Address by the Minister of Social Development, Dr Zola Skweyiya, at the International Conference on Decentralization and coordination: the twin challenges of Labour Market Policy, Venice, Italy, 18 April 2008
We have long observed that employment plays a critical role in the full realisation of the quality of lives for individuals and societies. Employment gives us a sense of purpose and identity whilst also providing an income to meet our material needs. Work is one of the main means to relate with others. It is both an individual responsibility and a social activity, frequently involving collaboration in a team. It can be a source of dignity and fulfilment. However, whilst employment can further social integration and societal cohesion, it can also lead to exclusion by limiting access to jobs.
The ILO report on “Changing patterns in the World of Work,” shows that whilst poverty is unevenly distributed across the globe, in 2005 around two-thirds, that is, 3 billion of the 4.6 billion people of working age were either not working or looking for work. 84% of them live in the developing world. It is also significant to note that about 52% of the population in Sub-Saharan Africa lives beneath the poverty threshold.
The report also reflects that progress is painfully slow in creating decent work opportunities for all. And yet there is hope, despite the daunting statistics, we believe that the poverty challenge is not insurmountable.
The findings of the report are mirrored by the South African labour market realities. These, amongst others, require ongoing restructuring which must respond to the negative consequences of globalisation and the challenges of managing the democratic transition, so as to facilitate for a globally integrated economy. To successfully achieve these we have pursued labour market policies aimed at promoting economic growth, employment absorption, as well as sound and stable labour relations. These have resulted in the elimination of workplace inequality and discrimination and have secured skills development for thousands of young people.
We remain cognizant of the fact that a decent formal sector job remains the greatest source of income and security. The South African government therefore supports the notion that any intervention to address changes in the labour market should be mindful of and consistent with the decent work agenda. As the South African government, we are presently engaging in an auditing of the effectiveness of the labour laws, its implementation and enforcement. However, this is done within the context of the decent work agenda so as to promote a fair chance at real opportunities through education, health, shelter and a decent job.
Ladies and gentlemen, one of the key lessons of our young democracy is that the labour market policy arena is a highly contested terrain. We have had to in this short space of time pay attention to legislative and regulatory reforms we introduced since 1995 and these have been some of the most important monuments of our new democracy. Simultaneously, some have gone to an extent of criticising our regulatory environment as being rigid and inflexible. There is still not yet empirical evidence that suggest that the so-called labour market rigidity affects investment in the country.
From the onset of our democracy, we knew that the road to economic and social transformation is certain to be long and treacherous. Progress on a variety of government programmes intended to achieve this transformation bears testimony to this long and winding road. Most strikingly, especially with regards to our labour market policies, we have one of the most fundamental, well-balanced regulatory regimes, but we still have a long way to go in ensuring that these progressive policies are observed in practice. Until we achieve this in reality, we cannot say with confidence that we have achieved this transformation.
South Africa's democratic dispensation coincided with the phenomenon of globalisation, virtually dictating to the country what kind of policies we should adopt. At that point, a developmental discourse was biased in favour of prioritising macroeconomic stability, with a higher proportion of the budget channelled towards debt servicing. Our economy was characterised by below expectation growth, unfavourable levels of investment, and sluggish levels of sustainable job creation. At the same time there were huge development challenges facing our new democracy.
We therefore welcome the conclusions of the ILO’s Global Report on the Status of Employment Equity in the Workplace, which states that “to tackle discrimination at work, the creation of more equal societies must become a central goal of development policies.” For our part we have assembled various pieces of legislation directed at creating an equal society these include the Employment Equity Act.
All these efforts are directed at also fundamentally transforming workplace relations in the country from adversarialism to co-operation and trust, to bring about labour relations stability. This transformation should however not only be viewed as a transformation of labour relations narrowly, but a broader societal transformation. In the words of President Nelson Mandela in 1995:
"Turning ideal into living reality will, amongst other things, require undoing the consequences of discriminatory practices of the past, in particular in employment and education. Affirmative action is a strategy of corrective action to bring previously disadvantaged people to the same competitive levels as those who have been advantaged."
The Commission for Employment Equity was recently chastised for suggesting that we are still not sufficiently complying with this legislation, as its Employment Equity Annual Report has shown. Our detractors believe that there is no need for affirmative action anymore, despite the revelations in the Annual Report that show that our employment patterns in South Africa continue to strongly reflect the days before 1994. Despite our repeated assertions that we need to correct the imbalances of the past - which is central to the sustainability of our democracy, our detractors continue argue that affirmative action policies represent 'reverse discrimination.'
