Unemployment and the labour laws

COSATU is challenging government for the wrong reasons. It should demand that government adopt policies that will increase the demand for labour, thus driving wages and benefits up and unemployment down. Both employed and unemployed South Africans will benefit if the labour market is changed from a strong buyers market to a strong sellers market. There are currently too many disincentives that discourage employers from employing more staff.

The government is changing the labour laws to improve employment opportunities but it is not going far enough. As a responsible government it cannot allow the current level of unemployment to continue without attempting to do something about it. However, having correctly identified the excessively stringent labour laws as a primary cause of continued high unemployment, the government is in the unenviable position of having a tripartite alliance partner that is implacably opposed to the implementation of the only feasible solution; relaxation of the labour laws.

The Malamulela Social Movement for the Unemployed has for some time been calling on government to make it possible for the unemployed to reach their own agreements with employers. The organisation maintains that its members should have the prerogative of deciding for themselves what conditions of employment they wish to accept. Malamulela has prepared what it calls a “Customised Employment Contract” that can be adapted to reflect specific circumstances in any contract between employee and employer. The organisation has asked government to make its contract legal. This would mean allowing the unemployed to dispense with the vast array of provisions in the labour laws that they believe are preventing them from getting jobs.

According to Malamulela, small firms are the most likely source of jobs for the unemployed. These are businesses that do not have human resources personnel, do not know anything about the labour laws, and are afraid to hire anyone for fear of falling foul of those laws. Their fears are borne out by the fact that the majority of the cases referred to the Commission for Conciliation, Mediation and Arbitration involve small firms. Malamulela believes that, if allowed to do so, the small firm owners and their employees will between them be able to work out contracts that will be satisfactory for all concerned. In effect, they are suggesting that the complex labour laws were designed to regulate relations between big labour and big business and should not apply to the unemployed and small firms. Thabang Mokotong, the President of Malamulela, says ‘the labour laws have deprived us of our right to contract and we appeal to government to restore those rights, which are guaranteed to us in the Constitution’.

Author: Eustace Davie is a director of the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.

FMF Policy Bulletin / 15 December 2009