Sectoral bargaining system

SA’s “storming” process produced workable postapartheid operating models in the political Codesa of the 1990s and labour relations in the 1970s and 80s.

However, during the halcyon days after 1994, perhaps tired of robust debate, big labour, big business and central government bureaucrats established our sectoral bargaining system. With the arrogance of the powerful and believing themselves on the right side of history, they rationalised away or ignored the needs of the unorganised — especially small businesses and the unemployed.

The engineers of SA’s economic future thus missed a unique opportunity to reset the structural inequalities left by apartheid, making the 1996 labour legislation a classic Pyrrhic victory.

Instead of co-determining the future of trade unions and business, the bargaining councils have only dealt with wages and conditions of employment, which could and should be better set at enterprise level — where worker, owner and manager interests can be effectively traded off according to the particulars of each business’ circumstances.

SA’S LABOUR RELATIONS SYSTEM HAS DISMALLY FAILED TO ADDRESS THE NEEDS OF THE RURAL POOR.

Big labour and big business settled for a system catering for the lowest common denominator; thereby promoting mediocrity and domineering bullying by large over small enterprises. Though they favoured the sophisticated codetermination of Swedish and German labour relations, it was not adopted.

The HR mandarins who represented the conglomerates are now mostly comfortably retired, while many trade union leaders were made instant billionaires through the conglomerates’ largesse. Yet economic growth has stalled and SA’s unemployment rate is amongst the highest in the world.

Not only did the generators of the labour relations system ignore the profound economic and social challenges that were propelling SA into uncharted territory, they were blind to how much of their own power and their own assumptions were rooted in the apartheid system and the sanctions era that tried to curtail it.

Despite their fiery rhetoric about building a new society, the dominant roleplayers reinforced key assumptions that kept the old economic order in place. During this time, the power of conglomerates was artificially increased through isolation from global competition and by their acquisition of discounted companies from disinvesting international companies in the 1980s because of sanctions.

Apartheid’s policy of influx control and Bantustans restricted the unemployed to rural areas, artificially restricting employable labour. Hence, the legal trade unions organised a relatively small industrial labour force; and since they were the only legal channel for political expression, they gained immense power.

SA’s labour relations system has dismally failed to tackle the needs of the rural poor, who continue to flock to the cities to seek their fortune, as they try to compete with the organised working class and with equally poor cross-border migrants.

Somalis, Nigerians, Pakistanis and Bangladeshis who had been born into age-old trading cultures — and despite having arrived in SA destitute — have outcompeted locals in setting up a fit-for-purpose retail industry in the townships.

Since neither the ideology that begat centralised bargaining, government transformation policy, nor the Freedom Charter could explain these phenomena, they remain untackled.

Worse still, the designers of SA’s labour relations framework have ignored the catastrophic effect on the economy of the dysfunctional education system caused by the South African Democratic Teachers Union, which remains an intractable stumbling block on the road to economic transformation.

Asked for one key piece of advice for African policy makers, Sir Richard Branson — speaking on Radio 702 recently — said that small, not big business, would create jobs and grow the economy; that big business created impediments and would always protect the status quo.

We should remember this in any future “economic Codesa” tasked with reformulating this country’s future.

Large overstaffed corporates and politically ambitious trade unions, who can afford to send representatives to chamber of commerce meetings, must not be allowed to arrogate to themselves the right to speak for the whole economy.

Instead, it is imperative that any future economic Codesa examine the lessons learnt, stripped of labels and slogans. The process must be conducive to honest debate — and references to theory, whether of the Marxist or free market variety, should be avoided.

It would be even more helpful if people could confront the reality and compare it to what they assumed during the early conversations on economicpolicy labour relations and employment.

Yudelowitz is joint MD at YSA and author of Smart Leadership.

Downwards: Legal trade unions organised a relatively small industrial labour force, and since they were as the only legal challenge, gained immense power. Alon Skuy