Briefing by Business South Africa

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Employment and Labour

22 October 2002
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

22 October 2002

Mr M S Manie (ANC)

Relevant documents:
Briefing: Business SA (Appendix 1)
Briefing: Protest Action in South Africa (Appendix 2)

Business South Africa briefed the committee on who BSA is and what its structure and objectives are. BSA highlighted some important social and economic issues that are of national concern. BSA hopes to interact more closely with the Labour Portfolio Committee.

The Chairperson welcomed everybody and thanked members for the support they had given him during his absence from parliament. He also commended the members for their hard work. He was looking forward to hearing what BSA have to say and how they can make use of this opportunity to build relations between BSA and the committee.

BSA objectives
Mr Brian Angus (Chairperson of BSA’s Standing Committee on Social Policy) introduced the other members of his delegation and then stated the objectives of this meeting with the Labour Portfolio Committee. He stated three main objectives:

To familiarize the committee with who BSA consists of, its structure and its goals.
To discuss matters of relevance that are of mutual concern and to exchange ideas.
To look at possible ways whereby BSA’s Standing Committee on Social Policy can interact more closely with the Labour Portfolio Committee.

Mr Angus then explained to the committee who BSA is and told the committee that they are currently looking at unifying with the Black Business Council. (See Briefing: Business SA)

Growth and Development Summit
Dr Frans Barker (BSA) noted the summit planned in November by the government. Dr Barker commented how there could be two approaches to this summit. The first approach would be to have broad-based discussion, which would make for an easier summit. It would be a lot easier to get consensus on issues when talked about in general. The second approach would be to have a narrow-based one. There will be more disagreement on contentious issues but BSA feels that this type of discussion would suit the country’s needs better.

BSA do not want the summit to be a complaining session about what the government is doing wrong. The summit should rather emphasize what the government is doing right.

Dr Barker highlighted the following issues as important for debate at the summit:
- Transformation and Black Economic Empowerment
- Equality in the sharing of benefits of the economy with its people
- Creating a positive investment environment in our market driven economy. BSA feels that there should be an element of social responsibility in the economy.
- Privatisation
- Unemployment and poverty
- Skills development

Dr Barker emphasized that they have to look at the summit at how business can contribute. He mentioned that BSA has in the past established a Business Trust with R1-billion with which they for example helped fund educational projects and helped create jobs.

Dr Barker added that it is very important that at the summit they talk about creating a more positive image of the country.

Black Economic Empowerment
Dr Barker told the committee that the definition of Black Economic Empowerment is very important. BSA would like this definition to be as broad as possible so that it does not benefit only a small group of people. Issues that BSA envisages as important to this discussion are affirmative action, procurement policies, skills and rural development.

He added that if South Africa could reduce unemployment to 10% the inequality in income levels would drop to the same level as is currently seen in Europe.

He also emphasized the impact of globalisation and the world economy. He pointed to the increased demand for skills and told the committee that South Africa has to encourage investors. The BSA is aiming at a partnership approach with BBC to develop policies for black economic empowerment. This would have its difficulties but that they will have to be overcome.

Dr Barker commented that the desired end state is not a once-off event but a process. For this to work we need the delivery of human resources through our education system. He stated that this country is far too complex for easy solutions or formulas for solutions.

Protest Action in South Africa
Dr Strydom (Vice-Chair BSA’s Standing Committee on Social Policy) briefed members on protest action in South Africa (see briefing Protest Action in South Africa).

Mr Eric Nwedo (BSA) told the committee that HIV/AIDS has a negative effect on the country’s economy and on a social level. He reaffirmed the BSA’s active involvement in Nedlac’s special task team on HIV/AIDS.

He added that most industries are hard-hit but that some good work is being done. He mentioned the mining industry as one where the stakeholders are doing a lot. Mr Nwedo said that there will be a tripartite mining industry summit in November where government, the industry and the trade unions will get together to discuss this issue.

Mr Nwedo then spoke about the voluntary counseling and testing programmes. He said that the idea behind these programmes is not to discriminate but, by measuring the extent of the problem, strategies can be put into place.

The BSA wants all the stakeholders to join hands and find a long-term solution that is sustainable. Through such a solution SA will be able to grow in the global economy.