As a continuing effort on our part to consolidate this process of transformation, we have started a process of developing our Decent Work Country Programme. In this programme, we seek to address all sorts of discrimination in access to work opportunities. Women and youth, as part of the historically marginalised and disadvantaged, will be accorded the necessary attention. This is part of our social and economic transformation.
It is important to point out that arising from these deliberations; a common understanding has emerged in three critical areas affecting the labour market. Firstly, the broader context underpinning our legislative framework including the objectives of our policies and their redistributive role in improving the working and living conditions of our society is sound and shall not be altered.
Secondly, social partners agreed that the issues of job creation and small business development have to be located in a broader legislative context inclusive of macro-economic, social and trade policy issues and not be limited to labour market policies alone.
Thirdly, whilst the fundamentals of our legislative framework are sound, weaknesses remain on the implementation and operational side that impact on the efficiency and effectiveness of our labour market systems. Implementation is therefore an area we need to work harder on. We have also requested the International Labour Organisation (ILO) to conduct a swift review of our labour market, in a manner that would help shape our approach to resolving these institutional challenges where they exist.
CCMA
We recently celebrated the tenth anniversary of the Commission for Conciliation Mediation and Arbitration (CCMA) which has from November 1996 to January 2007 processed over 1 million labour disputes. To this end, it has been a resounding success. The number of working days lost due to industrial action has decreased by 68% since the coming into operation of the Labour Relations Act (LRA). The average time taken to resolve conciliation is 26 days and for arbitration, 48 days. The combined average to resolve a case is 66 days (inclusive of all processes). These achievements are despite the fact that the CCMA receives about 120 000 referrals a year, a caseload far higher than ever expected.
Although there is global consensus on the need for organised labour there has been a worrying decline in trade union membership. Globalisation has placed more emphasis on trade liberalisation and the relocation of production to lower-wage economies, which has an adverse effect on the working class. The World Commission on the Social Dimension of Globalisation acknowledged that globalisation has had a varied impact on employment and economic sectors with the decline in formal employment being experienced in developing countries. Due to the fundamental principles guiding globalisation, the power of the markets have grown and increased with the working class being subordinated to an international process of capital accumulation. As a consequence, these global trends have also been accompanied by the changing methods of work organisation and “atypical” forms of labour. The results of all these have made it difficult for trade unions to organise workers successfully using the traditional methods of worker solidarity. This situation is compounded by the changing nature of work organisation with more emphasis on labour casualisation.
We must therefore seek ways that promote collective bargaining as well as a societal wide social dialogue. In the South African context we have institutionalised social dialogue principally through Nedlac (National Economic Development and Labour Council). This institution remains at the heart and pulse of socio-economic policy formulation in the country.
In recent times, Nedlac reached a milestone in its young history for its instrumental role in the landmark Growth and Development Summit Agreement that was signed in June 2003. The summit brought together government and other social partners in an enduring partnership anchored on a shared and common understanding and commitment to tackle unemployment, poverty, social development and economic growth.
It is worth noting that inherent in our labour laws is the concept of regulated flexibility which was supported by the social partners at Nedlac. Testament to this fact is that business can apply for ministerial variations to vary certain conditions of employment from the Basics Conditions of Employment Act. The bargaining councils' agreements contain clauses for providing exemptions to small enterprises within their scope and the ministerial determination for small businesses varies certain conditions of employment from the Basic Conditions of Employment Act.
Ladies and gentlemen the greatest challenge facing our subcontinent is the negative economic and social consequences of HIV and Aids, and yet some of the workers' movements do not consider HIV and AIDS fight as part of their own cause. To continue truly serving members, trade unions will have to address the question of HIV and AIDS in the workplace. They will have to ensure that employees beyond their membership are not discriminated against and benefit from development of HIV and AIDS awareness programmes and employee assistance programmes (EAP). I congratulate workplace partnerships that have developed these programmes and encourage the unions to pursue these programmes in workplaces wherein they are non existent. Only if trade unions and their members put all their force, their enthusiasm and solidarity behind these programmes, a caring and compassionate workplace will be achieved.
