9 FEBRUARY 2000
Madame Speaker,
Honourable Members,
Mr President
I must concur with the President that at no other point in time have we ever been as well placed as we are today to take decisive steps forward. This statement holds true within the labour market as it does to the broader challenges we face as a nation.
We have come from a labour market environment characterised by a low rate in the creation of productive employment, widespread instability and conflict, a grossly inefficient utilisation of labour due to discriminatory practices, low skills levels and investment in skills development and, of course, the denial of fair labour standards for the majority of workers. These apartheid-inspired features of our labour market militated against economic growth, employment creation, productivity and investment.
In the past few years, we have made tremendous strides to address this legacy and to create the necessary conditions for labour market efficiency. And we have done so under invidious international and local circumstances. Our entry back into the international economy took place at the same time as the inevitable spread of globalisation. As a result, many enterprises and sectors previously shielded from global competition have undertaken significant restructuring to remain competitive.
Today we are on track to create a labour market environment conducive to sustained growth and development and increased efficiency, productivity and employment. Further we are making remarkable progress in translating into action our commitment to achieve a balance between improving the efficiency of the labour market and the protection and security of workers.
What is the basis for this confidence? Allow me to enlighten you.
Jobs Summit agreements
The implementation of the Jobs Summit agreements involving a wide range of government agencies is proceeding apace, spurred by growing partnerships between government and the private sector in initiatives such as the Business Trust Tourism Learnership Project which will benefit 15 000 unemployed and current employees and will help realise the tourism sector's enormous potential for growth and job creation.
Partnerships with the private sector has also helped accelerate delivery in the continued implementation of the Social Plan, including projects such as SAB's Project Noah and training of employment services practioners.
Skills development
We are on course with the determined implementation of the Skills Development and the Skills Development Levies Acts. And we are confident that the skills revolution that will be unleashed as a result will help attract investment, make our country more competitive and thrust our economy onto a new growth path.
Small business
In November last year I announced a dispensation for small business in the form of a Ministerial Determination which is both employment friendly and protects employees rights. My Department will continue to interact with small business leaders to identify any other residual obstacles that retard the growth of small business and the survival of Non-Governmental Organisations.
Employment Equity
Through the Employment Equity Act, my Department has and will continue to make giant strides in addressing racial divisions, inequalities and prejudices in the workplace. This year up to 100 000 employers will be reporting on progress they have made in achieving employment equity and reducing discrimination in the workplace, as well as outlining their plans and targets for the future.
Legislative review
Finally, I am confident that the results of the legislative review which I have undertaken and to which the President referred, will effectively address the issue of the impact of our legislative instruments on investment and job creation. Allow me to report to you on this process.
During the course of 1999, we embarked on an extensive consultation process with key stakeholders, including organised labour, business and the community constituency at Nedlac.
What was the fundamental message that emerged from these consultations? Was there a call for the complete overhaul of the legislative framework and was the outcome that the labour market should be completely deregulated and chaos allowed to prevail?
The answer is No. That is what some opposition parties call for, as well as some commentators who have never spent a day in a factory. That is not what the men and women who represent the working people and employers of this country told me.
They told me that the policy fundamentals of our laws are sound. They welcomed the changes that had occurred since 1994. They were excited particularly by the skills development legislation.
They further told me that they appreciated the approach taken by the Department of Labour. It was open and showed commitment to serious dialogue and negotiation with the social partners. This was the message from business, labour and the community constituency, Madam Speaker.
They also warned me about problems and emerging features of the labour market. Labour was concerned about the ongoing casualisation of labour that led to a decline in labour standards. They expressed alarm at the rate of job losses.
Business warned about the pressures they face as we re-enter the world economy. They spoke of negative perceptions among some foreign investors and the need to demonstrate the manner in which our legislative framework enhances business efficiency and productivity.
In government we have also unpacked the issue of negative perceptions, drawing from local and international research and the practical experience of my Department and other labour market institutions in the implementation of the legislation.
What was particularly constructive about the deliberations was that the participants put aside the empty slogans and tired rhetoric to which the Leader of the Opposition so often falls prey in his quest for cheap political point scoring. Instead the focus was on an honest exchange, drawn from concrete workplace experience, to identify specific problems and solutions.
Madame Speaker, it has been a very fruitful exchange and one which has contributed significantly to my 15-point programme. An important aspect of this programme will be the introduction of legislative amendments to address unintended consequences and improve their application.
Legislative amendments
There has been much debate about these amendments. Allow me at the outset to dispel any false notions, firstly, which see the amendments as a cure for all the ills of the economy. Secondly, that we are about to undo the policy and legislative framework we have introduced since 1994 to transform the labour market, key elements of which I have already referred to.
