Tackling low productivity: government should crack the whip

Annually, somewhere between May and June is the period unofficially known as “the strike season” when unionised workers in both the public and private sectors demand higher wages to cope with rising standard of living. In extreme cases, essential services grind to a halt as employers are blackmailed to reluctantly effect salary increments against their better judgment. In general, the economic impact of this is staggering, running into billions annually.
From employers Transform SA Online has interviewed for viewpoints, there is a general sentiment that legislation like the Employment Act are preventing them from implementing practices which would result in increasing productivity amongst their workforce for fear of falling foul of the law.
The employers argue that legislation is biased towards the employee much to their detriment. They cite recent decisions like the amendment of the Employment Act, which is resulting in massive job losses. The revised Employment Act has outlawed the operations of labour brokers, effectively closing a channel through which some people found employment opportunities.
Moreover, the propensity of employees to go on protracted strikes at the slightest of provocation scares off organisations considering investing in South Africa. A case in point was when BMW decided to relocate its assembling plant from the country.
The fragile relationship between the employee and employer has been attributed to the abovementioned factors. This is badly affecting organisations’ output.
With the economy ailing, and indications that things might have to get worse before they get better, isn’t it high time for government to introduce reforms to the Employment Act?
Clearly, the country’s system of remuneration, where employees are guaranteed of pay increment, regardless of their level of productivity, is not helping economic growth.
Perhaps government can take a leaf from the UK.
When the late British Prime Minister, Margaret Thatcher, faced problems similar to South Africa in the first term of her career, she cracked the whip and it worked. Then, unions, which were too powerful for their own good, went on a strike bender, holding employees to ransom. And, seeing that the situation was getting out of hand, Thatcher pushed reforms through the House of Commons which ensured that both the employer and employee were held accountable.
As a result, gone were days of employees believing that they were entitled to privileges they did not deserve. A system where anyone was remunerated in accordance with their level of productivity was introduced.
Should South Africa take a similar trajectory?
Sanjeev “Mahatma” Gupta is a freelance columnist based in Chatsworth, Kwazulu Natal. The opinions he expresses are not those of Transform SA Online