New labour laws will kill jobs - Ian Ollis

DA MP says govt's own report believes legislation to be harmful

Labour laws: Government commissioned report shows proposed legislation is job killer, probably unconstitutional

It is of profound significance that the regulatory impact assessment commissioned by the Department of Labour on the four new labour bills gazetted last month shows that the proposed legislation would place literally millions of jobs in jeopardy, would in all likelihood be unconstitutional, would have "serious destabiling effects in the labour market", and would result in "significant" other unintended consequences.

The DA this morning is releasing the full contents of this regulatory impact assessment, which was carried out by Prof. Paul Benjamin, Prof. Haroon Bhorat and Ms. Carlene van der Westhuizen, at the behest of the Department of Labour. The report is available for download.

The report concludes that:

-- The proposed creation of a "presumption of indefinite employment" restricts the legitimate role of fixed-term contracts, and places in jeopardy the jobs of a significant portion of the 2.13 million workers classified as fixed-term, temporary or seasonal. The report concludes that the bills would therefore almost certainly exacerbate South Africa's unemployment crisis.

-- The bills would "effectively prohibit labour broking", which would risk violating the Constitution, insofar as they would violate the protected right to choose a trade, occupation or profession freely, and would violate the right to fair labour practices. The report also concludes that such a move would "place South Africa in breach of international obligations" and would "have serious destabilising effects in the labour market", leading to "increased levels of unemployment in the country [and] ... depriv[ing] the households attached to these workers of a valuable source of wage income."

This provision of the proposed legislation would also have the unintended consequence of prohibitively increasing the number of cases referred to the CCMA, Labour Courts and civil courts, which the report concludes would potentially have "significant budgetary implications", that at present have not been addressed.

-- The proposed co-responsibility between parties to sub-contracting and out-sourcing arrangements would have "anomalous" legal consequences.

The fact that the very report commissioned by the Department of Labour to adjudge the effect of these proposed laws has found that they will cause enormous damage to the South African economy, is of manifest significance. The report makes it abundantly clear that the proposed laws cannot proceed in their present form, and that a number of problematic provisions must be scrapped, if we are to avoid further exacerbating South Africa's unemployment crisis.

The DA will be presenting its full analysis of the impact of these labour bills at a press conference in Parliament on Monday; in the mean time, the contents of this report will no doubt be highly concerning for the more than two million South Africans whose jobs have been placed in jeopardy by President Zuma's reckless pandering to union ideologues.

Statement issued by Ian Ollis MP, Democratic Alliance Shadow Minister of Labour, January 16 2011

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