M Mdladlana: Chemical, Energy, Paper, Printing, Wood and Allied Workers
Union National Collective Bargaining Conference

19 March 2009

"Economic and political challenges facing workers and trade unions in
2009"

Programme director
President, General Secretary and your Executive Committee
Worker leaders and shop stewards
Comrades
Ladies and gentlemen

Let me express my sincere appreciation for inviting me to this important
conference. Your collective bargaining conference comes at a crucial time when
the debate about decent work, increased job losses, poverty alleviation and
employment creation has intensified and the workers agenda has once again taken
centre-stage.

We are living in a world of incredible change. 24 years ago the word
"globalisation" had not been so commonly used. The Berlin wall was still in
place. It was during those years that the neo-liberal arrogance was displayed
in promoting economic fundamentalism.

We are told globalisation cannot be changed. They say we must adapt to
globalisation, we must expose this lie. It is simply not true. Policies have
shaped globalisation and policies can be changed. If the model that we see of
globalisation does not change, it will not survive.

A globalised economy that does not deliver decent work to all will fail.
People in the streets of our country want "work." Work to meet the need of
their families in safety and health, educate their children, offer them income
security after retirement, they want work in which they are treated decently
and their basic rights are respected. One writer once said: "you cannot build
and automobile economy on bicycle wages." Well in my view, you cannot build a
strong economy ignoring workers' rights.

That is why the African National Congress (ANC) government succeeded in
building and maintaining a strong economy. The ANC is in alliance with Congress
of South African Trade Unions (COSATU), South African Communist Party (SACP)
and South African National Civic Organisation (SANCO) and other democratic
movement structures. That therefore makes us strong, as we are owned by the
social partners through National Economic Development and Labour Council
(NEDLAC) – mobilising the power of tri-partism. No other political party will
ever do this.

For over 97 years the ANC has led the struggle to bring about a South Africa
that belongs to all our people, black and white. From the beginning, we held
together the unity of the African people in their struggle for freedom and
dignity. We moved on to embrace the unity of all South Africans, irrespective
of their race, culture or religion. It is this unity that is a source of our
strength.

On 27 April 1994, we opened a new chapter in the history of our struggle, to
build a common citizenship and equal rights for all South Africans. The ANC has
always stood for basic democratic principles that include:

* a Constitution that guarantees human rights for all
* the mobilisation of our people to actively take part in decision making
processes that affect their lives
* equality and freedom from discrimination on racial, gender or any other
ground
* worker rights, collective bargaining, freedom of association and freedom of
religion.

We are very proud of our past and very confident of the future. We are the
only party in this country that is proud of its past and confident of the
future. We changed no names. We did no changes on logo. We need no new
branding. The ANC lives and the ANC leads.

The ANC does not fear winning elections convincingly. The ANC want a two
third majority. The ANC want a strong state and a state that can intervene. A
strong ANC and a strong state.

As I indicated in the beginning, the global economic crisis has befallen us.
This is now posing a very serious threat to our revolution, to our achievement.
It is threatening our hard earned gains in relation to jobs and wage security.
The global credit crisis now threatens to roll back the gains of the ANC led
government. This is becoming increasingly evident with intensified job losses,
particularly in the mining and manufacturing industries, which have triggered a
seemingly irreversible slowdown in economic activity in the country's major
sectors.

Reports affirm that tens of thousands of jobs are being lost in a number of
sectors – mining, manufacturing and the retail sector. Many motor dealerships
are being liquidated, with adverse effects for workers in the motor, components
and metal engineering industries. And I am sure that the sectors in which
CEPPAWU organisers are also feeling the negative effects of the downturn.

All we can safely say at the moment is that it is not inevitable that South
Africa will move into economic crisis. A very important factor will be the
extent of job losses – the more jobs are lost, the more we lose productive
capacity, the more demand weakens and the more workers suffer. This will worsen
our chances of avoiding the crisis and it will make it more difficult to
recover at a later stage. So, stemming the rising tide of retrenchments is
critical for us all. What will also be critical will be high-quality and
courageous leadership from government, business and labour – and there will not
be much room for mistakes.

The social partners that comprise the Presidential Economic Joint Working
Group, organised labour, business and government; have been meeting since
December 2008 to consider how South Africa should respond to the more difficult
economic conditions that we now face. Since January, the social partners have
met in a forum convened by NEDLAC, in partnership with the Presidency, and
including the NEDLAC Community constituency to agree on a collective response
to the challenges that face us.

We now have a united response that is set out in a statement called the
Framework for South Africa's Response to the International Economic Crisis.
This framework contains a number of joint commitments that address the
following areas:

* Investment in public infrastructure
* Macroeconomic policy
* Industrial and trade policy
* Employment measures
* Social measures

During this month, we are engaging in structured interaction with organised
labour and business to look at concrete, short-term responses that can help us
to avoid the crisis, but that can also strengthen our economy and position it
to take full advantage of the upturn in economic activity when this comes. As
the joint statement by the social partner's states:

"We need social solidarity between all South Africans to ensure that the
crisis does not damage the fabric of our society. Those with greater means have
a responsibility to those without such means. Our collective responsibility is
to work together to withstand the crisis and ensure that the poor and most
vulnerable are protected as far as possible from its impact. We must also
ensure that the economy is ready to take advantage of the next upturn and that
the benefits of such growth are shared by all our people."1

However I need to caution against following the American response because
they are not putting conditions as a result those banks that were bailed out
used the money to pay bonuses while retrenching the workforce. Secondly the
American option is inwardly looking.

