Confrontational or Collaborative? 

Editorial

Labour Market

Some 570,000 workers are employed on the Mauritian labour market. About 40,000 are unemployed, two-thirds of whom are women. This gives a total labour force of around 610,000. Less than 10% of workers are employed in the primary sector (agriculture, mining, etc); about one third of them are engaged in manufacturing, construction and similar secondary activities while nearly 60% are in the services or tertiary sector, including some 35,000 in public administration. With unemployment currently estimated at 7.5% of the labour force, there is not much pressure for workers to unionize. Trade union activism has declined generally. Some amount of diversification of economic activities, and hence a more variegated job structure than what obtained in the past, has also taken some of the winds off the sails of the trade union movement. It is difficult, in such circumstances, for them to identify and fight for a common unifying purpose. In the last two years, trade unions staged some protest movements but they were not impressive. This was due to the fact that union leaders have not successfully elicited a concerted and unified front among themselves and have failed to evoke major causes to champion in favour of workers.

It is against this background of a perceived weakening of the trade union movement that the government came up in 2007-08 with two legislations, notably the Employment Relations Act and the Employment Rights Act. These new pieces of legislation replaced the old Industrial Relations Act, considered as oppressive towards the expression of workers’ rights. The new legislations amended the provisions of the Labour Act significantly, watering down its clauses affirming certain acquired workers’ rights and privileges. Some of the pro-active unions had a very negative reaction to these new legislations, claiming that their overall effect was to make the action of going on strike in protest against employee oppression almost insuperable. The legislations have in fact laid down a number of hurdles which make it very difficult for unions and their members to resort reasonably directly to the strike action in protest against unfair treatment meted out to workers by employers and thus get on to solutions fairly quickly. Those unions have been claiming that these legislations have set the clock back by several decades by giving employers a real carte blanche to generalise the firing of workers across the board without being exposed to any serious punitive compensation.

The unions have also been claiming that, according to the new legislations, even when a labour dispute managed to go before the Tribunal after overcoming the various hurdles that have been laid down, the Tribunal is bound by the legislation to refer to certain neo-liberal economic policy considerations in arriving at its decision. The neo-liberal considerations that the Tribunal has to weigh against workers’ claims include the need to ascertain that its decision does not adversely affect Mauritius’ balance of trade or its balance of payments situation, does not affect the economic rate of growth and the potential for employment creation, does not make employers pay beyond their “capacity” to pay and that it takes into account any proposed increase in remuneration it is intended to give by relating it to the rate of increase in labour productivity. This kind of widening of the Tribunal’s terms of reference is interpreted as being tantamount to the use of vague criteria to deny an otherwise legitimate claim. The unions also believe that where it was the practice in the past for employers to contribute directly to the rehabilitation of workers being laid off through established compensation schemes, the burden now falls upon the workers themselves to contribute towards the eventuality of their being laid off.

The unions have been protesting in particular against the new mechanism to compensate workers for their loss of purchasing power due to inflation. This compensation was being effected before the new legislations through annual tripartite negotiations involving workers, employers and the government. The compensation paid under this system was largely related to the rise in the cost of living as reflected in the annual rate of inflation. Under the new system, a National Pay Council (NPC) has been instituted which makes little allowance for that kind of simple straightforward annual tripartite negotiation; it takes into consideration other factors which, according to the unions, under-compensate workers for their loss of purchasing power and leaves little recourse to further negotiation once a recommendation has been set out by the NPC.

Economists have generally been arguing that flexible labour market rules are more likely to save and preserve jobs than rigid rules which cannot be departed from under any circumstances. In that sense, we could not have carried on with rules and practices which blunt the potential of the labour market to adjust in such a manner as to preserve a maximum number of jobs and to open up avenues for creating more business opportunities. It is quite clear that in globalised market conditions, the investments that could have created jobs in Mauritius would move to other locations were Mauritius prone to wild strikes such as the destabilising ones we saw in the 1970s and early 1980s. No country can survive the international global competition for FDI if it does not manage to keep within well established parameters any recourse to industrial action by workers. To that extent, it was necessary to make workers and employers respectful of binding codes of mutual conduct to keep Mauritius attractive as a venue for additional investment and, therefore, jobs. This is all the more important as the past three decades have seen growth of jobs more particularly in the secondary and tertiary sectors, most of which are oriented towards serving external markets.

However, we must have gone quite far in this direction of adopting flexible labour market rules compared with other countries. That would explain why we are securing so many recommendations in areas of business facilitation and competitiveness. The less workers have the potential to put at risk a business enterprise by industrial action, the more favourably do those comparative indices about doing business in specific locations and competitiveness work in favour of a country. In that sense, the new legislations have placed the country in comparative advantage. Although we do not have the technical capacity to attract certain global brands to our shores, we will still be favourably considered for other not-so-technical investment opportunities given the more favourable treatment of capital as opposed to labour. This is therefore a plus in our favour. It is true that, in the process, workers are made to sacrifice several degrees of freedom they had in the past. For example, they no longer enjoy the same security of employment as they did before. In an environment where workers can move from one sector to another less demanding one, it would have made perfect sense to give the labour market this kind of mobility and at the same time, attract more enterprises to come and set up here.

It is unfortunate however that unskilled or the less skilled workers account for half at least of our total workforce currently. This means that the mobility of the latter towards a wider variety of activities is very restricted. In other words, the opportunity for them to move on to secure other at least as good, if not better, jobs as the ones they were previously engaged in is quite limited. We have therefore adopted rules of compensating, hiring and firing workers suited to advanced labour markets where a plethora of skills is available on the market but, in contrast, we have not been able to equip our own workers with what it takes for them to maintain a relatively decent standard of living. Our workers therefore run the risk of being blown off their feet without the necessary social safety nets if business conditions were to worsen suddenly.

The graduation from one level to the other, which normally accompanies such a shift to extreme capitalist market rules leaving little margin for real negotiation to workers, was not undertaken. We did not build up a wider economic base before resorting to those new rules in the labour market. We paid little heed to the painstaking work done by previous generations for workers to be protected against the customary predatory attitudes of ruthless employers when they find workers to be at their mercy. We did not work on a prior program to intensify the level and variety of available local skills beforehand to make workers mobile against adverse employer attitudes. We did not ask the question as to how the workers would fend for themselves if they had to drop off due to the application of the neo-liberal market conditions that the Tribunal has been asked to apply as criteria when determining the outcome of an industrial dispute. It was all too easy to shift the burden of adjustment onto the workers when adverse economic circumstances were to hit the economy. It is not too late nevertheless to introduce the element of fairness instead of letting the balance tilt to one extreme only. The mere perception of fair treatment by the mass of workers can become like a great incentive to them to work collaboratively to save the enterprises as well as their jobs. We need to move out of the confrontational and stifling space set out for workers currently and inspire them to shift towards a more fair common cause to defend. A collaborative attitude would be much more productive than continuing with the confrontational attitude.

* Published in print edition on 24 September 2010