason. But in practice it is a combination of political dissembling, organizational manoeuvre, good old-fashioned lying and secret negotiation that is guaranteeing that these "reforms" find their way onto the statute books.
Whether the South Africa working class itself will be fooled into believing that the reforms are indeed a step forward is an altogether different story.
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