You will recall that one of the key outcomes of the meeting Business had with President and members of the Cabinet in February was a business developed view on how the targets of the NDP, particularly those related to economic growth. As per previous correspondence to yourselves, the intention was for business to identify what is necessary for the South African economy to reach these growth objectives. While highlighting government’s role in achieving this, members were also requested to give specific focus on the private sector role in making this possible.
Please find below a consolidated report on the above for your comments. We are in the process of confirming a follow-up meeting with President Zuma and Cabinet, which will most probably be confirmed for early in June. This document will form the basis of the agenda for that follow up meeting, as agreed at the previous engagement.
Members [of SACCI] are requested to send their comments to firstname.lastname@example.org by Tuesday, 28 May 2013.
At the Presidential meeting with business in early February 2013 business agreed to submit a paper elaborating on what business as a collective can do and what it believed government should do in order to achieve the NDP inclusive growth targets.
The five themes addressed are:
1. Maximising the economic growth and social development benefits arising from the public sector infrastructure programme
2. Developing skills and preparing young people for the world of work
3. Enhancing basic education outcomes
4. Reducing policy uncertainty and lowering the cost of doing business
5. Renewing South Africa’s labour market.
1. Maximising the economic growth and social development benefits arising from the public sector infrastructure programme
The government’s infrastructure programme should not be seen as a new initiative, but rather as part of a coherent, continuous planning process. It should be based on six key values:
- Urgency: The country faces serious socio-economic challenges and the proposed programmes need to be implemented expeditiously.
- Collaboration: Every sphere of SA society needs to take responsibility for the implementation of the NDP. Old and false divisions between government, business, labour, rural, urban and so forth need to be set aside. A truly national effort is required. This requires that each of these groupings have to move beyond their narrow self-interest.
- Innovation: The old ways of doing things must be challenged: be it procurement, business models, funding models or institutional arrangements. Innovative approaches must improve efficiency of delivery, optimise development impact and reduce costs.
- Focus: Scarce resources demand a focused approach. Both programmes and projects within overarching programmes must be realistically and clearly prioritised.
- Integration: Efficiencies and development impact are greatly enhanced when infrastructure and private sector investment programmes are holistically planned for a geographic area or sector.
- Transparency: so that all stakeholders, and indeed the South African public, understand the purpose, costs and progress of these projects
Business believes the time is right for government to take business into its confidence and to share the infrastructure investment plan in greater detail. This will:
- Solicit greater levels of support by business for the infrastructure build programme;
- Alert the private sector to the nature, scope and location of the proposed projects and allow them to provide inputs into the programmes;
- Inform business of the underlying developmental approach and objectives incorporated into the programme; and
- Due to long lead times inherent in infrastructure projects, assist the private sector to plan their resource allocations and improve their “state of readiness” for implementation.
- Allow business to plan its investments in accord with public infrastructure investments and so enhance overall coordination
PROPOSAL ONE: CREATE A JOINT BUSINESS GOVERNMENT STEERING COMMITTEE FOR EACH OF THE 17 STRATEGIC INFRASTRUCTURE PROJECTS (SIPs) TO EFFECTIVELY COMMUNICATE THE PURPOSE, PLAN AND TIMETABLE FOR EACH PROJECT.
It is critical that the projects are deliberately designed for optimal development impact. Each SIP needs to specifically indicate development targets in the following areas:
- Involvement of SMMEs in construction;
- Setting minimum local content and labour requirements;
- Enhancing project linkages and the integration of projects;
- Encouraging youth employment and skills transfer; and
- Ensuring that project budgets include provision for maintenance and that this responsibility is clearly allocated to the appropriate authority.
PROPOSAL TWO: GOVERNMENT TO SET DEVELOPMENTAL TARGETS FOR EACH OF THE SIP PROJECTS
State procurement is widely recognized as an area of both inefficiency and corrupt practices. Procurement practices need review and should be located in the wider context of modern supply chain management best practice. A small expert panel should be constituted by Government, drawing on the best expertise from within government, business and the international community.
PROPOSAL THREE: ESTABLISH AN EXPERT PANEL TO REVIEW AND REVISESTATE PROCUREMENT PROCEDURES DRAWING ON GLOBAL BEST PRACTICE
Infrastructure projects are being delayed by water use licensing and other forms of environmental regulation. The Department of Environment and Water Affairs needs to review both law and regulatory processes in this area working together with representatives of the organised construction industry.
