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Cosatu’s manipulative march move

Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets.

The invitation by Cosatu to the DA to join its march today, which was at first declined, then accepted and then withdrawn, is poor politics on the part of the trade union federation. It looks quite Machiavellian, from a distance.

Today, Cosatu is marching in opposition to a number of issues, including Gauteng’s electronic highway tolling system. On this subject, it has a lot of natural allies. It seemed to want to build on this potential, and issued an uncharacteristic invitation to the official opposition, the Democratic Alliance, to join the march.

At first, the party declined. The Mail & Guardian quoted the DA’s spokesman, Mmusi Maimane, to the effect that it had no objection to members joining the Cape Town march in their individual capacity, but as a party, the plan was to challenge e-tolling in court.

During the course of Monday, however, there was some chatter on a social network where DA party leader Helen Zille is known to hang out, that the DA was missing an opportunity here, and later in the day, the DA formally accepted the invitation.

Zille reportedly made it clear that her party agreed with Cosatu on e-tolling, as well as with their concerns about corruption, free speech, poverty and unemployment.

The one topic that the DA did not agree on, however, was Cosatu’s opposition to “labour broking”, but felt it could make this clear independently. It also took issue with the union federation’s plan to involve the SA Democratic Teachers’ Union, since this would risk disrupting education unnecessarily.

By the bright light of morning on Tuesday, however, the DA’s acceptance of the invitation was moot, because Cosatu had withdrawn it.

“It is apparent now that Cosatu’s invitation to us to join the march was disingenuous from the start,” wrote Zille in a media statement. “It was clearly designed to place us in a dilemma by joining two disparate issues: e-tolling and labour broking. We called their bluff. And they didn’t like it.”

This is one way of summarising what took place: that Cosatu was hoping to paint the DA as an elitist party that would sacrifice its principles on e-tolling and job creation if the alternative was to march with a member of the despised ruling alliance.

The other way to look at it is that Cosatu had hoped, by bundling the controversial labour broking issue in with others matters on which most everyone is united, that opposition parties would be seen to give it their implicit imprimatur.

Either way, the politics is either one of raw naïvety in how to build political alliances, which is not something of which I’d lightly accuse Cosatu, or of calculated manipulation.

Of course, Cosatu is wrong, and the DA mostly right, on the labour broking issue. The latter does waffle a bit about appropriate regulation, as if existing labour law isn’t onerous enough to deal with the potential for abuse, but in principle, the DA is correct to oppose banning the practice.

Labour broking takes place when workers are not employed full-time by the companies at which they ultimately work, but are rented out on contract by third parties.

There is only one scenario in which this would be objectionable. If it involves a full-time worker who cedes rights and income to the broker for no real service, that worker is clearly exploited. However, this can only happen without remedy if the broker exercises monopsony control over the demand for labour. If that is the case, its control over the market has to be addressed under competition law.

In all other cases, a labour broking arrangement benefits all parties in the deal. If it didn’t, one of the parties – be it a short-changed broker, an exploited worker, or an under-served client – would not agree to enter voluntarily into the contract and would either contract with someone else, or cut out the middle man entirely.

In general, broking makes labour much more flexible and efficient. It permits one worker to work for several of the broker’s clients, while retaining a single employment contract with all its benefits and obligations. It permits workers to be moved from project to project, as necessary. It makes it possible to outsource functions that aren’t core to a business, like running computer systems or maintaining the office buildings, to specialist service providers.

The DA is quite right in saying that banning labour broking would instantly result in significant job losses, as the cost of employment would prevent clients from absorbing all these workers on direct payroll. Cosatu wouldn’t care, because these workers aren’t among its members. Longer term, it would greatly raise the cost of employment, which ultimately raises prices of consumer goods and services, while depressing the broad demand for labour. Again, Cosatu’s members aren’t really affected.

If you’re not in business, think about a garden or domestic service: you need the service once a week, perhaps, but if the choice is between hiring someone full-time and not having the service at all, you’d probably mow your own lawn. For a worker to manage all their own clients might be possible in simple cases, but it gets more complicated when it comes to industrial repair services, seasonal farm work, outsourcing or civil engineering contracts. Such projects are by nature periodic or temporary, and labour brokers offer workers a secure pipeline of contract work by managing client side for them. For many workers, in the absence of full-time employment, it beats the feast-and-famine volatility of trying to go it alone.

While labour-broking does not benefit most Cosatu members, full-time work does. Freelance workers threaten the jobs of unionised full-timers, and undermine their ability to extort higher wages by strike action. So Cosatu certainly has a good reason to demand such a ban. However, it is not acting in the interests of the country at large when it pleads this case. This is a special interest, and there’s no reason to expect other political organisations to join its cause.

If Cosatu had been honest about wanting to express popular outrage over e-tolling, it should have raised just that issue. Alternatively, it should have raised labour broking as its (rather poor) answer to the question of poverty and unemployment.

Instead, it put a few popular arguments on one side of its album (does anyone still get vinyl metaphors?), and then snuck a bunch of nasty partisan issues onto the flip-side.

If it truly wanted to build alliances over issues with which others agree, this is naïve. Since Cosatu leaders are not naïve, this is maddeningly manipulative. There are many people, including me, who’d like to make common cause with Cosatu over corruption, unemployment, or, indeed, toll roads. But they’re not happy getting suckered into marching against the right to sell one’s labour to whoever wants to buy it.

If that is how it plays politics, it’s just as well the one-night-stand between Cosatu and the DA didn’t flower into a long-term relationship. Some love matches are bound to lead to acrimony sooner, rather than later. DM


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