This is a global crisis therefore the rich countries must look beyond their
boundaries – they caused the crisis. There is an expression which says: "If
America sneezes the whole world catches cold" but what happens when America has
pneumonia, I ask. That is why here at home we prefer the route of adopting a
comprehensive strategy as a response to the crisis. We believe in social
dialogue. Social dialogue is crucial to balance conflicting interest especially
at this stage.

Why are managers of these companies not informing and consulting their
workers before they take drastic decisions? Workers are more than willing to
contribute and in making decision about their lives. All possible measures
should be considered except terminations or retrenchments. Counter productive
measures must be avoided.

Executives of these companies must re–align their pay, dividend policies.
They must adapt their bonuses or reward system to the current system (of course
this has other unintended consequences).

Training and re–skilling should also be considered as well as social
security.

Collective bargaining in 2009

As you develop your strategies for the collective bargaining round this
year, you will have to consider very carefully the special circumstances that
face us, it will be business unusual for you as well as for us in
government.

The problem that worker leaders should be grappling with is how the economic
downturn is affecting workplaces and how it is affecting our communities. There
will be differences between companies in different sectors and communities will
also be affected in different ways depending on where they are located and
where the livelihood of workers in those communities comes from.

Many employers have made it known that they cannot cope. We have heard this
cry in the motor industry which is one of the bigger employers in the country.
The same is going to happen with many other employers, big and small. But as
employers plead poverty, it will be important for you to look carefully at
where there are genuine problems of sustaining businesses and where the
pressures are not so great. Demands during this year's round of bargaining
should be shaped, as far as possible, by a shared understanding of the
challenges that face the companies where you find yourselves. You will also
need to prepare yourselves for discussions about mechanisms that can address
cost pressures where these are a problem for companies.

The same challenge of developing a shared understanding of the economic
situation will be experienced at centralised bargaining forums. At council
level, the parties will need to consider the economic situation facing
companies that fall within the scope of the council and not only the large
companies, but especially smaller companies that may be more vulnerable. We are
already hearing that employers within some bargaining councils are failing to
comply with their obligation to pay contributions to levies and to social
benefit funds that are administered by bargaining councils. This is not
acceptable and unionised workers and shop stewards should ensure that their
employers continue to pay the required levies and social benefit fund
contributions to bargaining councils as required.

As government, we are urging companies to do everything in their power to
avoid retrenchments as a result of the economic situation. Instead of starting
with retrenchments, companies should explore all possible alternatives, such as
constraining bonuses for the executive. Where you can, I would urge you to work
with your employers to use the downturn as an opportunity to invest in training
and re-skilling and to modernise productive capacity in anticipation of the
opportunities that will emerge after the global economic recovery.

The Commission for Conciliation, Mediation and Arbitration (CCMA) which is
our dispute resolution body is already very busy facilitating discussions
between employers and trade unions that are exploring alternatives to
retrenchments in terms of section 189A of the Labour Relations Act (LRA). And
the number of dismissal disputes has also increased the work load of the CCMA.
You will need to be vigilant. Where downscaling or retrenchments do arise,
proper legal procedures and processes must be implemented. In this regard,
employers have to, inter alia, and comply with:

* Section 189 of the LRA
* The code of good practice on dismissal based on operational
requirements
* The relevant sections of bargaining council collective agreements.

A recession does also offer opportunities for trade unions, however. There
will be many workers looking to join unions to access the protection and
benefits that trade unions provide. In some sectors, there are thus likely to
be opportunities for expanding membership and I hope that CEPPAWU will take
advantage of this wherever possible. We need strong unions now more than ever
and we need to strengthen our collective bargaining system, including our
bargaining councils.

Elections 2009 - why it is important for workers to vote?

Having highlighted some challenges for collective bargaining, especially the
problem of the economic downturn, I want to stress how important it will be for
workers to vote and vote correctly (for the ANC) on 22 April 2009. Vote for a
government experienced enough to tackle the issues head on. Every worker's vote
is important.

The ANC led government will be able to withstand the economic situation and
ensure that we return to a period of growth because it has managed to create
jobs at a faster rate and provided more economic opportunities than was the
case prior to 1994.

Sound management of the economy and better use of national resources has
seen the economy grow every year since 1994. Investment has increased as a
share of Gross Domestic Product (GDP) from 15 percent in 2002 to 22 percent in
2008.

In recent years the economy has for the first time been creating jobs faster
than the rate at which new people have entered the job market. On average half
a million new jobs have been added to the economy every year since 2004,
reducing unemployment from 31 percent in 2003 to 23 percent in 2007.

The Expanded Public Works Programme (EPWP) has created a million work
opportunities a year ahead of its target and we expect that the EPWP will
create two million jobs for poor and unemployed people during its second
phase.

ANC government policies such as black economic empowerment (BEE) and
affirmative action have contributed to the growth of South Africa's black
middle class by 2,6 million in 2007 and small business support has been
streamlined and expanded.

These are just some examples of how we have benefited workers and their
families. You will also know that our election manifesto makes the creation of
decent work opportunities and sustainable livelihoods the primary focus of our
economic policies going forward. And we will be coming back into office after
April with a clear agenda to regulate contract work, subcontracting and
outsourcing and to address the problem of labour broking.

As an ANC led government we are committed to decisively defend the South
African economy in the present climate and to take measures to advance our own
developmental agenda, to avert or minimise job losses, protect vulnerable
sectors and cushion the poor from the downturn.

We will need your support – not only in the election – but as key social
partners in addressing the challenges we face. So, strategise carefully for
this years round of collective bargaining and remember the saying of an old
worker leader who once told me:

"Success will be measured not by the amount of egg yolk on the ground, but
by the number of eggs that survive to hatch."

I thank you.

Issued by: Department of Labour
19 March 2009