Extending bargaining council agreements to non-parties is being challenged in the High Court as being unconstitutional. All citizens should be allowed to seek work and earn money for food and shelter. Will the ANC and COSATU dare to defend the scheme concocted for purely political gain by Prime Minister JC Smuts in 1924 ?
Jurists generally think collusion should be illegal, which is why it attracts extreme penalties in SA. Except in labour law, which is truly bizarre. Collusion is not only allowed, it’s mandatory and collusive deals are imposed on noncolluders. A and B negotiate contracts that bind C and D, where C includes small mostly black business and D includes marginal workers and desperate job-seekers.
The Free Market Foundation’s director Leon Louw asks the question Who would oppose reforms to labour law? The column was first published in Business Day today.
. . . .
A most passionate critic of labour law is Herman Mashaba. “Decent people can’t stand by and do nothing when 7-million people are unemployed, half our youth have never worked, and black small business has been decimated. I’m no economist or lawyer but common sense tells you we must reform our labour law.”
Mashaba may not be an economist, but we know from the immutable law of opportunity cost that “there’s no such thing as a free lunch”. All benefits have costs, and if things cost more, people buy less, including labour. Economics teaches that well-intended laws often have negative effects far exceeding their real or expected benefits. As our labour laws increase the cost, risk and difficulty of employing people, fewer people are employed.
. . . .
Under Mashaba’s heroic leadership, the Free Market Foundation launched a constitutional challenge against the law on Tuesday. Who would oppose such a move? Presumably not employers who want freedom to negotiate terms of employment and dismissal. Presumably not unions whose size and power will soar if 7-million potential members get jobs with rising incomes thanks to competition for labour. Presumably not the government because it is the worst victim of labour law, having faced more demands, lost hours and labour-related unrest than it ever did under anti-apartheid mass action. Presumably not the nongovernmenal organisations that care about the poorest of the poor.
So will the case go unopposed? Of course not. There will be government, union and do-gooder opposition compelled by myth and circumstance to protect workers from “exploitation”. Left of centre economist Joan Robinson reputedly said minimum wages protect workers from exploitation by throwing them out of work. African-American economist Thomas Sowell said all minimum-wage laws fix the minimum at zero because they condemn the unemployed to zero income. Eustace Davie’s practical compromise is to allow the unemployed to choose between earning something and nothing.
Surely our common goal should be to allow people to work and earn money to put food in their bellies and a roof over their heads.