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Shopsteward Volume 27: Special Bulletin

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Congress  |  Declarations

Declaration on the Current Jobs Crisis

Adopted by COSATU Special Congress, 20 August 1999

We, the delegates at COSATU`s Special National Congress, today declare that we are sick and tired of the senseless destruction of jobs in our country. We say, so far and no further!

We are facing a national crisis of job loss and rising unemployment which is deepening poverty and inequality, and threatening the gains of our new democracy. Despite the agreements of the Jobs Summit in October 1998, employers continue to throw workers onto the street in large numbers. Inappropriate macro-economic policies, in the form of Gear, are stifling the economy, and leading to job loss. Urgent measures are needed to address this growing crisis.

The high unemployment rates inherited from the apartheid era continues to grow. Jobs are being destroyed faster than they are being created, while 350 000 new work seekers come onto the labour market every year.


      Labour market and Retrenchments

    1. As a priority, the amendment of the LRA to make retrenchments a compulsory negotiations matter;

    2. Strengthening of legal requirements to ensure full disclosure by employers of plans which may affect employment;

    3. Amendments to the Insolvency Act to protect workers, and ensure adequate notice;

    4. Measures to penalise retrenchments, using tax, tender, and other instruments;

    5. Contributions to a Social Plan Fund should be made a legal obligation;

    6. Public Sector and Public Enterprises

    7. Urgent negotiation of a National Framework Agreement for the public sector, to govern restructuring, the expansion of the public sector in areas of understaffing, and any proposals for redeployment or cutbacks. The restructuring needs to be based on an agreed approach to the skills and services audit;

    8. All public corporations to publish employment plans, within agreed time frames, and amendment of the NFA for state owned enterprises to compel full disclosure and negotiations on restructuring plans;

    9. Industrial Strategy

    10. The urgent convening of Sector Summits, not later than the end of the year, prioritising those sectors experiencing job loss, to negotiate sector plans to stop job loss, and create new employment. We demand a moratorium on retrenchments in the run-up to these summits, subject to agreements being finalised at these Summits. National agreements negotiated at the Sector Summits need to be given legal force;

    11. Trade and tariff policy must actively promote employment, and limit job destruction. Tariffs must be brought back to the GATT agreed levels, as outlined in the attached Declaration. There urgently needs to be an agreement in the Alliance on our approach to the next WTO round, and pending trade agreements;

    12. All government instruments and agencies to immediately review their current policies, to ensure that procurement, industrial support etc are geared towards maximising employment and stemming job loss;

    13. Measures to promote labour intensive investment, beneficiation, and diversification of our industrial strategy, without weakening or sacrificing existing sectors;

    14. Implementation of a national campaign to Buy Local and Invest South Africa;

    15. Tightening up of customs and excise enforcement, and rules and labels of origin, to combat dumping and the import of illegal goods;

    16. Development of a regional Southern African strategy to reduce the levels of unemployment;

    17. Exchange rate policy should be managed in a way which minimises job losses, avoiding artificially propping up the Rand, and considering devaluation of the Rand, when major export sectors are in trouble;

    18. Macro-economic policy

    19. The introduction of measures by government to penalise speculation, and deter disinvestment;

    20. Measures to urgently and rapidly bring down the level of interest rates, and regulation of the financial sector to ensure access to affordable credit. A specific target for interest rates should be agreed on;

    21. Review of fiscal strategy and the MTEF, as well as restructuring of the GEPF, to release resources for massively expanded investment in service delivery, public works programmes, and infrastructure;

    22. Prescribed asset requirements need to be introduced to channel funds into job creating investment;

    23. Measures to reduce the effect of job loss

    24. Measures to address job loss and evictions on the farms, and implementation of a large scale land reform programme, to absorb unemployed people in the rural areas;

    25. Measures to promote the development of co-ops, self-employment and the social sector;

    26. Implementation of the Social Plan, and accelerated and proactive training and retraining of workers, before retrenchments take place, so that workers can be redirected to growth points in the economy;

    27. Measures to address the plight, especially of the long-term unemployed, women and youth;

    28. The urgent introduction of a comprehensive social security system.

    • Between 1996-1999 there was a net loss of over 365 000 jobs in the non-agricultural sectors. If we include agriculture, and the public sector, the figure is even higher.