Future interaction between BSA and the Labour Portfolio Committee
On future interaction Mr Angus commented that they really would appreciate a closer liaison between the committee and BSA. Coming into this briefing the BSA was not sure how the Labour Portfolio Committee works and what the issues are that they cover. He added that BSA would like to have more regular meetings with the committee if appropriate.

The Chairperson thanked the BSA for their informative briefing. He then asked members for their comments.

Mr Rasmeni (ANC) welcomed the inputs from BSA and said it was important for the work of this committee and the nation at large. He would like to see BSA do more like building schools and promoting small and medium enterprises. More financial support is needed at grassroots level. He stressed that they are looking for patriots in this country. He also wanted to know why the BSA did not comment on the plot to overthrow the government.

Mr Clelland-Stokes (DP) asked about if there was a timeframe for reaching unity with the Black Business Council (BBC). He also asked for more information on BSA’s problems with Nedlac, as this was an important issue.

Mr Mshudulu (ANC) wanted to know what BSA will in the future say to their members about compliance with labour legislation. He also asked what their opinion is of government strategies.

Mr Middleton (IFP) asked what the difference is between protest action and striking. He also wanted to know what kept the BSA and the BBC apart for so many years. He commented that these summits (Growth and Development Summit) happen every so often and never make a difference.

Mr Pillay (DP) commented on BSA’s idea that protest actions take place rather outside office hours. He asked whether the government workers who have to accept the memorandums from the workers would have to work late and whether they would be compensated for their overtime. He also asked them to define the concept “genuine will”.

Mr Moonsamy (ANC) commented that he was sorry not to see “non-sexism” in BSA’s list of criteria for membership. He also said that during the Apartheid years the BSA used to support the regime fully. He wanted to know what the BSA’s view is of the new legislation and whether this is taking South Africans forward or not. He added that today South Africa is the most recognizable country in the world because of the ANC’s sound policies.

Mr Heine (DP) wanted more clarity on the idea of the Social Plan as a response to unemployment. He asked whether the BSA has any comments on the new labour legislation. He said that South Africa is a role player in the global economy. He added that we should see what we could put onto the agenda for the global world instead of waiting to see what we can get out of it. He would like to know what the BSA could do to help.

Mr Oliphant (ANC) congratulated BSA on their briefing. He said that BSA needs to improve their image, but that it is time to move way from the past. He also thought it would be worthwhile for BSA to engage COSATU. He added that the BSA should communicate on their Business Trust more.

Ms Malebane (ANC) commented that many graduates are without work because of the lack of experience. She said that BSA must do something about this problem. She also asked about the timeframe for unity with the BBC.

Mr Manie said that the broader problem as he sees it is generalization. People say “business this, government this, labour this etc”. Mr Manie felt that it is incorrect to generalize. He also criticised the BSA’s decision-making structure. He said that working along the lines of reaching consensus would mean that the least progressive group within BSA has a veto vote. He added that valuable lessons could be learnt from CODESA. The chairperson then asked for closing remarks from BSA.

Mr Angus said that this was a very encouraging meeting. He felt that a high level of interest from the members was evident. He added that BSA wants to be seen as part of the solution and not part of the problem. He agreed that there is a legacy of mistrust, but that now is the time to get beyond that. He said that we must not forget or ignore the past but that we should focus on making progress. He emphasised that BSA is serious about making a positive contribution to social change. He could not comment on the time frame for unity, as he did not have that information. They would address all the issues that the committee had brought up in writing, as these are urgent issues. He said that BSA was very happy to communicate with this committee.

Mr Manie said he hopes that BSA will follow up on their promises and that they would get a true idea of BSA’s plans. He added that they would set aside more time next time they meet.

The meeting was adjourned.

Appendix 1:
BUSINESS SOUTH AFRICA (BSA) is a confederation of employer and business organisations in the country and currently has nineteen members. BSA acts on behalf of these organisations on national issues where it is believed that collective action will be to the benefit of employers. Decision-making on policy is reached by consensus, with all members having equal status.

In terms of the criteria for membership of BSA, an organisation can join if it:

·          is exclusively comprised of businesses (including business organisations) and/or employers (including employer organisations);
·          stands for and defends the principles of free enterprise;
·          is a free and independent voluntary organisation which is not subject to control or interference of any kind from any governmental authority;
·          is non-racial;
·          has national significance, inter alia, in terms of the national income and the organisation's impact on the economy as a whole; and
·          is able to obtain mandates from its affiliates.

