'Labour-market rules must ease': Gordhan

The Centre for Development and Enterprise has joined calls for labour-market reform.

The centre said yesterday that drastic reform was needed to create jobs for the more than 6million jobless and to achieve the government's target of creating 5million jobs in the next decade.

Finance Minister Pravin Gordhan said at the Southern African Internal Audit Conference on Monday that, without the necessary changes, "we will not be able to make the breakthrough we need to create jobs in South Africa".

The centre endorsed the government's proposal for a youth wage subsidy, beginning next year.

Centre executive director Ann Bernstein said: "It's critical that we start reforming labour market regulations. We are always told that serious reform of the labour market would provoke significant political resistance. But the government will have to deal with these issues if South Africa is ever to address the crisis of unemployment."

The economy shed about 130000 jobs in the first half of this year, pushing the jobless rate up to 25.7% - one of the highest rates in the world.

But Cosatu rejected the call, saying the labour laws were flexible enough.

The spokesman of the union federation, Patrick Craven, said that it would argue that labour laws were "too flexible".

"What particular aspects of the law do they want to change? The calls to relax labour laws will not create jobs."

Bernstein said the government's proposed wage subsidy, which Gordhan announced this year, should provide for a "probationary period during which a 'no questions asked' dismissal policy applied".

"This is the first time a proposal by the government takes seriously the negative impact of high employment costs on people's chances of finding a job," she said.