Cosatu call SMME exemptions unconstitutional


The president's desire to exempt small, medium and
micro-enterprises from central bargaining is "unconstitutional",
according to the Congress of South African Trade Unions (COSATU).

"Of great the President's announcement that
government would complete the system of exemptions for small
businesses with regard to taxes, levies, as well as central
bargaining and other labour arrangements," said spokesman, Paul
Notyhawa reacting to the state of the nation address.

He said the exemption of small business from the central
bargaining process -- which President Thabo Mbeki wished completed
by year end --would shift the burden of protecting vulnerable
workers away from bargaining councils to already overburdened
labour market institutions.

"In the absence of clarity on what is the scope of the
exemptions, blanket exemption of the small business from labour
laws will be unconstitutional."

Notyhawa feared that exemptions of this nature would undermine
the collective bargaining system by removing greater numbers of
workers from its coverage.

This he said, would fuel a race to the bottom and lead to the
deterioration of rights and conditions of all workers.

"Even companies that are covered by collective agreements, and
not exempted, will be forced to lower workers' standards to compete
with unfair competition from the exempted businesses," he said.

Cosatu also feared that the move would lead to the unbundling of
businesses and out-sourcing to take advantage of the exemptions.

The trade union federation said it was further concerned that
the president had not expounded on the introduction of the Growth
and Development Summit, which sought to halve unemployment by 2014.
This required the creation of 400,000 new jobs a year.

"Further, the impact of cheap imports and the overvalued rand,
on employment should be examined. Any free trade negotiations,
especially with China, should take into account the likely impact
on jobs," Notyhawa said.

Cosatu however, praised the president for the general content
and honesty of his speech, saying it had been encouraged by his
"frankness" in assessing the progress made.

"The President was also bold enough to accept failures and to
outline how these will be tackled," said Notyhawa. He however,
congratulated the government on achieving many of its targets.