South Africa’s current jobless rate - on the official definition which excludes those too discouraged to keep actively looking for work - stands at 26%. This is substantially higher than the equivalent unemployment rates in Brazil and Russia (6% each)‚ India (9%)‚ and China (4%).

The Institute of Race Relations today issued a report by consultant John Kane-Berman‚ setting out a ten-point plan to help overcome this unemployment crisis.

“South Africa’s very high unemployment rate tells us that there is something wrong with our labour market‚” the report says. “Job security for some has been achieved at the price of unemployment for others who might have benefitted from a more adaptable and flexible regulatory environment.”

Here is a summary of its 10-point plan:

Step 1: End strike-related violence

Strike-related violence must be brought to an end through criminal prosecutions and civil liability for unionists who incite or carry out arson attacks‚ assaults‚ or murders‚ says Kane-Berman.

In the last 20 years‚ the IRR said‚ 162 people have been killed in violence against workers who failed to heed strike calls.
This failure to enforce the criminal law must end‚ he said. To add to deterrence‚ he added‚ unions should be sued in civil proceedings for any loss of earnings by the dependants of people killed to enforce a strike. This is already possible under the Labour Relations Act (LRA).

Step Two: Require secret pre-strike ballots

Ballots should be required both before a strike and at regular intervals during a strike to test whether or not support continues‚ says Kane-Berman.

Strikes implemented without a two-thirds majority authorisation in a ballot should have no claim to “protected” status‚ meaning anyone going or remaining on strike would face dismissal‚ while those engaging in such a strike or in conduct designed to further it would be subject to civil claims for damages for any resulting losses.
This proposal would ensure that the decision to go out on strike was taken not by union officials but by those most directly affected‚ he said.

Step 3: Protect property during strikes and pickets

Union organisers should be held liable for damage to property during strikes and pickets‚ Kane-Berman said.

“The LRA and other laws already allow unions to be held accountable for damage to property during strikes‚ but these provisions are seldom used.”

Step 4: Limit the scope of protected strikes and pickets

Only strikes and pickets over work-related issues between workers and their own employers should be protected‚ the IRR says.

“Sympathy” strikes against third-party employers should carry the penalty of lawful
dismissal. So too should strikes for “socio-economic” reasons‚ such as protesting against e-tolling or privatisation proposals.

Strikes in essential services‚ such as teaching and nursing‚ should not enjoy protection‚ the report proposes.

Step 5: End the “closed” shop and make unions collect their own subscriptions

The LRA includes “closed shop” provisions‚ which bind employers to hire only people who belong to particular unions. The Act should be amended to outlaw these provisions.

In addition‚ majority unions should not be able to exclude others from negotiations with employers.

Union subscriptions should be collected by unions themselves‚ not by employers on their behalf. He says this would help to promote union accountability to their members and so strengthen unions.

Step 6: Stop extending bargaining council agreements to “non-parties”

The LRA allows trade unions and employer organisations to form joint bargaining councils with the capacity to make binding agreements on wages and working conditions for employees in particular areas and industries. However‚ the LRA also allows bargaining council agreements to be extended to other employers and workers who have not been party to the negotiations.

“The Act should be amended to remove this power. Extending agreements to non-parties is an undemocratic and coercive practice‚ which is drawing increasing criticism because it helps to protect the interests of big business and organised labour against small business and the unemployed. Small businesses are thus compelled to pay wages that only larger firms can afford‚ leading to closures‚ retrenchments‚ and in some cases‚ relocation to neighbouring states.”

Step 7: Give people back their right to work

Most of the unemployed are also poorly skilled (only some 8% have tertiary education)‚ while two-thirds of them have been jobless for a year or more‚ says Kane-Berman.

“Better education is often cited as the answer to high unemployment‚ but this will take time to achieve and can make a difference only in the long run.”

In the interim‚ he proposes that minimum-wage laws should be ended to make it easier for unskilled people to find jobs.

He explains: “Unskilled people without education or assets have only one thing to call their own: their willingness to work… Yet under current labour legislation they are often not free to use it…

“Where wages are set higher than employers are able or willing to pay‚ they will naturally employ fewer people. Yet‚ in a country with unemployment as high as ours‚ policy should aim to price people into jobs‚ not out of them.”

“A household in which two people earn R5‚000 a month each is better off than one which has to rely on the income of only one person earning R8‚000.”

Step 8: Allow dismissals and retrenchments to be governed by employment contracts

The law makes it difficult to dismiss poorly performing workers or to retrench them where a business needs to downsize.

“If a company and its employees want to be able to refer disputes over dismissals or retrenchments to arbitration‚ a voluntary agreement to this effect should be included
in their employment contracts. If a dismissal dispute arises‚ it should be referred either to arbitration (where applicable) or to the labour court‚ where the normal common-law rule on the onus of proof should apply.”

Step 9: Remove new restrictions on temporary labour

The LRA and other labour legislation has recently been amended to compel employers to treat temporary employees as permanent staff after three months‚ as well as to ensure that they are then all paid the same. Kane-Berman believes this could cause job losses among temporary staff‚ and is likely to reinforce the longer-term trend for employers to reduce their dependence on labour‚ especially unskilled youths.

Step 10: Stop fighting the private sector

Recognise the importance of the private sector in generating jobs‚ and stop trying to “defeat” capitalism and shift to a socialist system‚ says Kane-Berman. “Hostility takes the form not only of increasingly onerous legislation‚ but also the belligerent attitude shown by ministers in portfolios with a direct impact on the economy.”

The IRR notes that its proposed reforms are designed to curtail violence‚ replace coercion with democracy‚ lower barriers to market entry‚ and remove obstacles to the engagement of workers. It states: “These reforms will no doubt be dismissed as ‘neo-liberal’‚ ‘neo-conservative’ or ‘right-wing’‚ but the need for them is increasingly compelling. South Africa’s high unemployment levels are morally unacceptable and a waste of human and economic potential”.