2005-11-19,+Cheadle+paper+will+refresh+labour+market+debate,+Joffe


 * Business Day, Johannesburg, 18 October 2005**

= Cheadle’s paper will refresh stale debate on labour market reform =


 * Hilary Joffe**

FAR from providing too much protection for workers, SA’s system of labour law may be providing too little for those who need it most — and too much for those who don’t need it at all.

This is the thrust of a recent “concept” paper by University of Cape Town professor of law Halton Cheadle, one of the key architects of SA’s post-1994 labour legislation. His thinking could well offer a way forward in an increasingly sterile and dead-end debate about labour market reform. He argues, in essence, that much of the problem is with the institutions of labour law, not the law itself. The labour courts, the Commission for Conciliation, Arbitration and Mediation (CCMA), and the sectoral bargaining forums are not working in the way intended when labour legislation was rewritten in the mid-1990s.

But Cheadle identifies flaws in the legal framework too, particularly with statutory unfair labour practice provisions that may be serving little purpose other than to protect managers who can easily look after themselves by other, contractual means. Does the working class really need the unfair labour practice legislation?, he asked at a recent seminar at Constitution Hill. He wants to see policy makers revisit the whole conceptual framework of the Labour Relations Act.

Cheadle’s concept paper was commissioned by the presidency — part of the “thorough research” into the labour market that President Thabo Mbeki promised after July’s cabinet lekgotla. Cheadle was asked to look particularly at small business and what options there were to lighten the load of labour market regulation on small business. But he concluded that no review of labour market regulation could stop at small business. A holistic review was needed that would take other concerns into account.

The paper itself is quite technical and legalistic. But Cheadle’s arguments may be exactly the kind of intervention needed to get intelligent debate going. One of the problems is that “labour market reform” means quite different things to different factions. The International Monetary Fund, along with more than a few local economists and business people, keep urging SA to free up its labour markets to stimulate economic growth and job creation. The argument is that an inflexible labour regime may drive economy in the direction of capital-intensive, rather than labour-intensive, investment.

These arguments tend to be rejected out of hand by a labour movement that has fought hard to gain protection for workers. So the debate never gets far politically. But intellectually, too, it is rather dead-ended. There is not nearly enough evidence on the correlation between job creation and labour market flexibility.

But it is not clear what is meant by flexibility, or in what ways SA is worse off than its peers. Few of the flexibility proponents ever spell out which aspects of SA’s labour legislation are the problem, or whether the failure is institutional or legal. What is more, there is growing concern, in the labour movement and government, that there are more and more casual and marginal employees, the “working poor”, falling outside the labour regulation framework altogether.

Cheadle’s paper helps to bring all these concerns together. But it also points to some sound legislation that has not been implemented the way it should have been, in part because those implementing it have not had the will to throw over the habits of older institutions. “Regulated flexibility” was the key concept meant to underpin the labour legislation, enabling the economy to be efficient, productive and adaptable while protecting workers from exploitation and guaranteeing their rights. But it has not all turned out that way.

Cheadle argues that the labour courts and the CCMA have misunderstood what they were meant to do. They have “overproceduralised” and overcomplicated hearings and, he argues, lawyers and consultants deliberately feed anxiety about what looks like an impenetrable set of rules.

Then there is the failure of sectoral collective bargaining to provide protection to many vulnerable workers. Sector-level bargaining was meant to bring about framework agreements that could be extended across entire sectors, ensuring basic protection for all workers but allowing for company-level negotiations. Instead, the bargaining councils tend to operate like the old industrial councils, setting inflexible wages and conditions for hundreds of categories rather than creating extendable frameworks. Also, there should be far more sectoral bargaining across the economy — but the social partners (government, business, labour) have not come together to make it work as it was intended.

Some of the unfair labour practice law is a relic, too, of the days when black trade unions of the 1970s and 1980s used it as a way to win rights. Now, there is a variety of other protections built into the law and the various unfair labour practice provisions are in need of thorough review. Cheadle’s take on this is likely to be controversial. But on this, as on other aspects of labour law, he has opened the way to some constructive controversy.

‖Joffe is chief leader writer.

From: http://www.businessday.co.za/articles/opinion.aspx?ID=BD4A103198