COSATU to fight Free Market Foundation

The Congress of South African Trade Unions will strenuously oppose the constitutional challenge, launched on 5 March 2013 by the Free Market Foundation (FMF), to the extension of bargaining council agreements to non-parties.

This is nothing less than a war against the entire labour relations regime, with the aim of leaving workers defenceless against even more ruthless exploitation by employers than they suffer already and plunged into even deeper poverty.

The FMF will argue that the participants in bargaining councils are "private actors to whom the state cannot delegate powers of statutory regulation without violating the constitution; and, secondly, that the Labour Relations Act, by distorting the provisions of majority rule, permits a minority to coerce the majority into complying with standard sets of terms and conditions of employment".

If the FMF have their way, collective bargaining agreements will not be worth the paper they are written on. If they are not binding on all employers in the sector they cover, they are in effect nothing more than voluntary agreements. If firms can legally employ workers on lower pay and worse conditions than in the agreement, how can those who signed the agreement be expected to comply?

They will not be collective agreements at all, but a free-for all, where employers can pay whatever wages they can get away with. It will inevitably lead to a race to the bottom, as firms compete to cut their labour costs, ending with starvation wages, no protection of workers' human rights and naked exploitation across the sector.

Even in its current form, the collective bargaining system has failed to meet all its objectives. The number of workers covered by bargaining council agreements has been falling. Only 2.4 million of the workforce is covered and many of these bargaining councils are not national. More workers are covered by Sectoral Determinations than by bargaining council agreements - 3.5 million workers.

Far from weakening collective bargaining we need to strengthen it and enforcing agreements more systematically. We need new policies and regulatory frameworks to promote wall to wall centralised bargaining, and a developmental bargaining framework which promotes wage equity, and aligns centralised bargaining with industrial and economic development strategies.

In many sectors collective bargaining is already voluntarist and widely evaded by employers. That is why we insist that bargaining council agreements must cover non-parties, so that all firms within the sectors are bound to implement the collective decisions, the very thing the FMF is now fighting.

All these matters will be discussed next week at COSATU's Collective Bargaining Organising and Campaigns Conference.

It is quite clear however that the FMF's target is not just collective bargaining but the entire body of labour legislation. As our affiliate SACTWU says, this is a direct attack on workers' fundamental human rights.

This becomes crystal clear from comments by FMF Chairman, Herman Mashaba, who talks about "giving people the freedom to decide for themselves what kind of jobs they want to do, what amount of pay they are prepared to work for, and what conditions they are prepared to work under. It is about their freedom to make their own decisions about their own lives. It is the sole right of unemployed people to decide what jobs they consider to be better than no job at all......to decide what job is a "decent" job. No one has the right to take away that decision-making power from desperate people. It is evil to do so". 

This fanciful scenario is based on the absurd fallacy that employers and workers are equal players, each with the "freedom" to decide how they will act. The reality is that the relationship between employer and worker is like that between master and slave. That is why Karl Marx described the capitalist system as being based on wage slavery.

As individuals, workers are utterly powerless, forced to accept whatever pittance an employer offers. No employer negotiates with individuals; they tell them what they will be paid and that they can take it or leave it.

It is only when workers get organised in trade unions that they can have any meaningful negotiations with employers, and, if necessary strike, to improve their wages and working conditions. But even then, in a capitalist economy they are not equal partners. The owners of the means of production, distribution and exchange always have the upper hand.

That is why trade unions around the world have campaigned for, and often won, government legislation to protect their rights - to bargain, to secure minimum levels of pay and conditions, and to safeguard their basic constitutional and human rights.

That is the origin of collective bargaining councils, the CCMA, labour courts, sectoral determinations, etc. None are perfect and need constantly to be reassessed and made more effective. But to destroy these institutions or render themselves powerless to defend workers would be a disaster. It would lead to a chaotic free-for-all.

Even most responsible employers see the benefits of centralised bargaining as a way of simplifying and rationalising the process, by delegating it to a collective body of employer and worker representatives.

The FMF, however, is motivated by pure greed. They want to crush workers' collective strength so that they, as employers, can maximise their profits and get even richer. They must not succeed.

But their arguments are also based on a fundamental economic error. They justify their case by saying they want to create jobs, at whatever wage the market dictates, i.e. the lowest possible, so that employers will take on more workers, on the basis that any job is better than none, or a quarter of a loaf better than none.

Apart from the callous inhumanity of such an attitude, they fail to see that if collective bargaining collapses, wages plummet and workers have less to spend, it will aggravate a problem we already have in the economy of a dangerously low level of demand for goods and services, as a result of our high levels of unemployment and poverty.

Further cuts in wages, while they will benefit individual employers in the short run by cutting their labour costs, if they become generalised will  lead to even less money in people's pockets, less money being spend in the shops, less goods being produced and fewer services provided, and therefore more retrenchments, fewer new jobs and more bankruptcies.

Former President Lula in Brazil faced very similar problems of unemployment, poverty and inequality as South Africa, but he did exactly the opposite of what the FMF are calling for. Minimum wages and social grants were increased and cheap loans made available for emerging small businesses. These not only made Brazil a more equal society and improved the quality of life for the poor, but led to faster economic growth, more sustainable new jobs and lower inflation.

That is what we need here, not the FMF's deranged fantasies. We are confident that the courts will throw out their case, but COSATU and its affiliates will be opposing the FMF court challenge every inch of the way.

Despite using utterly spurious arguments about "freedom to choose", they reflect the very worst features of capitalism - greed, indifference to people's suffering and contempt for the very workers who create their wealth that yields their enormous profits. If successful would reverse every advance workers have made since 1994. They must not win this case!

Statement issued by Patrick Craven, COSATU national spokesperson, March 8 2013

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