Balancing Job Creation and Decent Work In The Aftermath of the Global Economic Crisis Urmilla Patel

1. Balancing Job Creation and Decent Work In The Aftermath of the Global Economic CrisisUrmilla Patel 2010 CCMA COMMISSIONERS INDABA “Against all Odds” Ritz Hotel 2 – 4 December 2010

2. Presentation Scope The ILO Decent Work Country Programme (DWCP) 2010-2014 Defining the concept of decent work The economy and labour market prior to and in the aftermath of the global economic crisis The impact of unemployment on decent work The contribution of the social partners Is it possible to create sufficient employment which incorporates decent work principles in other words, to balance unemployment with decent work? Conclusion

3. THE ILO DECENT WORK COUNTRY PROGRAMME (DWCP) (2010-2014) In order to support national initiatives to develop and entrench decent work programmes in their respective countries, the ILO together with the social partners and through social dialogue developed particular programmes for relevant member countries like South Africa that will lend guidance and support from the ILO to their respective efforts ; The process occurred against the background of the global economic crisis which threatened to worsen South Africa’s already serious unemployment crisis and the especially dire circumstances of the poverty - stricken, illiterate, unskilled, unsophisticated and vulnerable

4. Understanding the concept of Decent Work - “The concept of decent work is based on the understanding that work is not only a source of income but more importantly a source of personal dignity, family stability, peace in community, and economic growth that expands opportunities for productive jobs and employment. The goal is not just the creation of jobs, but the creation of jobs of acceptable quality” “the primary goal of the ILO Decent Work Agenda is to promote opportunities for women and men to obtain decent and productive working conditions of freedom, equity, security and human dignity”

5. The Four Strategic Pillars of Decent Work The key priorities or 4 pillars that underpin the South Africa Decent Work Country Programme emanating from a close partnership and social dialogue are the following: -Strengthening fundamental principles and rights at work (ensuring ratification and implementation of International Labour Standards ; and improved labour administration for effective employment services) - promoting employment creation (creation of an environment that promotes job rich growth, sustainable enterprises, including formalisation of the informal sector and skills development) ;

6. The Four Strategic Pillars of Decent Work (Contd...) - strengthening and broadening coverage of social protection (through better managed and more equitable access to social security and health benefits, occupational safety and health, and improved workplace responses to the HIV/AIDS epidemic) ; and -Social dialogue and Strengthening Tri-partism( through the improved capacity of the tripartite – plus social dialogue institution (and constituent members) , labour market institutions for effective social dialogue and sound industrial relations

7. Further Priorities Of The DWCP • To give effect to the protection of fundamental rights and freedoms guaranteed to all citizens under the Constitution of the Republic Of South Africa in Bill of Rights, which include : • -protection of the rights to equality; • - the rights to equal treatment and protection against unfair discrimination; • - rights to human dignity, freedom of expression and association; and • - rights to fair labour practices and rights of access to social security including social assistance

8. The South African Economy And Labour Market Prior To and In The Aftermath of the Global Economic Crisis Prior To The Economic Crisis.... South Africa had enjoyed a number of years of healthy economic growth Labour market indicators had showed progressive improvement in employment levels since 2003 despite challenges such as severe scarcity of skills and the AIDS epidemic ;

9. The South African Economy And Labour Market Prior To and In The Aftermath of the Global Economic Crisis Prior To The Economic Crisis (Contd.)...... In 2008 several factors began to impact negatively upon the economy, which included : - power shortages that never had been experienced before and which impacted adversely on productivity in major economic sectors; - rising interest rates in inflation targeting; - global increases in oil and food prices during the first 6 months of the year; - decreased private consumption; and - a decline in foreign investment and exports due to the spreading world financial and economic crisis

10. In The Aftermath.... The negative effect on the South African economy like other world economies were the following : - 1.8 % decline in GDP in the 4th quarter of 2008 ; - GDP declined further by 6.4% in the 1st quarter of 2009 ; The economy recorded a third consecutive negative growth of -3,1% in the 2nd quarter of 2009 - Thus the South African economy technically went into recession for the first time in 17 years ; - Unemployment worsened from 21,9% in the 4th quarter of 2008 to 24,5% in the 4th quarter of 2009 - Data indicated a cumulative loss of 1million jobs in both the formal and informal sectors and across all major economic sectors