PROPOSAL FOUR: DEPARTMENT OF ENVIRONMENT AND WATER AFFAIRS TO REVIEW WATER USE AND OTHER FORMS OF ENVIRONMENTAL REGULATION
Government is undertaking the largest investment in infrastructure in our country’s history. Business has offered very specific assistance to the SIP1 Programme Team to assist with the development of pragmatic funding models. It will be critical for business to ensure that all potential private sources of finance are mobilised in support of the infrastructure programme,
PROPOSAL FIVE: INVESTIGATE ALTERNATIVE FUNDING MODELS AND ENSURE THAT ALL POTENTIAL SOURCES OF FINANCE ARE MOBILISED AND THE FINANCIAL SERVICES IN THE PRIVATE SECTOR UNDERTAKE TO PLAY AN ACTIVE ROLE IN THIS REGARD
2. Developing skills and preparing young people for the world of work
The Artisan and Technician Development Monitoring and Evaluation Team (ATD-MET) of the Human Resource Development Council (HRDC) has made good progress in a number of areas in artisan development. In the year ending March 2012, 24 378 new artisan learners were registered for training against a target of 30 000 (as pre determined in the Skills Accord), and 13 168 learners completed their trade tests against a target of 10 000. However, preliminary reports for the year ending March 2013 indicate that registrations of new learners have fallen back to around 16 000 against a target of 25 000, while completed learners for the year have fallen back to around 8 000 against a target of 12, 000. The final figures will be validated during April by the DHET, but indications are that, there has been a serious reduction in artisan development in the country over the past 12 months or so.
The estimated cost to train an apprentice over a three year period is R350 000 exclusive of the value add to the company of R115 000. The SETA grant (comprising skills levies paid by business) over the three years is R140 000 and the costs to company R110 000. Many small businesses experience difficulties in accessing the SETA grant.
PROPOSAL SIX: ENSURE THAT THE ALREADY DESIGNED STANDARD FUNDING PACKAGE FOR THE COST OF APPRENTICESHIP TRAINING, WITH ITS AGREED SPLIT OF COSTS BETWEEN GOVERNMENT AND EMPLOYERS IS READILY AVAILABLE TO ALL EMPLOYERS.
WHERE SETAS PROVE TO BE EITHER UNWILLING OR UNABLE TO ADMINISTER THIS PACKAGE AN ALTERNATIVE DELIVERY MECHANISM MUST BE DESIGNED.
As a consequence of our history artisan trades have been fragmented. There is certainly a case for reviewing existing artisan demarcations to better serve a non-racial workplace, and also to take account of the dramatic developments in technology in many traditional trades.
Western European countries like Germany and Switzerland have developed a much broader concept of apprenticeship which is applied to the preparation for almost every kind of job in the economy whether blue or white collar. Serious thought should be given to the creation of new areas for apprenticehip in South Africa as this probably offers the most effective entry bridge for young people into the world of work. Some good work in the area has been undertaken by the Quality Council for Trades and Occupations. The remit of this body needs to be expanded.
PROPOSAL SEVEN: ESTABLISH AN EXPERT PANEL TO CONSIDER BOTH MODERNIZING AND EXTENDING THE ARTISAN / APPRENTICESHIP SYSTEM
The Further Education and Training (FET) colleges
For far too long South Africa’s national education system has been focused almost exclusively on preparing learners to enter university. University training is not approporiate for many jobs and career paths in our national economy. FET colleges are intended to offer a non-university based pathway for higher education. However these colleges, resulting from the merging of former technical colleges, occupy a confused and confusing place in both our national education and economic contexts.
PROPOSAL EIGHT: A COMMISSION THAT IS ENABLED TO TAKE AN INDEPENDENT VIEW ON VOCATIONAL (NON UNIVERSITY) EDUCATION, INCLUDING THE MANDATE FOR THE FET COLLEGES SHOULD BE ESTABLISHED.
Cost sharing schemes to promote the employment of young labour market entrants
There is an urgent need to find a bridge for young people to enable them to enter the world of work. A number of initiatives on the part of the business community to address this issue have begun to yield results. The challenge for business is to ramp up support for these programmes. The task for government is to implement proposals to share the costs of both training and employment in these schemes.
Business has already endorsed the following two youth development programmes:
Harambee is funded through a combination of employer fees and a grant from the Jobs Fund. Young South Africans from poor families who are unemployed but who have the appropriate aptitude and attitude are matched to entry level roles in partner-employers. They are prepared for work thorough a “matching and bridging” programme. Harambee has placed young people into full time sustained work opportunities in many sectors. Retention rates have been above average with some 90% of the first cohort still employed after 18 months.
