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Speech by the Minister of Labour, Mildred Nelisiwe Oliphant at the Annual Labour Policy Conference, Roodevallei Conference and Meetings Hotel

Speech by the Minister of Labour, Mildred Nelisiwe Oliphant at the Annual Labour Policy Conference, Roodevallei Conference and Meetings Hotel

24 Jan 2011

Theme: The Department of Labour’s five year strategic plan and policy issues in 2011

Question for readers

Have you conducted a potential risk assessment on your business / organisation/ department or public entity arising from the proposed amendments to employment regimes and practices?

Where is the focus by DOL on employment creation in its Strategic goals other than vague platitudes about "lets first focus on decent work" before creating employment opportunities?

Where is the critique of excessive Union demands and pressure on wages and excessive strike action (Public Sector, Metro Rail, Municipality, Transnet, Hospitals and Teaching professions?) which directly impact on: business and investor confidence, education, etc. With the never ending debate about scarce and critical skills and poor historical matriculation stats especially in mathematics and sciences, why no integrated efforts to address these issues with related government departments (DTI, Education, Economic Development).

Where is the special accommodation for start ups and SMME's who contribute towards creating employment opportunities. For alternative approaches which DOL could have considered click here

Where are the initiatives to create greater flexibility in public sector employment and workplace practices to reduce constraints impacting on labour attrition rates, ability to source and attract scarce and critical skills, and retain skills through flexible remuneration practices especially at SMS and MMS levels?

4 of the 6 goals identified below focus on compliance and more rigid employment practices whilst the remaining 2 focus on social security. There is no identifiable strategic focus on employment creation.

Where is the integration in DOL's strategic goals with other legitimate government efforts to create employment and meet the 2015 reduction in unemployment targets?

Why is there no strategic focus on the most pressing issue - Skills development (ABET, artisan and learnerships) when this falls squarely within the jurisdiction of DOL?

Are the Department of Labour's strategic goals not solely centred around COSATU's agenda, only one party to the 3 key stakeholders in labour policy development?


Programme Director
Leaders of Organised Labour
Ladies and gentlemen

It is a great pleasure to be invited to address you on the occasion of the annual Labour Policy Conference and to have the opportunity to interact with organised labour so early in the New Year. It is going to be a challenging year for social dialogue and for all the social partners.

I have been asked to address the Department of Labour’s five year strategic plan and policy issues facing us in 2011. I would have liked to bring you copies of the Department’s Strategic Plan, but it is in the process of being finalised as we need to table it in Parliament in due course. So, let me speak to:

  • the strategic priorities that we have identified that will frame the department’s strategic plan
  • how these strategic priorities link to policy issues for 2011
  • the challenges that face social dialogue in the year ahead.
  • The department has the adopted eight strategic objectives to guide our plans and our activities over the next five years. These are:
  • contribute to employment creation
  • promote equity in the labour market
  • protecting vulnerable workers
  • strengthening multilateral and bilateral relations
  • strengthening social protection
  • promoting sound labour relations
  • strengthening the capacity of labour market institutions
  • strengthening the institutional capacity of the department.

Some of these objectives are carried forward from our previous strategic plan and are likely to remain a key strategic focus for the department for some years to come.  Given the nature of the labour market in South Africa, protecting vulnerable workers will have to remain a key focus, we will just have to get better at ensuring proper protection. 

The same applies to social protection. The benefits administered by the department can be improved in many ways, but they also need to be integrated with the longer term social security reforms of government.  This process is likely to go beyond our current strategic plan.

The department will, in the 2011/12 financial year focus on the following strategic areas:

  • Reviewing and submitting to Parliament amendments to labour legislation – the Basic Conditions of Employment Act, Employment Equity Act, Labour Relations Act and a new Employment Services Bill.  Our aim is to create a policy framework to promote decent work, and a policy framework for the provision of public employment services which will enable government to maintain a database of job seekers and job opportunities, as well as matching and placement of job seekers. The department will during the 2011/12 financial year consult with stakeholders and on conclusion, present the bills to Parliament.
  • Reduce inequality and discrimination in the labour market through effective compliance monitoring and enforcement of the Employment Equity Act
  • The Labour inspectorate system will be strengthened to monitor and enforce compliance with legislation to ensure decent work principles are adhered to and address vulnerability in the labour market.
  • A new Occupational Health and Safety (OHS) Bill will be drafted to strengthen enforcement and improve compliance to health and safety.
  • A UIF Bill will be processed to improve benefits and extend the period.
  • Improved access to income protection services (CF and UIF) including reintegration of workers into the labour market

These areas of activity will be our priority. They link directly to some key policy issues that face us during this year.

