Fin24 reports President Cyril Ramaphosa took business and labour by surprise when he announced in his State of the Nation (SONA) address that he wanted a new social compact within 100 days.
Excluding weekends, 42 days will have slipped away by Monday. Separate engagements between government and the social partners are starting to pinpoint the issues. However, with the clock running, the parties have yet to meet together in one forum. The issues up for discussion at talks on a social compact are taking shape as labour law reform, a basic income grant, investment targets for the private sector, and a debt-equity swap by government pension money for Eskom. Labour market regulation, which has not featured in social compact talks for over a decade, has returned to the agenda. While in the 1990s and 2000s business organisations pushed firmly for reforms of rigidities, such as the ease of hiring and firing, they drew a blank every time. Now, it seems that government wants it on the agenda, with a view to a labour market that works for everyone, not just the unionised. But, to extract concessions from organised labour will be no easier than in the past. Ending the arrangement that allows bargaining councils – made up of big labour and big business in specific sectors – to extend wage agreements to small employers is ajudge to probably be the best shot at reform. It will be more difficult to persuade labour to agree to other things, like exempting small businesses from labour laws, or making more concessions on exemptions to the minimum wage. Government also hopes to put wage moderation on the agenda. From labour’s side, a basic income grant and how to fund it are near the top of the list. Labour has not given up on its desire to see the Eskom debt problem mitigated by using government pension funds. From business, government wants to extract commitment to a higher rate of investment. Some in business, like Business Leadership CEO Busi Mavuso, have questioned if a new social compact is necessary, when existing commitments made in the Economic Reconstruction and Recovery Programme a little less than a year ago have covered this ground.
- Read the full original of the insightful report in the above regard by Carol Paton at Fin24 (subscriber access only)
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