The South Africa Football Association (SAFA) is implementing an ambitious soccer development plan, through an autonomous Development Agency. 3 million registered soccer players, 20,000 registered clubs and 80,000 teams are to be mobilised. Soccer administrators for the 9 provinces, 52 regions, 311 local football associations and their 20,000 registered clubs as well as 10,000 match referees will be trained. National leagues under 13, under 15, under 17 and under 20 age levels will be renewed. Businesses can improve existing patterns of youth activity, develop talent and create jobs related to a mass-based leisure activity.
PROPOSAL NINE: FINALISE AND IMPLEMENT SCHEMES TO SHARE COSTS WITH EMPLOYERS OF BOTH EMPLOYING AND TRAINING YOUNG SOUTH AFRICANS
3. Enhancing basic education outcomes
A common purpose
The ability of business to generate value, particularly when operating on a global platform, is profoundly affected by the quality and output of the education system. The shortage of relevant skills across all sectors is a significant constraint on the business sector currently, but this skills shortage cannot be addressed by action in the area of further education alone. The ability of new entrants into the labour market to learn the skills they require is dependent on the quality of their basic education. These include, ‘softer’ skills such as the ability to communicate effectively. Literacy, maths and science and adult literacy remain significant areas of concern
In this context, BUSA welcomes the holistic approach to education adopted in the NDP. The NDP acknowledges that “lifelong learning, continuous professional development and knowledge production alongside innovation are central to building the capabilities of individuals and society as a whole.”
National Government spent of over R200bn on education in 2012. Business, CSI funding for education accounts for a relatively small proportion, approximately 1.5%, of the national education budget. In this context, the onus is on business to work with social partners, and particularly government, to find ways of directing its CSI spend in a way that has a more sustained impact on learning outcomes.
Principles underlying a new model of partnership
The following are the principles which would underpin a more effective collaboration model:
- Recognition that government is the lead player and source of expertise on matters of national development policy, and that within government, the DBE and the provincial departments of education carry accountability for education policy and determine how national education budgets are applied.
- Acknowledgement that effective private sector support for education is most likely to be effective if undertaken within the framework of this policy.
- Recognition that education projects supported by business must be undertaken in a way which seeks to build capacity in government, rather than outside of it.
- A pre-requisite for the private sector to contribute to public/private sector projects is the establishment of independent governance structures. These will give contributing businesses oversight of how funding is allocated and the ability to measure progress and outcomes.
- Many businesses focus their CSI support for education through contributions to communities close to their operations. A collaborative model therefore needs to provide for local projects. The contributions of companies at a local level need to be brought together with national education strategy to achieve sustainable outcomes.
In order to give effect to these principles, there needs to be an ongoing dialogue as between business and government
PROPOSAL TEN: CREATE A BUSINESS/GOVERNMENT EDUCATION COUNCIL.
This council would function in a manner similar to the partnerships established by the Business Trust and Business Against Crime.
This council would be tasked with developing more effective forms of business support for our national schooling system and further developing the ideas contained in the Basic Education Collaboration Framework. In particular the council would act as a thought leader in regard to:
- Effective governance structures for channelling private sector funding and expertise into education projects both at national and provincial level
- Agreement of a set of guidelines for private sector participation in education
- Communication with business stakeholders
- Linking community-based education initiatives into national education strategy
- The role of civil society organisations
Business has additionally given support to the Programme for Improving Learning Outcomes, which has been developed through the National Schools Partnership process, and is a project which in our view meets the expectations of joint education initiatives. The programme has developed three integrated support interventions for learners, schools and districts, supported by programme management capacity and will be piloted in KwaZulu Natal, as a proof of concept with local ownership.
4. Reducing policy uncertainty and lowering the cost of doing business
Uncertainty always impacts adversely on investment. Of fundamental importance, is government policy in respect of property rights. Investors require certainty as to their property rights. This entails clear and well defined procedures in relation to the acquisition and disposal of property that are embodied in law. One important factor constraining business investment currently in South Africa is some degree of uncertainty as to government policy in respect of property rights.
Well defined property rights are particularly important to long term investments that are fixed and non-footloose. In South Africa, there is some uncertainty as to property rights in two sectors – mining and agriculture. Investments in these sectors are long term, fixed and non-footloose. Uncertainty as to property rights adversely impacts upon investment in these two sectors.