The first policy challenge is the review of labour legislation that started at National Economic Development and Labour Council (Nedlac) a few days ago at the meeting of the task team on 20 January 2011.

The bills that were published on 17 December 2010 are not new to the social partners. The exception is the Employment Services Bill. The other bills amending the Labour Relations Act, the Basic Conditions of Employment Act and the Employment Equity Act were all the subject of discussion in a Nedlac process during 2009 and early 2010. There are a few important changes, such as the proposed deletion of section 198 and the definitions of employer and employee, but the rest should come as no surprise.

What has changed since the Nedlac discussions in 2009 is the labour market context. Due to the economic recession we lost a further one million jobs, bringing the numbers of unemployed in South Africa to roughly 4.4 million in September 2010. Job creation is now an overriding priority for government and hopefully for our social partners as well. 

The key test of our policies will have to be their ability to contribute to job creation. To put it another way, we have to ensure that our policies do not have negative consequences for employment.

Some may want to argue that our priority should be decent work that we should not focus on jobs only at the expense of security of employment inacceptable conditions of employment. 

Let us not get into an either/or debate. We want both jobs and we must strive for decent work.  The ILO defines decent work as being:“productive work for women and men in conditions of freedom, equity, security and human dignity.”

We need to start with productive work. We need the jobs and employment opportunities in which people can be occupied and begin to measure conditions of freedom, equity, security and human dignity.

It is therefore important that we engage in social dialogue on the amendments in an effective and focused way. I am sure that we would all want the amendments to be passed into law as soon as possible so that the legal reforms can begin to change labour relations and the operation of the labour market for the better.

A second policy area that faces us is that of strengthening enforcement of existing labour legislation.

Through the proposed amendments, we are proposing a number of changes to strengthen the powers of the inspectorate of the Department of Labour. We are criminalising non-compliance with provisions of the Basic Conditions of Employment Act (BCEA) and we are increasing penalties for non-compliance with both the BCEA and the Employment Equity Act. The Labour Relations Act is also being amended to strengthen the enforcement of arbitration awards issued by the Commission for Conciliation, Mediation and Arbitration(CCMA) and Bargaining and Statutory Councils. 

This move to strengthen enforcement represents an important policy shift and should not be viewed only as an operational matter.  Why do we have to do this?

Again the context is important. During periods of economic crisis, employers will be under financial pressure and will look at ways of cutting labour costs. One can therefore expect an increase in non-compliance during such times. But non-compliance has been a problem in our labour market for quite some time.  It goes back further than the economic recession that we experienced in 2009.

The factors that contribute to non-compliance with labour legislation could include the following:

  • economic pressures on business
  • lack of capacity and willingness to implement the law
  • lack of capacity to enforce the law in an appropriate way by government
  • weaknesses in co-regulation, that is where enforcement comes about through strong labour relations between workers and managers
  • weaknesses of trade unionism and collective bargaining.

We need to begin a careful examination of why it is that non-compliance has become such a problem. And we need to ensure that we strengthen capacity by the social partners to improve self-regulation in the workplace. Changing the law will not be a silver bullet to dealing with the problem of non-compliance.

Government faces a very big challenge in strengthening our capacity to regulate, but we are unlikely to be able to do this alone.  We need strong trade unions with strong shop floor structures and representation and we need stronger collective bargaining, especially in the private sector.

There are going to be very substantial challenges facing the social partners during 2011. I have highlighted only two of the policy issues that are critical for the department. There are a number of others – the social security reform initiative, including changes to the Compensation Fund and Unemployment Insurance Fund, to mention just one example.

These challenges will put pressure on social dialogue and we will have to ensure that we give adequate support to social dialogue and coordinate our efforts so that we achieve our aims. This is where Nedlac and organised labour have a critical role to play.

President Jacob Zuma in his June 2009 State of the Nation Address stated that the “creation of decent work will be at the centre of our economic policies”. Developing a policy package that facilitates employment creation requires tough dialogue. 

Decent employment creation can only be successful when all stakeholders constantly keep in mind during the social dialogue process the context of the South African and global economies, social realities such as poverty, inequalities and education levels, and the long term goals for South Africa which must be weighed against short term costs.  The local economy is showing signs of recovery but remains fragile. Unemployment remains unacceptably high and the division between rich and poor is not reducing. We need to work together to find ways of addressing this crisis and the systemic inequalities that characterise our society and labour market. 

Successful and effective social dialogue is the only solution but more than ever, we all need to move away from an attitude of winning regardless of the collateral cost, to an attitude of joint consensus seeking in the interest of all.

Let me conclude by stressing again that we as social partners need a concerted and committed effort through social dialogue to find sustainable, realistic, affordable and innovative solutions to the challenges that we face. Our attitude needs to be one of cooperation, not competition. Together we can do more.