Foreign Direct Investment (FDI) and Domestic Saving and Investment have been a major challenge for the economy of the Republic of South Africa. Business Process Outsourcing and Off-shoring is seen as one of the major drivers to promote foreign direct investments. During the past four years, Setas and the National Skills Funds spent a total of R96 million to train 4 357 learners in Business Process Outsourcing learners in various levels. During the 2007/08 financial year we have allocated a further R41 million to train a further 6 400 learners under the National Skills Fund (NSF) Strategic Project allocations.
The acquisition of intermediate artisan and technical skills for the infrastructure development programme remain a major challenge if we are to successfully host the 2010 World Cup. Since 2001 to the end of March 2006, we have been producing on average 5 600 artisans and 16 000 learnerships in various occupations per annum. These have supported Government's Accelerated and Shared Growth Initiative for South Africa (AsgiSA). This initiative is directed at growing the economy, creating jobs and consequently eradicating poverty. AsgiSA fully acknowledges that "all knowledge is vain save when there is work". Consequently, skills development is central to the achievement of our growth and job creation objectives. ASGISA responds to binding constraints, which include:
- The volatility and level of the currency
- The cost, efficiency and capacity of national logistics system
- Shortage of suitably skilled labour amplified by the cost effects on labour of apartheid spatial patterns
- Barriers to entry, limits to competition and limited new investment opportunities
- Regulatory environment and the burden on small and medium businesses
- Deficiencies in state organisation, capacity and leadership.
In order to meet the objectives of ASGISA we remain cognisant of the need for a radical injection of skilled and capacitated citizens. This need is very apparent, especially when considering that our economy has been generating about 76 percent of jobs requiring semi-skilled and skilled labour. Simply put, we have a skills mismatch. To facilitate for the addressing of this mismatch we have also introduced the Skills Development Act to empower those in employment and the unemployed.
The advent of globalisation has weakened nation states and the extent to which they are able to direct nations in particular ways. Today, skilling your people does not necessarily mean that they will work for you. In all likelihood, they might just relocate to work in other countries. At the same time, we also benefit from skilled people trained by other countries. Businesses come and go as they please, the rand goes up and down as it pleases, and the list is endless. Therefore, being able to carve a definitive role of the state has become more challenging under globalisation. It is however not only the state that has had to adapt or die. Our labour market institutions are facing similar challenges.
In the quest for adaptation we have developed innovative programmes such as the Thuthuka Education Upliftment Project which is undertaken in partnership with Further Education and Higher Education Institutions. After the successful completion of the first phase of the project over 56 thousand learners and 13 thousand educators have benefited.
We are also pleased with the results of yet another special project, namely the Uitenhage-Despatch Development Initiative (UDDI) Regional Skills Pool funded by the National Science Foundation (NSF). In this project we trained 1 000 unemployed youth in basic automotive and engineering skills over a period of two years. 934 learners completed their training and of these 850 were employed by Volkswagen South Africa (VW-SA). This is an example of how partnership between labour and business can help address the problem of shortage of technical skills that the economy so needs.
In the past year we collated the results of the National Skills Development Strategy (NSDS) phase one (2001-2005). During this period we registered 170 926 learners into learnerships and apprenticeships, of these 109 674 (64 percent) were unemployed learners while 36 703 were apprentices, contrary to the perception that apprenticeship is dead. 71 percent of the learners were placed either in income generating projects, employment or further training within three months after training.
We have reiterated that ILO call for the creation of equal societies and emphasised the requirement that this objective must be cardinal to all development measures. This is also why we are constitutionally required to put in place measures to affirm the previously disadvantaged. Section 9(2) of our Constitution states that, "Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons or categories of persons disadvantaged by unfair discrimination may be taken".
The creation of this equal society cannot be the sole prerogative of the state. Employers and workers have to form part of this building process. Employers must do more to open their doors and affirm workers from the previously disadvantaged, whilst workers must also do better to organise at the workplace and ensure that employment equity is adhered to. Unions must make sure that they participate fully in the Employment Equity Consultative Forums.
We all carry the responsibility to create a diverse and tolerant workforce that is equitable in nature and free from unfair discriminatory practices.
As a member of the International Labour Organisation (ILO) and as a signatory to its conventions and practices, South Africa unequivocally supports and is committed to the ILO’s Decent Work Agenda. In addition, our commitment to the decent work agenda is reflected in all our attempts to reduce poverty, and to achieve equitable, inclusive and sustainable development. Our commitments are not motivated by a blind love for multilateralism, but the objective realities confronting our people. To address these we require support from all sectors including our international development partners.
And so we urge all our development partners to support us towards the realisation of a better quality life for our people and better world for all.
I thank you