In the mining sector, one important reason that South Africa did not benefit from the last “commodities boom” was that the advent of the boom coincided with increasing uncertainty as to mineral rights. Lack of clear procedures encouraged some companies to engage in dubious practices in order to secure their rights. Many analysts are of the view that commodity prices will be robust well into the future and there is no question of the considerable “raw” and still untapped mineral potential of South Africa. Certainty as to mining property rights will considerably enhance investment.
In agriculture, government is particularly concerned to ensure more equitable ownership. This is a laudable aim and is strongly supported by business. There is widespread recognition that only limited progress has been made in this respect. At the same time, there is concern that the number of farmers have been declining sharply and while the picture is mixed, output growth has been limited and there are concerns as to national food security.
Government is, of course, currently engaged in attempting to clarify property rights in relation to both the mining and agricultural sectors. It is imperative that this be completed timeously and that any resultant legislation is well defined, clear and subject to legal processes and procedures. Business offers its support to government in this endeavour.
PROPOSAL 11: BUSINESS AND GOVERNMENT ENGAGE IN A FORMAL DISCUSSION PERTAINING TO PROPERTY RIGHTS IN THE MINING AND AGRICULTURAL SECTORS. THIS DISCUSSION IS UNDERTAKEN WITH AN AGREED OBJECTIVE OF ENSURING GREATER CERTAINTY AS TO PROPERTY RIGHTS SO AS TO ENHANCE INVESTMENT WHILE SIMULTANEOUSLY ACCOMMODATING OTHER SOCIO-ECONOMIC OBJECTIVES OF GOVERNMENT.
Lowering the costs of doing business
The costs of doing business and the burden of regulations impacts upon all businesses but they particularly impact adversely on small businesses and start-ups.
Two thirds of respondents to a BLSA survey in 2010 identified regulation as a constraint on further growth. A recent survey by Small Business Partners (SBP) showed that red tape has a direct impact on the bottom line with anything between 3% and 6% of turnover being wasted on bureaucratic duties. Firms employing less than 21 people are spending 5% of their turnover on meeting the regulatory burden – more than twice that of firms employing more than 40 people. Moreover, there is clear evidence that regulatory costs are comparatively high in South Africa. The World Economic Forum report for 2012 ranked South Africa 123 out of 144 countries in terms of the burden of government regulation.
Government is aware of the problem. In February 2007, Cabinet accordingly decided on the need for a consistent assessment of the socio-economic impact of legislation and regulations. The approval followed a study commissioned by the Presidency and the National Treasury in response to concerns about the failure in some cases to understand the full costs of regulations and especially the impact on the economy.
The National Development Plan similarly sees lowering the cost of doing business and regulatory reform as central to enhancing growth, employment and entrepreneurship “Some 90% of jobs will be created in small and expanding firms. The economy will be more enabling of business entry and expansion, with an eye to credit and market access. By 2030, the share of small- and medium-sized firms in output will grow substantially. Regulatory reform and support will boost mass entrepreneurship.” (Emphasis added).
However, despite government’s commitment to reducing the regulatory burden, there are clear indications that the burden has, in fact, been increasing. South Africa’s ranking in the World Bank’s “Ease of Doing Business “survey has been falling. In a recent survey of small businesses, none of the respondents reported that the burden had lessened. Although regulatory impact assessments (RIAs) have been undertaken on some Bills since 2007, implementation of the decision has not been formalised such that any new legislation is subjected to an impact assessment before it is finalised. The recently gazetted Licencing of Business Bill will significantly add to the demands on municipal bureaucracies which are already stretched, increasing the regulatory burden and the costs of doing business, more especially for smaller businesses and businesses in the informal sector.
Clearly, further action is urgently needed to lower the costs of doing business.
Business believes that the universal implementation of a regulatory impact assessment process would make a major contribution to reducing the regulatory burden. In line with global best practice, this assessment should be an objective analysis of the potential unintended consequences of the imposition of legislation and in particular, the burden it would place on business, more particularly small business, and the consequent increases in the costs of doing business.
The burden can be broadly categorised as:
- Insufficient administrative or enforcement capacity which leads to unnecessarily high implementation costs for the regulator and regulated;
- Regulations implemented by many ministries requiring each entrepreneur to meet multiple demands
- Excessive cost of compliance, particularly when alternative means of achieving the desired objective exist; and
- Anticipated benefits not being realised.
