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Jul 25, 2012

New labour laws will set SA back – Busa

Engineering|Africa|Busa|Business South Africa|Business Unity SA|Africa|South Africa|Manufacturing|Retail Organisations|Vanessa Phala

Big business came out strongly in opposition to government's proposed changes to labour legislation on Wednesday.

Appearing before Parliament's labour portfolio committee, on the second and final day of public hearings on the Basic Conditions of Employment and the Labour Relations amendment bills, Business Unity SA (Busa) warned the two measures, if enacted, would set back employment creation.

"The level of unemployment is continuing to rise, and we are of the opinion that the bills that we have before us will not take us anywhere in terms of addressing the issue of unemployment," Busa executive director Vanessa Phala told MPs.

Busa represents South African business on macro-economic and high-level issues that affect it at national and international levels.

It also represents local businesses' interests in the National Economic Development and Labour Council (Nedlac).

Created in 2003, through the merger of the Black Business Council and Business South Africa, the confederation includes among its members the SA Chamber of Commerce and Industry and the Chamber of Mines, plus many other professional manufacturing, engineering and retail organisations.

"Let me indicate that this submission by Busa is supported by all our members," Phala said.

Busa's key concern was the need to create jobs. Government's New Growth Path and New Development Plan were good initiatives that set specific targets in terms of the number of jobs that needed to be created.

"But we are of the view that we will not be able to meet those targets if we've got the kind of bills we have before Parliament."

A critical area for the creation of jobs and the growth of business was to have a strong compliance and enforcement mechanism, hence the need to have a very good labour inspectorate in place.

"We are of the view that the kind of laws we [already] have, [together] with very good enforcement, can really achieve the intended objectives."

Phala said it was not a good idea to "always want to change the laws because there is no compliance", and suggested to MPs that they might want first to address enforcement and address compliance.

She also called for a comprehensive assessment of the impact the new bills might have, taking into account the proposals they contained.

"We feel, at the moment, that these bills... will not get us anywhere and not enable us to meet our target and our objectives."

The amendments in the bills provided "poor policy choices", and there were other options.

"The bills... will have a dire, dire impact on small business in particular," she warned.

If you made it difficult for small business to operate, "you are killing many jobs".

Busa had done its own impact assessment, over three key areas.

This assessment showed that about 215,000 jobs would be lost as a result of the equal treatment provisions contained in the amendments.

"It also indicates that between 11,000 and 105,000 jobs will be lost as a result of amendments prescribing wage increases on actual earnings.

"Furthermore... between 38,000 and 80,000 jobs will be lost should amendments to extend collective bargaining agreements be introduced."

This was clearly not a very good picture, and one that business was reluctant to commit itself to.

"We need to really go back... and ensure that the bills passed by Parliament will give us the kind of outcomes we want."

On part-time employment, she said business was not against treating workers equally, but the proposed amendments went beyond discriminatory matters.

"They go on to require employers to pay... the same benefits to part-time workers as those working full-time."

This would increase the wage bill and discourage employers from employing part-time workers.

It would also promote onerous litigation.

South Africa was grappling with a serious crisis of unemployment, but the amendment bills would not help solve this problem.

"What we have before us in these bills is counter to what we are trying to do," Phala said.

Cabinet approved the two labour amendment bills for submission to Parliament in March this year.

Edited by: Sapa
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