“Nobody wants Asian-style sweatshops in SA, but centralised bargaining can become counterproductive.   Provided that health and safety standards are maintained, if people are prepared to work for less than the minimum wage, that too should be considered their fundamental right”.

Labour Minister Membathisi Mdladlana, supported by SACTWU and the bargaining council itself, representing the majority of large and established employers, wants to criminalise contraventions of bargaining council agreements claiming that “employers who do not comply with minimum wages are stealing workers’ fundamental rights”.

Business Day in an editorial today, They will close down, not pay up reports on statements made by the Minister to delegates to the clothing industry national bargaining council’s annual general meeting in Cape Town this week.   Please read the entire editorial as only some of the extracts are included here.

It is worth bearing in mind that the forerunner to the bargaining council system was the system of industrial councils introduced into our law in 1924 by the then Prime Minister General Jan Smuts.   It was an attempt to appease ‘white’ workers and voters to support him in the next general election after they had been attacked and killed by the Smuts government in 1922 during the Rand Revolt.   It was Smuts who allowed an agreement collectively bargained at industry level to be extended beyond the actual parties to the agreement.

In this regard it is worth reading Jeremy Krikler’s book The Rand Revolt: The 1922 insurrection and the racial killing in South Africa (2005, Jonathan Ball Publishers).   Amongst others the author thanks Sydney Kentridge and Paul Benjamin for their advice and conversation.

Interests of the country as a whole?

“But the government is responsible to a broader constituency than just these two role players, so the question needs to be asked: is this approach in the best interests of the country as a whole?”

Inability to compete & world trade rules

“It is no secret that the fundamental cause of the domestic clothing and textile industry’s woes is its inability to compete on price with imports from the East, principally China.

The government, having failed to intervene a decade ago when it could have done so legitimately in terms of world trade rules, has more recently resorted to negotiating import quotas for Chinese goods and spending vast amounts of taxpayers’ money on support programmes intended to prevent retrenchments by subsidising struggling clothing manufacturers while they try to improve efficiency and find niches where they may be competitive.

This has enjoyed only limited success in reducing job losses, yet comes at considerable cost to taxpayers and to consumers, whose ability to benefit from cheaper imports has been reduced”.

Decent jobs & paying internationally competitive wages

“The only way they have been able to compete up to now has been by paying wages that are internationally competitive, a level that is well below the minimum set by the bargaining council, so mass closures and attendant job losses are inevitable.

The government, unions and established clothing manufacturers are, in effect, saying that if employers can’t offer jobs that are “decent” as per their definition, then they shouldn’t be in business.   They may be right, but there are two sides to that coin.   Companies that cannot offer “decent” jobs without benefiting from state subsidies and protectionist trade agreements shouldn’t be in business either”.