Madam Speaker, those who still long for a return to the dark days of the apartheid labour market regime or the removal of fair labour standards are going to be sorely disappointed. We are not about to embark on a wholesale deregulation of the labour market. Increasing international experience has shown us that labour markets characterised by deregulation are unstable, unpredictable and do not necessarily attract foreign investment.
Instead, we wish to make adjustments and refinements to specific aspects of two labour laws: the Labour Relations Act and the Basic Conditions of Employment Act. Together with the Department of Justice we are going to introduce amendments to a few provisions of the Insolvency Act.
A number of the amendments arise from proposals emanating from our social partners while others arise from the Department's own experience in the implementation of our laws.
The amendments aim to:
The introduction of the amendments will, we believe, contribute towards reducing negative perceptions of labour laws and ensuring their successful implementation and enforcement.
The key areas where amendments will be considered include:
Let me look at some of these areas in more detail.
Dismissals and retrenchments
The Labour Relations Act puts in place procedures to regulate what happens when workers are dismissed in a number of situations including for misconduct, incapacity, retrenchment and redundancy.
Over the last period, these provisions have brought enormous certainty to workers and employers. It has improved significantly the job security of workers who in the past could be dismissed at the whim of an employer. It has meant enormous adjustments to individual firms.
Arising from this intense experience, a number of lessons have been learnt and inadequacies picked up. These include that inadequate distinctions are made between small and big business and between workers who are on probation as opposed to workers who have worked for many years for the same employer. For example, the current formulation makes no distinction between a worker who has been employed for three months and one employed for 20 years. It is these kinds of issues that we seek to address through legislative amendments, without taking away workers' rights to job security.
In respect of retrenchment procedures, the union movement believes that they are inadequate and are not taken seriously by employers. Last year, I issued a Code of Good Practice in respect of retrenchments and appealed to parties to use this Code in good faith. It is in this context that I will explore legislative amendments.
Similar legislative amendments will also seek to bring greater clarity and certainty to the situation when a company changes hands and when a company is liquidated. Concerns have been raised that workers are not entitled to severance pay when a company is liquidated and this is one of the areas that we are looking into and which may necessitate changes to the Insolvency Act.
Before I move on, I should like to point out that it seems that elements of both business and labour share the same misconception about the power of labour laws. The Democratic Party and some of their supporters, say: "Change labour laws and jobs will be created". Some elements of the labour movement say: "Change labour laws and then retrenchments will stop".
The fact of the matter is that laws do not create or destroy jobs. As I have spelt out many times before in this and other forums, it is predominantly factors external to the labour market, including the structural nature of our economy, levels of investment, industrial policy and changes in the international economy that have a far greater impact on the job creation potential of an economy.
Basic Conditions of Employment Act
Proposed amendments to the Basic Conditions of Employment Act provide some examples of adjustments under consideration to meet the needs of the current environment and address unintended consequences.
After a dynamic debate when this house passed the BCEA, we continued to maintain a premium on Sunday work. Workers who work on Sunday are remunerated at either time and a half or double their ordinary wage. However the question we are now asking is whether in the face of the increased prominence that we are giving to tourism as an engine of growth and job creation, this should continue.
Secondly, in an endeavour to reduce working hours in South Africa, the BCEA sets an absolute limit on the 45-hour week. If workers want to work longer than this, they must be paid overtime or can average hours. This has had many unintended consequences including that we have been unable to regulate the maritime sector, where even the ILO is proposing a 72-hour week bearing in mind their specific circumstances.
Madam Speaker, there are numerous examples to which I could refer to further illustrate the manner in which we will be approaching the amendments. May I point out that, despite the impatience expressed within some sectors, ours is a constitutional democracy and I am sure no-one would wish to see the legal processes which are necessary in the tabling of these amendments being bypassed. I have appointed a legal drafting team which will work with my Department to prepare draft amendment Bills. Once I have approved this, it will be forwarded to Cabinet for consideration and adoption before being tabled in Nedlac for negotiation between the social partners, and finally to parliament, which will of course have the final word. I am therefore confident that this house will have further opportunities to deliberate on these matters.
The introduction of these legislative amendments is an exciting challenge and one to which I am looking forward. It is after all one of the processes which lie at the heart of the consolidation of our democracy and the continued transformation of our country and our labour market. Now that the big picture is in place, now that we are on course, we can devote the necessary attention to refining our policies to ensure that we more effectively build a nation at work for a better life. This is the source of our hope and our confidence in the future.
I thank you.