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Caving in to labour’s demands for higher wages will not end well for us all

Caving in to labour’s demands for higher wages will not end well for us all

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The CCMA in the past has managed, to a large degree, but despite very little help from our government, to have almost a 75% settlement rate on all labour disputes. This means government and the private sector have benefited from labour peace because of successful mediations.

It is well known the CCMA has the power once the labour minister activates this to intervene in a labour dispute which could destroy an industry or affect the country.

Our ever-dysfunctional minister of employment and labour always waits until a strike or a dispute has been wholly destructive before he turns to the CCMA for help.

Over the past 15 years, I have been calling upon the Labour Ministry to be active in dispute avoidance. The CCMA is alerted by the disputing parties when there is a deadlock in their negotiations.

The CCMA in turn could alert the Labour Ministry which could then activate a positive response by invoking powers granted in the Labour Relations Act to avoid the dispute.

The government has all the powers and all it needs is the will to try and be proactive for once.

Numerous other interventions could be taken up by the Labour Ministry in trying to make the business environment more productive and labour friendly.

A column of this nature does not allow me to outline all the interventions that could be undertaken at very little cost.

I have been active in outlining these interventions, almost weekly addressing the Labour Ministry at the Labour Portfolio Committee in Parliament. It’s almost as if Napoleon Bonaparte was correct when he said, “to be believed, make the truth unbelievable”.

The various wage demands from the civil service and state-owned enterprises have been incredibly trying for government and public. These wage demands have been out of kilter with what is affordable and we know government has done its homework but could only afford 3%.

It has now been shown the civil service demands of 6.5% to 10% have also created absolute havoc. Government once again stated it couldn’t afford more than 3% and, in fact, it was unilaterally implemented in the medium-term budget speech. This unilateral implementation created a backlash and forced the unions to join together (even those that weren’t involved) and to have a united front which could cripple the civil service.

The latest news is government has agreed to pay a 7.5% increase even though it is unaffordable. Once again, government has sold out the fiscus.

This unaffordable offer will lead to major problems this time next year.

Government does not have the money and if they start borrowing to pay wage increases, this is a very slippery slope.

They have no choice in this situation other than to take money from service delivery to give for wages. This means, at the end of the day, service delivery is going to get far worse.

Already many municipalities are bankrupt and stating they can’t provide service delivery.

This has affected electricity, water, sewerage, transport and every other service that is needed to run a functioning municipality.

If we take even more money away from the municipalities to pay the increased wages, one can expect that service delivery will be nil.

Some of the towns are already looking like a war zone and one can only imagine what it will look like with these increased wages which had to be funded from the minimal budget that was supposed to go to the municipalities.

It is all very well caving into wage demands even when you can’t afford it to broker labour peace, but the consequences are going to be dire.

* Michael Bagraim.

** The views expressed here are not necessarily those of Independent Media.

Cape Argus

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