ANC’s U-turn on labour law

Business Day has reported that ANC MPs plan to overturn government concessions on labour law, which many in industry believe would have made it easier to employ and retain workers. This would overthrow the compromise reached in Nedlac – the bargaining forum which brings together government, the unions and the employers. The suggestion is that this stance by the MPs is in deference to the ANC’s Cosatu comrades. But if the country’s labour laws are indeed tightened up beyond the existing compromise, what do our experts believe the impact will be?

Expert views:

Mario Pretorius from Telemasters:

Many business people regard Tito Mboweni’s 1996 labour laws as the largest obstacle to liberal capitalism’s efficiency. The tightening of the regulations to remove the last wriggling space of business to accommodate demand fluctuations should not be a surprise. The ANC has a stated economic dogma. It implements its New Democratic Revolution’s as it deems fit. It will continue and accelerate the destruction of a semi-liberal capitalist economy as it has promised. No amount of debate will alter its ideology, shock and horror post facto merely indicates a lack of understanding of the democratic process. In many ways, the complicity of business of ‘not wanting to offend’ is oiling its own demise. If the poison is accepted, it must be swallowed and the consequences borne. Thus we have BEE, the labour laws, employment equity, the CCMA, and soon zero tolerance in employment. The People shall govern, and so we let them without a whimper. This statutory entrenchment of race-based protection will only ratchet up and will not relent. Are there enough cojones to draw a line in the sand before the inevitability of ownership and control is demanded a la Zim? So far there are few takers and many complainers – that gurgling sound is the noose tightening around willing necks.

Mike Schussler from

I suspect that the labour law "reversal" from what was agreed to at Nedlac is going have negative effects on the South African economy. Already big firms are under pressure to show results in their South African operation in many sectors- as the same firms are seeing better results in other countries. So if we take ever more flexibility away from firms there will be a negative effect, as companies will not invest more here. We need to be realistic and we need people to understand that companies go over borders quickly. Already by 2012 the Top 60 listed companies in SA got 65% of their revenue from outside the country, and this part is growing quickly – not only due to a weaker Rand but because companies are actively seeking more opportunities outside of our borders. Even state-owned companies such as ACSA, Transnet, Telkom etc. have invested outside the country as the risks are consider lower in other countries and the rewards are as good. We cannot afford to have more constraints added to it. Often we live in a false world when we think we can just add rules and regulations and still see major reductions in employment.

Dawie Roodt from the Efficient Group:

It seems there is an unsustainable relationship between organised labour (Cosatu) and the ANC. Government can’t be referee and player. Clearly the forthcoming election clouds their views.

Loane Sharp from Adcorp:

We are still processing the news and checking the details provided in the news report with our sources in Parliament. However, it is important to note that, contrary to what is indicated in the newspaper, the question of “0 months” or “6 months” relates to something quite specific: whether and when a temp will be able to cite its employer (the agency) or the agency’s client (the de facto employer) in any unfair labour practice dispute at the CCMA or Labour Court. The 0-month or 6-month period does not relate to when a temp will become permanent, which the newspaper alleged. This is therefore not a “ban” (on labour brokers) as the newspaper report suggests. For example, labour brokers will typically carry on with business as usual by issuing their clients with indemnities against any adverse award by the CCMA or Labour Court. So, while it is an indication that Parliament is a wild card in labour relations, and that decisions reached at Nedlac are nothing more than window dressing, the practical effects on labour brokers will not be significant.

Statement by BUSA:

We gather with deep concern from the media that the ANC Members of the Labour Parliamentary Portfolio Committee, are swinging strongly in favour of removing provisions for strike ballots, picketing rules and effectively banning Temporary Employment Service Providers, otherwise known as labour brokers. If these reports are accurate, we are deeply perturbed as business because not only does this create further destabilisation in the current fragile economy but also makes a mockery of the NEDLAC process.
These Bills have been subject to negotiations between government, labour, business and the community constituencies for over 3 years at NEDLAC, and were presented to the Labour Portfolio committee in March 2012. While it is understood that the process of public hearings plays a role in law making, care should be taken not to undermine a thouroughsocial dialogue process backed up by comprehensive supporting studies.
Additionally, business went to great lengths to get a Regulatory Impact Assessment study on amendments contained in the Labour Relations Amendment Bill, which indicated that hundreds of thousands of job losses would occur if such amendments were introduced. In Government’s own Regulatory Impact Assessment study of the 2010 proposed amendment Bill, the study indicated significant job losses if labour brokers were to be banned. As a result of this very same study, it was recommended that regulation was a more sensible option that an outright ban, taking into consideration the impact on employment, in particular.
Labour market announcements and inconsistent messages such as these add further damage to business confidence and will impact negatively on South Africa’s already weak economic growth projections for this year.
These pronouncements and the manner in which this is being handled, including the line by line negotiation that is taking place in the Labour Portfolio committee right now, do not do any justice to the structures that have been put in place to deal with these matters in South Africa, like NEDLAC.


It would be strange if government cannot deliver through ANC MPs on an agreement made at Nedlac. However, this issue does highlight the sensitivity of all employment-related issues in a country which has far too little employment.

Tweet of the Day:

Piers Morgan (@piersmorgan): Remember, you’re not allowed to buy kinder eggs at Walmart because you may choke on the toys. But AR-15 assault rifles? No problem.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s