    • Over 150 000 mineworkers lost their jobs between 1997 and 1999. Six mines have notified the Gold Crisis Committee of intended retrenchments, and 28 000 jobs are at stake in the next 2 months.
      See also Declaration on ERPM.

    • Over 110 000 jobs have been lost in manufacturing sectors between 1996-1999. This includes 22 000 jobs lost in the clothing textile and leather industry last year; and 2 000 jobs a month in the engineering sector.

    • Between 1995-1999 over 110 000 jobs have been lost in the construction industry, with BIFSA predicting a further 30 000 jobs will be lost this year;

    • Between 1996-1999 over 80 000 jobs have been lost in the service sector;

    • Between 1996-1999 over 30 000 jobs have been lost in the transport sector;

    • Despite Finance being one of the only sectors to generate jobs since 1994, nearly 10 000 jobs were lost in this sector between 1998-1999;

    • The parastatals continue to retrench workers, with Spoornet threatening to retrench 27 000 workers and Telkom 11 000;

    • The public sector employs about 170 000 fewer workers than it did four years ago.

    • The investment strike by South African corporations. Investment continues to be ploughed into speculation on the stock exchange, rather than new factories, plant, equipment and people. Increasingly South African corporations are disinvesting from the country, and making their major investments in other regions of the world ;

    • Employers continue to retrench us as a mechanism of first resort - to increase profits, and lower costs. In the mining industry last year, when tens of thousands of workers were retrenched, mining profits rose nearly two and a half times, and dividends paid to shareholders rose more than nine times!

    • Current gaps in the law make it too easy for employers to retrench us. They only have to go through the motions of consultation;

    • The policies pursued by the Reserve Bank are choking the economy. Real interest rates remain amongst the highest in the world, making borrowing for investment too expensive, and encouraging speculation;

    • Cutbacks in state spending, to meet arbitrary budget deficit targets, are also discouraging growth of the economy. Our economy has been growing slower than the level of population growth, leading to a drop in real GDP per capita. Lowering of living standards is also leading to a reduction of economic demand;

    • Privatisation, casualisation and outsourcing, undermine the quality of existing jobs, and destroy employment;

    • Insufficient investment is taking place by the state and public corporations in employment creating activities;

    • The lack of an effective employment-generating industrial strategy;

    • Inappropriate trade and tariff policies, specifically reduction of tariffs faster than agreed GATT levels, are worsening job loss;

    • Inappropriate management of exchange rate policies, which negatively affect specific industries.

  2. The extent of the crisis
  3. Workers are being retrenched in large numbers in all major economic sectors. The following facts show a shocking picture:

    Behind the statistics are families and communities whose lives are being ravaged by this massive job destruction. Every worker supports a number of dependants. Retrenched workers are often from the poorest communities and regions in the country, including rural areas.


  4. The causes of job loss
  5. The new government inherited a mismanaged and stagnant economy which had been destroying jobs for 25 years. However, policies introduced since 1994 have not reversed this trend. Some of the major causes of the job loss are:


  6. The Country urgently needs a new approach
  7. The proposals in the ANC Manifesto and the COSATU Central Committee Resolution, on Building the Economy and creating jobs should be used as a basis for urgently addressing the crisis we are facing. These include:

  8. The time for talking is over! We want action now!
  9. COSATU has put many of these proposals forward consistently over a long period, to employers, at Nedlac, in the Job Summit, and directly to Government. But the destruction continues.

    This COSATU Special Congress says:

The agreements which have been reached must be implemented.

Where existing policies are not working, they must be changed.

The time for action is now.

As an urgent priority:

  • An Alliance Summit must be convened to deal with the Jobs Crisis, and agree on a programme for urgent implementation by Government and the Alliance;

  • COSATU must engage other Federations, allied mass formations, and NGOs, in a joint campaign to address this crisis;

  • Parliament should be requested to urgently convene public hearings on the jobs crisis;

  • The names of companies who engage in mass retrenchments must be forwarded to COSATU for blacklisting;

  • A programme of national mass action, following our Section 77 notice to NEDLAC, will be embarked on as outlined in the Declaration of the Special National Congress on the Programme of Action.