BSA policy and positions are developed by means of a committee system. The Governing Body, on which all members are represented, is BSA's highest policy-making structure, while a smaller Executive Committee deals with the day-to-day operations of the organisation.  Both these structures are headed by the BSA Chairman who is elected members for a one year term of office. A Board of Trustees, comprising senior business leaders in the country, offers guidance and advice to the Governing Body when necessary. In addition, BSA has two Standing Committees which deal with matters of social and economic policy and three specialist Committees which consider education and training, SADC-related issues and ILO activities and regional labour affairs.

BSA represents the views of its members in the National Economic, Development and Labour Council (NEDLAC) and its representatives are members of all the NEDLAC structures.

BSA's activities are not limited to the national arena, and the organisation is a member of the
International Organisation of Employers (IOE), the Pan-African Employers' Confederation
(PEC) and the SADC Employers' Group.  BSA is also involved in the activities of the
International Labour Organisation (ILO).

The Black Business Council (BBC) and BSA have committed themselves to the ultimate formation of a unitary, non-racial, umbrella business organisation. The major focus of the proposed new organisation will be to represent South Africa's multi-faceted business community on macro-economic and other issues that affect it at the national and international levels.

As a first step in a process leading to unity, and in an atmosphere of mutual trust and respect, the BBC and BSA have decided to form a business alliance. The BBC and BSA believe that a unification process is in the best interests of the members of the BBC and BSA, the business community at large and South Africa.

operates on a non-profit basis and represents the collective interests of business in South Africa in respect of economic and social policy. BSA pursues this objective by:

·          Acting for and on behalf of its members;
·          Promoting the development of an economic and social system based on the principles of justice, the market economy, individual entrepreneurship and equal opportunities;
·          Initiating and influencing legislation in the interests of members;
·          Acting as a caucus for its membership in appropriate forums and bodies;
·          Arranging representation on behalf of member organisations, or nominating representatives of member organisations, to commissions, committees or other institutions in accordance with decisions taken by members;
·          Affiliating with relevant international organisations and bodies and representing member organisations in international bodies;
·          Acting for its members at national and international levels;
·          Communicating and consulting with members on important international affairs which may impact on South African business interests; and
·          Giving attention to the role of small and medium business enterprises in all sectors and to the development of linkages between large, medium and small businesses to the benefit of the economy as 3 whole.

Tel.: (+27-11) 784 8000/1/2/3 Fax: (+27-11) 784 8004/8  E-mail:


COSATU's two-day protest action earlier this month against Government's privatisation programme sparked a lot of reaction and debate. Estimates are that the federation's protest action cost the country millions of Rands.

Government stated in no uncertain terms that it thought that the protest action was unwarranted. Business was more subdued in its criticism of the protest action, mainly because it happened to find itself on the sideline of the dispute. But herein lies the irony. Although Business was not directly involved in the dispute, it bore the brunt of the economic harm that the protest action was meant to cause.

Before the current issues regarding protest action are examined in greater depth, a moment's reflection on the origin of protest action in South Africa and the purpose this form of collective action originally served, is warranted.

Protest action has its roots in the so-called rolling mass act ion campaigns of the 1980s and early 1990s. These campaigns mostly took the form of stay-aways. The aim of these stay­aways was to force employers to pressurize the apartheid Government to introduce political changes. At that stage, employers had some measure of access to the Government and could influence it to a degree. Hence, workers' assumption that employers could induce Government t(; introduce political changes had substance and the exertion of economic power against their employers to mediate such changes had both an achievable purpose and merit.

The difference between strike action and protest action
During the negotiations on the Labour Relations Act 66 of 1995 in 1995, Government, Labour and Business agreed that the Act had to make provision for protected strike and protest action by workers.

The public and even certain trade unions and employers do not always appreciate that strikes and protest action are two distinguishable legal concepts. In both instances. workers withhold their labour. However, in the case of strike action. the purpose of the refusal to work is to try to force the employer to agree to a demand of the workers about an issue that is of mutual interest to the workers and the employer. Issues of mutual interest are mostly issues that relate to the employment relationship and to the workplace. In essence, issues of mutual interest relate to demands regarding terms and conditions of employment such as wage demands. Demands for an increase in overtime rates, food allowances, additional paid leave et cetera.