11. In The Aftermath(Contd.)..... The negative effect on the South African economy like other world economies were the following : - However, despite the job losses, labour market data indicated that there had been an increase of 89,000 jobs across all economic sectors in the 3rd and 4th quarters of 2009 indicating the beginning of an economic recovery - Economic growth and job creation opportunities which were expected to escalate as a result of the 2010 World Cup did not manifest according to the great expectations harboured as result of the global economic crisis that had begun in 2008 ; - At the same time however, the view has been expressed that the 2010 World Cup had actually softened the full adverse impact of the economic recession for South Africa

12. THE ECONOMY IS IN A BAD WAY CAN WE TURN IT AROUND?

13. TOTAL EMPLOYMENT

14. BUSINESS CLOSURES

15. CONSULTATION

16. The Impact Of Unemployment On Creating Decent Work High levels of unemployment created serious decent work deficits such as - informal employment( defined as “employment in precarious work situations with no written contracts and no benefits”)increased constituting almost 36% of total employment; Emergence of atypical employment relations such as casual labour, part-time employment, temporary and seasonal work which have the effect of making workers more vulnerable and exploited despite the jobs created ; Labour Broking whilst having created a number employment opportunities ( an estimated 500,000 to 950,000 workers are placed daily through labour brokers), has the effect of depriving workers of their rights by bypassing labour legislation and regulation

17. The Response Of The Social Partners Social dialogue has been South Africa’s primary response to the global economic and financial crisis. A Joint Presidential Working Group consisting of social partner representatives from Government Business and Labour developed a National Response Framework (NRF) to the Global Economic Crisis which was adopted in February 2009 The NRF is integrated into Government’s medium to long-term development programme that is geared towards addressing poverty, unemployment and broadening economic participation

18. The Response Of The Social Partners (Contd.)...... Broad principles aimed at the following govern the NRF : - safeguarding the welfare of the vulnerable and poor; - growing the economy and creating decent jobs by increased state investment in in economic and public infrastructure ; - introducing effective industrial and sector strategies ; - commitment to skills development ; and - transforming and integrating the informal sector into the formal economy ; including - ensuring commitment to macro-economic policies that support decent work and sustainable growth

19. Furthermore.... Fiscal and Monetary policy and Industrial and Trade policy measures form important aspects of the national response aimed at contributing towards reducing poverty, and enhancing employment outcomes ; Consideration is also given to environmental issues relating to global warming and national efforts to promote green technology and industries and are thus included in the national response to promoting the creation of green jobs Conclusion : that the social partners in drawing up the NRF have displayed firm commitment to promoting employment creation that holistically supports all pillars of decent work.

20. Government’s Response Public Infrastructure Investment Programme:a primary part of the of the national response to the economic downturn with approximately R846 billion being allocated to job creation and mitigate the huge job losses caused by the economic crisis. Expanded Public Works Programme(EPWP) : along with the ILO provides technical and policy advisory support to create further jobs focusing especially on the youth, women, and other vulnerable groups Phase 1 of the EPWP (2004-2009) created an estimated 491311 work opportunities ; however, these were largely short-term and lowly paid and lacking in social benefits such as retirement Phase 2 of the EPWP is targeted at creating a total of 2 million sustainable jobs and enterprises for the poor and unemployed based on decent work principles.

