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.

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