I thank you.

Source: Department of Labour

Issued by: Department of Labour
24 Jan 2011


Decent work and temp jobs tie ANC and unions in knots

IOL Business labourP2 Jan21 2011

A new fount of verbiage concerning labour brokers and the nature of jobs erupted as the country got back to work after the New Year break. And the confusion it created was compounded by proposed changes to the labour laws produced last month by the government.

According to one set of interpretations, the ANC has changed its position on demanding decent jobs, adopting instead the cry of the free marketeers that any job is better than no job. And Cosatu, after insisting that labour brokers – “modern day slave traders” – be banned, has now accepted the inevitability of labour broking in a modern economy.

These interpretations may be correct. Or they may not be. What is certain is that positions are changing.

They are doing so against the background of the arguably badly drafted proposed changes to the labour laws. These are still open to discussion and amendment, but they provided the opposition DA with an opportunity to score political points with the sensationalist claim that millions of jobs were being threatened.

However, the DA does seem to equate the existence of labour brokers with job creation, which is a clear fallacy. Labour brokers merely provide workers for jobs required on a temporary basis by the various productive sectors of the economy.

Predictably, Cosatu “totally rejects” the DA assertion that labour brokers create jobs. But the federation admits that it is “still examining the details” of the government’s proposed legislative changes.

Significantly, however, the federation now denies that any changes will “effectively prohibit labour broking”. This does seem to imply that Cosatu accepts that “temporary employment services” – the term used in the Labour Relations Act (LRA) – are essential. And that, presumably, means that labour brokers of one kind or other are necessary.

Yet the key proposal by the government is to scrap section 198 of the LRA that deals with labour broking. This is the section that makes clear that the problem in the supply and exploitation of casual workers lies with law enforcement; that it is the Labour Department at fault for effectively turning a blind eye to law breaking.

As this column pointed out in October 2009: “In law, the end employer, who hires a broker to supply labour, hires the employees of the broker. The broker is, therefore, responsible for the pay and conditions of the workers outsourced to other companies. As such, any broker who does not provide all the usual rights and benefits to workers is breaking the law.”

Workers employed on a temporary basis also have every right to be unionised, to organise and negotiate with their employers. It is here that the unions have fallen short.

Last year, for example, the Cosatu-affiliated Communication Workers Union protested that the SA Post Office had employed labour brokers to provide 8 600 casual postal workers at an annual cost of R350 million. According to the union, the hourly rate paid to the brokers was more than double the pay received by the workers.

The question to be asked here is why, since the union and its members must have known about these workers at the time, they did not recruit them or refer them to a perhaps more appropriate general union? And why, if the casual employees were being underpaid, did the union do nothing about this?

It also seems that the matter was not reported and no checks were made to discover if the brokers who supplied the workers were operating within the law. Were they acting as legal employers?

At that stage Cosatu’s demand that labour brokers be banned had already become entrenched as a campaign. So the question about whether the Post Office might – especially over the festive period – require additional, temporary staff, tended to be ignored. As was the question of additional, temporary staff in other sectors such as agriculture.

Also largely ignored were suggestions that unions or the government might establish labour “pools” or exchanges that could supply flexible labour. In the face of mushrooming private “maid service” businesses, the SA Domestic Workers’ Union toyed with the idea of establishing a union-based service, but this never got off the ground.

However, this all boiled down to the acceptance that there was a need for temporary employment. The only question was: how is it to be organised?

Under the new proposals, the matter is further confused. Employers of labour are to be the only employers in law of both temporary and permanent staff. And all staff must be employed permanently, “unless the employer can establish a justification for employment on a fixed term”.

But without brokers or another agency, where do employers turn for temporary staff? In any event, current legislation already forbids the long-term employment of staff on a “casual” basis.

The question was further complicated this month by Gwede Mantashe, the chairman of the SACP, secretary general of the ANC and former general secretary of the National Union of Mineworkers (NUM). He made a carefully crafted comment that amounted to “any job is better than no job”.

This seems to completely contradict the ANC’s 2009 election pledge to back Cosatu’s call for “decent jobs”; jobs that are permanent and provide reasonable wages and conditions.

Not so, say Mantashe’s supporters. They point out that Mantashe also said that once workers were employed, they could organise and negotiate better wages and conditions.

He also pointed out that any new jobs in the mining sector would automatically qualify for the established and NUM-negotiated rates of pay and levels of benefit. This, they say, promotes the need for greater unionisation while stressing the benefits to workers of being union members.

So job creation, like the definition of labour broking, seems to depend on interpretation. But at the very least, the statements made so far this month are riddled with ambiguity.

