Small businesses must be protected from big unions

Media statement

30 June 2014

The DA will write to the Minister of Small Business Development, Lindiwe Zulu, requesting she advocate for the exclusion of small and medium business enterprises from collective bargaining agreements which they are not signatories to through amendments to the Labour Relations Amendment Act. 

This follows on-going strike action within the metal and engineering sector post the signing of an agreement between major workers' union NUMSA and major employers' association, Steel and Engineering Industries Federation of South Africa (SEIFSA) - bringing a partial end to a 4 week long strike in the metal and engineering sector.

Sustained strike action within the sector comes as a result of continued haggling over wage disputes between NUMSA and the smaller employers' association - representing 3000 small and medium size businesses - the National Employers' Association of South Africa (NEASA).  

NEASA, which is currently not bound to the terms of the NUMSA-SEIFSA agreement, has threatened to challenge the agreement should it be formally gazetted by the Department of Labour, thus extending the wage-settlement agreement to non-signatories within the sector. 

NEASA maintains that its members cannot afford the 10% annual wage offer for three years agreed to by SEIFSA and NUMSA. 

The current state of affairs illustrates how the two-tier system of labour bargaining councils prejudices small and medium enterprises. NUMSA and the large employers dictate terms to the small and medium enterprises who are vulnerable and often operate on much thinner profit margins than their larger counterparts.

Protracted strike action of this nature only serves to deny workers of needed income, reduce productivity at businesses and threaten existing and future jobs within the sector.

To afford small businesses and their workers better prospects, the DA ‘s position is -  

·         We support the system of collective bargaining as an institutional mechanism to encourage collaborative conversations between business and labour;

·         That the extension of collective bargaining agreements to non-parties does not serve this purpose and has caused it to become another means to establish economic insiders and outsiders;

·         We believe that collective bargaining agreements should only apply to entities and organisations that were party to the agreement; and

·         We support a nuanced approach to bargaining agreements that take the unique conditions, markets and products of businesses in different areas in the country into account.

This is an issue which the Minister needs to urgently address with her colleague, Labour Minister Mildred Oliphant. South Africa cannot afford a two-tier bargaining system which unfairly prejudices the smaller players in the economy, where most of the job creation is expected to come from.

The DA will continue to fight for the creation of a business and labour environment that continuously creates job opportunities for all South Africans.