In the case of protest action, the purpose of workers' refusal to work relates to a demand of a socio-economic nature. The Labour Relations Act 66 of 1995 does not define the concept socio-economic. The Labour Court has held that whether a demand is of a socio-economic nature is a factual question. However, it will be sufficient for workers to place their demand giving rise to the protest action squarely within the ambit of the social status and economic position of workers in general.

Since 1996, workers have given notice of intended protest action about a variety of socio­economic issues such as disparities and imbalances in education, pupil to teacher ratios in public schools, the lack of public transport, the lack of safety on public transport, the gradual reduction in trade tariffs, trade agreements with the European Union, amendments to labour legislation, and most recently, Government's privatisation programme.

The dilemma of employers whose workers participate in protest action
Usually, trade unions' socio-economic demands are levelled at Government as the key provider and protector of socio-economic rights. Although protest actions are thus not normally levelled at employers, it is the employers that have to endure work stoppages and the consequent financial losses when their workers participate in these protest actions.

In addition, the original purpose of mass action such as those that were embarked upon in the 1980s and 1990s, namely to exert economic pressure on employers so that they would in turn exert pressure on the Government, has essentially disappeared. Today, South Africa is headed by a Government that has been democratically elected by the majority of South Africans. The biggest trade union federation in the country, COSATU, is part of a tripartite alliance with Government and is thus in a very good position to influence Government. In short, it no longer needs to exert economic pressure through work stoppages on employers in order to convince the employers to intervene on their behalf with Government.

Another factor that makes the resort to protest action less Acceptable is tie fact that structures and procedures have been developed which afford trade unions the opportunity to have their socio-economic grievances properly considered by Government as well as the other social partners. In terms of the Labour Relations Act 66 of 1995, trade unions must refer their socio­economic grievances to the National Economic Development and Labour Council (NEDLAC) for consideration before embarking upon protest action. Past experience has shown that, provided that there is a genuine will by all the parties concerned to resolve these issues, socio-economic issues that end up in NEDLAC need not necessary lead to protest action.

The negative impact of protest action
South Africa has had to endure protest action on a number of occasions since it was statutorily provided for in the Labour Relations Act 66 of 1995. Often, these protest actions were embarked upon nationally and for longer than one working day. (Consider, for example, COSATU’s protest action in 2000 about a right to strike about retrenchment.)

In the case of COSATU's protest action about privatisation, the country has had to endure so-called repeat protest action. COSATU embarked upon a work stoppage in August 2001 about the issue. The federation subsequently endeavored to embark upon another round of protest action in November 20(~l but called it off when it realised that such action would not enjoy protection under the law. On the 1st and 2nd of this month, COSATU again engaged in protest action about the issue. It has already' threatened to again resort to protest action about this matter in November of this year.

Although the stay-away figure during the protest action on 1 and 2 October was relatively low (employers reported an average of 15% absenteeism by their workers) some industries were particularly hard hit by the protest action. In the case of the automotive manufacturing industry, for instance, the protest action was extremely negative for South Africa's image as an exporting country. This industry has a range of long-term export contracts that it has secured with international motor manufacturing companies. Protest action which leads to an inability to meet delivery deadlines in terms of these export contracts, jeopardizes the chances of the renewal of these contracts by the international companies.

The recent spate of protest actions is of grave concern to Business South Africa. Protest action is counter-productive and detrimental to South Africa's growth and development potential. Protest action negatively affects both domestic and foreign business perceptions, investment sentiment and ultimately has a negative impact on growth, development and employment in our country'.

Although there is a place for protest action about socio-economic rights, unions should act responsibly and only resort to such action in exceptional circumstances. South African trade unions should be especially prudent in this regard as the country is a developing country that has to compete globally with other developing arid even developed countries in extremely difficult and competitive markets.

If Labour. Government and Business are serious about promoting South Africa as an attractive investment destination and an economy with high growth potential, all the parties should refrain from actions, which in practice, detract from these objectives. In this regard, a greater commitment by the social partners to genuinely attempt to consider unions' socio­economic grievances at NEDLAC could play' an important role in averting protest action.

Another option that would promote South Africa's image as an investor friendly country is for trade unions to consider engaging in protest action outside working hours. They could, for example, protest during lunch breaks, after work and even on Saturdays and Sunday's. It would send a message to local and foreign investors that South African trade unions are responsible and mature. It would also have other benefits such as that employees would not have to sacrifice wages and employers would not have to suffer a loss in production

Dr Elize Strydom



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