Perhaps it is time that politicians and labour leaders learned to say plainly what they mean – and mean what they say.

Labour and business need inflation reality check

Business and labour are notoriously slow to adjust to changes in the inflationary environment. Regular surveys by the Bureau for Economic Research (BER) at Stellenbosch University have shown that financial analysts, quizzed on their expectations, routinely come up with lower predictions than business executives and trade union officials.

However, the latter two have finally conceded that inflation could remain within the Reserve Bank’s 3 to 6 percent target range this year. The survey conducted in the fourth quarter of last year showed financial analysts expected 4.5 percent average inflation this year while business and trade unions forecast 6 percent.

This produced an average expectation of 5.5 percent for the year, compared with the 6.1 percent average in the previous BER survey.

Though the Reserve Bank has started revising its inflation expectations upward, its estimate for the year is still much more favourable at 4.6 percent this year (up from a 4.3 percent estimate in November) than the average BER forecast. And private sector economists are making predictions in line with the bank.

Let’s have a reality check. Inflation has been running at less than 6 percent since February last year, which shows the bank and other analysts have a much firmer grasp of reality than business and labour. This may be because inflation allows businesses to hike prices and blame events outside of their control, such as rising input costs. And it allows trade unions to bolster their case for bigger wage hikes. Not that trade unions are constrained by inflation figures – last year wage demands were twice or even three times the inflation rate.

But the fact that two powerful lobbies are out of sync with reality is dangerous because their demands help shape economic policy.

Perhaps some scarce resources should be diverted from schools and universities to training courses for ignorant business and trade union leaders.

Clothing workers

Some clothing manufacturers’ compliance with the minimum wage is as low as 25 percent, others pay closer to the prescribed wage, which for a qualified machinist is between R451 and R740 a week, depending on the area.

But the Apparel Manufacturers of SA (Amsa) wants clothing manufacturers that are compliant with the minimum wage to be able to pay less for new entry level workers in order to expand their factories to take on bigger orders from retailers.

The unions are having none of this, saying that workers in this industry are already among the lowest paid.

If an industry cannot survive unless it pays such appalling wages, is it really one that can be saved? Just how little are people, no matter how unskilled, expected to spend hours working for? Are there not more sustainable and lucrative industries that can be grown to create jobs?

Business, of course, wants to make profit. But so do those who work, that is, profit through their labour by earning enough to survive and live as comfortably as possible. A mere R880 a month does not seem to cut it.

But an entry level position could provide an unskilled unemployed person with an “in” into the job market, a possible stepping stone to better things. If this sector could pay lower wages to entry level workers it could expand and larger factories could take on more orders from local retailers.

Johann Baard of Amsa says in this scenario 100 000 jobs could be created in 18 months. If these companies can’t expand and create more work opportunities, South Africa could face the loss of even more jobs after the hundreds of thousands of jobs lost in the two years across all industries.

As Gwede Mantashe, the ANC’s secretary general said recently, there is nothing decent about being unemployed. More specifically he was quoted as saying there was “nothing more (degrading) than being unemployed”.


Telkom internet

Telkom has a bright flashy advert for its new broadband product, which it has called Simple. A key part of that bright flashy advert is the emphasis on “Fast internet” with the suggestion being that Telkom Simple will provide you with a “fast” broadband service.

Anyone considering applying for the service would do well to peruse the excellent website of the Advertising Standards Authority of SA, which contains a fascinating analysis of the use of the word “fast” in this context.

It seems that by almost no measure of the word “fast” – in the context of the internet – can Telkom’s Simple product be described as fast. The reality is that Telkom Simple can only be described as fast in relation to snail mail.

According to ASA, Telkom did not deny that the speeds offered by Simple “are in fact the slowest available broadband speeds on the market”.

So thanks to Mr Bivesh Pema for bringing this imaginative use of the word “fast” to the attention of the ASA, and to the ASA for bringing it to the public’s attention.

It is just one of the many fascinating cases on the ASA website; others relate to battles between retailers, the ongoing beer war between SA Breweries and Heineken, and there is also a list of the really dodgy ads that the public should look out for.

Talking of SA Breweries, can it be much longer before its stable-mate in the giant SABMiller group, namely Amalgamated Beverage Industries, is told to stop touting Coca-Cola’s Vitaminwater as a nutritious drink?

The UK’s ASA recently ruled that this description was misleading primarily because Vitaminwater contained about a quarter of the guideline daily amount of sugar intake.

There is apparently 23g of sugar added to each container, which only comes in 500ml bottles. Page 15


Edited by Peter DeIonno. With contributions from Ethel Hazelhurst, Samantha Enslin-Payne and Ann Crotty 

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Gary Watkins

Gary Watkins

Managing Director


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