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OPINION: The current SA labour landscape

MONEYWEB / 08 MAY 2018 - 19.05 / NOMPU SIZIBA

Jean Ewang of Hogan Lovells outlines what potential investors into South Africa look for in our labour regulation environment.

NOMPUMELELO SIZIBA: The World Economic Forum’s Competitiveness Report has found that South Africa’s labour-employer relations rank 137th out 137 countries. This comes at a time when some factions of labour have called for the scrapping of the planned minimum wage of R3 500, calling it an insult. It also comes at a time when there is disagreement in the transport sector with the national bus strike that’s in its fourth week. To get some insight into what this ranking means, I am joined on the line by Jean Ewang. She is a partner at Hogan Lovells, specialising in labour.

Thanks very much for joining us, Jean. When we see this ranking, 137th out of 137, it suggests that South Africa’s labour-employee relations are one of the worst in the world. What do you read into this ranking and the reasons for it?

Image - Web. Jean Ewang

JEAN EWANG: In the introduction you talked through the current state of the protests that we are experiencing – the fourth week of the bus strike – but ultimately what the rankings have come down to is the relationship between employers and employees in the country, and it speaks to the disharmonies in that relationship.

NOMPU SIZIBA: Now, labour often complains about receiving slave wages while employers complain about the lack of productivity. Which is which, and is this part of the reason for the friction between the two?

JEAN EWANG: I think that as with any age-old business model, it all goes to competing interests between profit and employees feeling entitled to having a living wage, or being able to make a living that’s befitting of someone who’s got dignity, and those kind of things. But ultimately I think what’s important is for business and for labour to focus on trying to harmonise those competing interests. And I’d do the best that could be done. For example, if you talk to productivity, an employee can only be productive if the work environment is conducive. But then you need to look things such as employee benefits, employee-wellness programmes, are we training our employees, and is there skills development taking place. An employee who is trained and who is invested in is more likely to be productive, and you can get the most out of those employees as opposed to employees who are not essentially being looked after.

NOMPU SIZIBA: All stakeholders want to be part of a growing economy and enjoy the benefits of economic development. How does the seeming lack of symbiosis between labour and employer affect economic development?

JEAN EWANG: The less harmonious the workplace is, the less productivity, the less profit you are going to get out of your business. So the more harmonious the workplace is, the more you can get out of that business. I think it’s important that employers and the workforce alike start looking at how they can harmonise their relationship, as opposed to always seeing it as an adversarial relationship.

NOMPU SIZIBA: When the likes of the IMF, World Bank and the OECD talk about South Africa’s labour landscape, they always talk about structural rigidities within the system. In plain English, what does that mean and what would it take to address these rigidities?

JEAN EWANG: In plain English, my understanding of that statement is that the employment landscape in South Africa is highly regulated. And oftentimes it happens that global investors, when they are doing their due diligence to enter into the country or enter a particular sector in the country, one of the important aspects they will look at is what the employment-law landscape looks like, meaning that what are the laws in place, how rigid are they, what does it mean for my business if I enter into South Africa, how high will my labour bill be in terms of salaries, in terms of benefits, and some of those – monetary assurance, etc. And also, very importantly, how easy is it to hire people or to fire people.

We as a country have a very regulated system, a regulated legal landscape, but I don’t that it is completely rigid. I think there is room to manoeuvre if you are an investor coming into the country, but I do think the statement speaks to the fact that there is a very regulated employment landscape.

NOMPU SIZIBA: How badly is South Africa wanting in terms of skills, and to what degree does the current education system hamper people’s ability to progress?

JEAN EWANG: I wouldn’t claim to be a social developer or economist, but what I would say is that it is important as an employer to upskill your people and to do skills development. The law doesn’t make provision for that, and the world’s employers do invest in skills development and training their employees. But it goes back to the point of productivity. The more you invest in your employees, the more productive they will be for you.

NOMPU SIZIBA: Here’s a more direct question for your profession. When Saftu called for a national strike two weeks ago in protest against the minimum wage, there was a lot of talk about the labour law amendments that are said to be put in place. Please just outline to us how in fact people’s right to strike would be affected, and any other salient issue that affects workers when engaged in a dispute with their employer here.

JEAN EWANG: Like I said, the salient point that is going to come up is going to be in relation to, prior to a union calling for a strike, what procedures are to be followed before they can go out on a strike. One of them that’s proposed to be introduced, which the unions are against, is the issue of having to call for a ballot. I suppose the rationale behind it is that if the majority of the members are not in support of the strike, then the ballot won’t go through.

NOMPU SIZIBA: Indeed.

JEAN EWANG: That ballot then is crucial in relation to disputes with employers, because of course going on strike is one of the major tools that the workforce has in collective bargaining.

NOMPU SIZIBA: So in the bigger scheme of things, do you think that the proposed labour legislation and other initiatives afoot by Cyril Ramaphosa’s government will assist South Africa to become a more attractive investment destination and therefore assist in lifting employment numbers in the economy?

JEAN EWANG: That’s quite another question. I don’t claim to be a politician, but I do think that there are some positive aspects to look forward to. And I suppose the amendments will have to go through the parliamentary process and…these public submissions and relationships, for example, the National Minimum Wage bill – and all those things will have to be considered before we can sort of assess what the intended outcome of these proposed amendments will be.

NOMPU SIZIBA: Alright, Jean. That’s fair enough. Thank you very much for your time.

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LINK : https://www.moneyweb.co.za/moneyweb-radio/the-current-sa-labour-landscape/

Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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