PROPOSAL 12: ALL PROPOSED LEGISLATION BROUGHT TO CABINET SHOULD ROUTINELY BE ACCOMPANIED BY A REPORT ON THE LIKELY IMPACT IT WOULD HAVE ON BUSINESS IN GENERAL, AND ON SMALL BUSINESS AND NEW VENTURES IN PARTICULAR. THE REPORT SHOULD ALSO STATE HOW THE LEGISLATION HAS ADDRESSED THIS BURDEN AND WHAT ADDITIONAL MEASURES COULD BE UNDERTAKEN SO AS TO FURTHER REDUCE THIS BURDEN.CONSIDERATION SHOULD BE GIVEN TO EXEMPTING FIRMS BELOW A CERTAIN SIZE
In many instances, the problem lies not with the legislation, but rather with its implementation. Inefficiencies, delays and long turnaround times in many government departments are the major source of burden and costs for firms. Government departments need to publicise their turnaround or process times. This would allow citizens some degree of certainty as to when they can expect a service to be delivered. These times can be monitored and changes over time can be assessed and recorded.
PROPOSAL 13: GOVERNMENT DEPARTMENTS SHOULD PUBLICISE THE TARGETTED TURNAROUND TIMES CURRENTLY TAKEN TO SERVICE THEIR CUSTOMERS. THESE SHOULD BE MONITORED AND FORM THE BASIS OF AN EFFICIENCY OF SERVICE ASSESSMENT
5. Renewing South Africa’s labour market
The unionization of black workers and their involvement in collective bargaining were critical processes in South Africa’s transition to democracy. The persistence of very high levels of unemployment, and in recent years high levels of wildcat and often violent strikes strongly suggest the need for a fundamental review of both the institutions and behaviours of the South African labour market.
The creation of NEDLAC, as a statutory body whose purpose is to resolve conflict and build consensus in our society through the processes of social dialogue served to deepen the society’s commitment to democracy and finding agreement through negotiation. Since 1996 NEDLAC has done much good work. However, notwithstanding several major summits, it has failed to build consensus between the key social partners on the most urgent challenges facing both our society and economy, and in particular poverty, unemployment and inequality. It is time to reflect on these shortcomings and to consider ways to make this vital national institution more effective.
Institutional social dialogue should be retained, but this needs to be more effective than is currently the situation. NEDLAC should institute a process of review conducted by independent experts. The review panel should use the Webster Report, previously commissioned to do a similar review as a starting point. The key purpose of this new review should be to propose very specific changes to the way NEDLAC operates so as to enable NEDLAC to address the higher level, strategic challenges facing our society.
PROPOSAL FOURTEEN: A COMPREHENSIVE REVIEW OF NEDLAC CONDUCTED BY INDEPENDENT EXPERTS
The Labour Relations Act
A second review under the auspices of NEDLAC, of the Labour Relations Act, should take place. The review should be conducted by an expert panel appointed by NEDLAC.
The review should examine a number of issues:
- The challenges of multi-unionism with regard to employer recognition and collective bargaining.
- The extension of collective bargaining agreements to non-parties, and the extent to which the protections of non-parties contained in the Act have been effective in relation to employment and remuneration
- The effectiveness of the Commission for Conciliation, Mediation and Arbitration. In particular the relationship between the mandate of this body and the resources, both human and financial, available to discharge the mandate need to be examined. The role of this body in unfair dismissal disputes requires reflection. The essential purpose of the law was to ensure the fairness of dismissals. It is certainly undesirable for any employer to be subjected to an excessively lengthy, complicated and expensive process with regard to a contested dismissal. This can be a particular burden for the small and medium sized employer. Proposals to greatly simplify challenges to dismissal will make an important contribution not only to fair firing, but also to more extensive hiring.
- The processes leading up to strike or lock out action and the behaviour of workers and employers during strike or lockout action. As part of union recognition processes, unions and employers need to agree an effective set of rules that preclude violence and victimization. These rules need to be enforced.
PROPOSAL FIFTEEN: A COMPREHENSIVE REVIEW OF THE LABOUR RELATIONS ACT
Labour Relations Behaviours
The functioning of institutions depends on the behaviour of those that utilise them. The wildcat strikes late last year in the mining industry, and more recently amongst agricultural workers in the Western Cape indicate an absence of effective relationships between both employer and employee, as well as between union leaders and union members. This breakdown has occurred notwithstanding the considerable resources now devoted to human resources and industrial relations structures and processes inside companies. Equally the breakdown has occurred notwithstanding structures within unions involving shop and staff stewards who are often deployed to play these roles fulltime.