21. Government’s Response (Contd... A special National Jobs Initiative and Training Lay –Off Scheme have been launched as part of the national effort to lessen job losses and increase employment resulting from the economic crisis; Government has pledged R10 billion over three years towards the job-saving initiative ; The Training Lay-Off Scheme aims at avoiding workers who would be retrenched by allowing them to agree to a suspension of employment whilst the workers go on a training programme ; Institutions like the CCMA, Productivity SA, The DOL – programmes and policies developed to facilitate job saving ; SA committed to the global Jobs Pact within the NRF and through ILO support and social partner support

22. Labour’s View.... Organised labour is very clear in its message that job creation must incorporate principles of decent work and this has largely been the reason for the recent call from labour for the banning of labour brokers. Eradication of poverty and improved services in the areas of health, education, rural development and land reform and crime, safety and corruption Labour promotes a new growth path based on: - GDP growth (pre-employment growth ) of 7% Human Resource Development Industrial Development Strategy Monetary Policy( interest rate cuts) Fiscal Policy Investment (public and private) infrastructure

24. The Response From Business Commitment from Business to create jobs and ensure holistic respect for decent work is displayed in the support and co-operation with the NRF and through various other measures and institutions such as Business Unity South Africa, The National Business Initiative (NBI), Business Against Crime amongst others The NBI sees as its vision for corporate South Africa a sustainable future with : -People :South Africa as a thriving society -Planet: Ecosystem integrity is respected -Prosperity :market economy to benefit all And as its mission : “To inspire and mobilise business leadership for a sustainable future” And a catalytic approach expressed in the words of Warren Buffet’s Noah principle as follows: “Predicting rain doesn’t count; building arks does”

25. MEMBERS OF THE NBI

26. MEMBERS OF THE NBI

27. The Future? There are mixed views as to what the future holds : There are strong signs that the economy is firmly on the road to recovery ; However , job losses continue and some of the jobs lost are not expected to be soon regained eg. in the mining sector where there has been long–term employment loss; Statistics SA in its quarterly survey has indicated that 16 000 jobs have been lost in the mining sector ; and that Overall employment has decreased by 86 000 between the 2nd and 3rd quarter with 45 000 jobs lost in the informal sector and 14 000 jobs lost in the formal sector ;

28. The Future? (Contd) Again however, according to the latest Adcorp employment index, following a steep decline in September, employment in South Africa grew by an annualised 2.83% in October with the number of permanent workers increasing by 1.32% and temporary workers by 6.47% ; The above figures showing higher job losses in the informal sector and increased employment of temporary workers reflect a continuing inclination to decent work deficits; The Adcorp survey also predicts bad news for employment in the next ten years indicating an increase in unemployment from the current 6.2million to 16.8million, including discouraged work seekers

29. Encouraging Words From Productivity South Africa “While South Africa and sub-Saharan Africa bounces back from the growth slowdown, risks remained, reported the IMF and thus in the difficult circumstances that we face, we can utilize our strengths, the financial regulatory framework, and the resourcefulness of our people and institutions, to develop a response to the crisis and to commit to work together in addressing its impact on South Africa”

30. Finally The Question Is....?? Can a balance be created between employment and decent work ? My view is that this presentation has shown that overall there are very positive indications that the unemployment crisis can be alleviated and balanced with decent work principles through : - ongoing social dialogue and firm commitment amongst the social partners towards creating decent employment ; - that the funds set aside for job creation and the programmes (mentioned above) established by government are effectively translated into action and actively monitored ;

31. Finally The Question Is....? (Contd...) - widespread and constant public conscientizing of the concept and principles of decent work and its fundamental importance in accordance with the Bill of Rights and ratification of ILO conventions by South Africa as a member state of the ILO, through print and electronic media, public campaigns, conferences and seminars; Government enacting legislation that entrenches the principles of decent work in all forms or sectors of employment and all workplaces and further improved efforts on the part of the social partners

32. Thank You!

33. References: ILO Decent Work Country Programme 2010-2014 Paper Business Day : - ; - ; - ; - . KZN 2010 Annual Labour Law Seminar (“Lending A Helping Hand In Troubled Times”) Papers – 31st Aug 2010: The Effect Of the 2010 World Cup On Employment Trends &Collective Bargaining: Afzul Soobedar, NSC-CCMA) An Example Of Corporate South Africa’s Contribution To Employment Creation : Kerryn Haselau, NBI CCMA Annual Labour Law Seminar Presentation : MudzungaMashamba, Productivity SA The Unemployment Challenge Should Be Dealt With : Dennis George, FEDUSA Labour Law And The Unemployment Crisis : Labour Lawyer, Shanta Reddy