Restoring workplace relationships
On the management side the most vital relationship between an employee and his employer is to be found between that employee and his/her immediate supervisor. This is the boss he or she sees everyday. This is the boss who most shapes the employee’s behaviour. This is also the boss who will first notice, and is most able to address, things that go wrong.
In the Apartheid era this first line boss was generally defined by race (white). We have not done enough to replace race based authority with effective first line supervision in the workplace. We have not given these supervisors the skills set and the authority to direct the work processes of the people who report to them.
Probably the single most important intervention to both increase productivity and to enhance our ability to manage conflict is the effective training of tens of thousands first line supervisors.
The second most meaningful ‘boss’ in the employer/employee relationship is the “top” manager on site. Ordinary workers are very knowledgeable in working out where real authority lies.
In the process of unionisation, and the professionalisation of human resource management top management has often abdicated its leadership responsibilities to either human resource managers, or to union or joint union structures.
An impressive feature of The German workplace is the requirement, under that country’s Works Council Act, for a meeting to take place every three months, involving all employees, at which first management, then the Works Council and then any recognised Trade Union would review the progress of the business over the last three months. Production, costs, sales, efficiencies throughout the business would be critically reviewed and debated. These meetings provide an immediate and regular and direct opportunity for workers to raise problems. This enables problems in the workplace to be addressed before they result in retrenchments, strikes and lock-outs.
There has been a clear breakdown of communication as between management, at all levels, and their workforce. This breakdown needs to be addressed urgently by the business community.
PROPOSAL SIXTEEN: COMPANIES SHOULD HOLD QUARTERLY WORKPLACE MEETINGS WITH ALL EMPLOYEES, WHERE MANAGEMENT COMMUNICATES CRITICAL OPERATION PERFORMANCE INFORMATION ABOUT THE FIRM. RECOGNISED UNIONS SHOULD ALSO BE PRESENT AND HAVE THE OPPORTUNITY TO ADDRESS WORKERS.
Where union members have been released from their normal employment duties to be fulltime shop or shaft stewards a shared responsibility exists on both management and the union to ensure that these full time stewards have well defined responsibilities and account abilities.
PROPOSAL SEVENTEEN: ENSURING CLEAR ROLES AND CLEAR ACCOUNTABILITY FOR FULL TIME UNION OFFICIALS WITHIN THE COMPANY
Developmental collective bargaining
A final area in which new behaviours are needed is the collective bargaining processes.
Collective bargaining is the life blood of workplace democracy. In a country who’s greatest need is to expand employment, employment bargaining needs to have employment creating growth as its over arching goal. Collective bargaining needs to take the growth prospects of a business, including employment growth as a central objective. In the negative sense management should refuse to sign agreements which create costs pressures that make retrenchments inevitable. In the positive sense both unions and management need to bargain about those parameters of the business that will determine not only survival but indeed growth.
PROPOSAL EIGHTEEN: MANAGEMENT MUST ENSURE THAT THE COLLECTIVE BARGAINING PROCESS IS FULLY INFORMED BY THE REALITIES OF BUSINESS PERFORMANCES. IN ORDER TO ENSURE THAT RETRENCHMENT IS INDEED USED AS A TOOL OF LAST RESORT, EXTENDED WORKING HOURS, THE WORKING IN OF PUBLIC HOLIDAYS, REDUCTIONS TO OVERTIME AND PAY CUTS NEEDS TO BE EXPLORED IN THE ANNUAL COLLECTIVE BARGAINING PROCESS, PRIOR TO IMPLEMENTING ANY REDUCTION IN EMPLOYMENT.
Retrenchments are to be avoided, if at all possible and management should not accede to wage agreements that will then necessitate retrenchments.
PROPOSAL NINETEEN: MANAGEMENT MUST REFUSE TO AGREE TO LEVELS OF WAGE INCREASES WHERE THEY KNOW THAT SUCH INCREASES WILL REQUIRE RETRENCHMENTS DURING THE COURSE OF THE WAGE AGREEMENT.
PROPOSAL TWENTY: MANAGEMENT MUST BE READY TO RE-OPEN BARGAINING WHERE BUSINESS PERFORAMCES DETERIORATES TO THE LEVEL AT WHICH A REDUCTION IN EMPLOYMENT (OR A REDUCTION IN WAGES COSTS) IS REQUIRED TO MAINTAIN THE FINANCIAL VIABILITY OF THE BUSINESS.