SA's labour legislation is not working
WE NEED to consider how
resources are allocated to promote
all forms of work, I have argued, and
not just employment in a standard
job. That would necessitate a review
of SA’s entire post-1994 labour dispensation,
including NEDLAC, the
Labour Relations Act (LRA), its primary
institutional innovation, the
CCMA, and much more.
Three of SA’s most prominent
labour lawyers advocated something
like a review in an article they wrote
at the end of last year (“Pragmatic
reform of labour legislation needed
urgently”, Business Day, November
15, 2011), premised on “a new social
compact”. Given that one of them
was the principal architect of the
LRA, it is surprising how little comment
“For as long as employers and
unions see the workplace as simply
a site of struggle, South African
business will never be able to prosper…
Whether one is dealing with
the public or private sector, more
efficient ways of organising work
and delivering goods and services
have to be a priority. If the debate
between labour and capital is confined
to the distributive elements of
collective bargaining no real
progress can be made.”
However, like much commentary
on labour matters nowadays, the
analysis on which the article is
based is tinged by unreality.
Perhaps there is a need to create
a new social compact, but the question
the three lawyers do not
squarely address is who the partners
to this compact will be. Moreover,
the way they propose to create
less adversarial relations is to resuscitate
the workplace forum.
The LRA did indeed provide for
workplace forums with a view to
instituting “joint decision-making”,
and bringing about less adversarial
relations. However, these provisions
have by and large been a dead letter
since they were adopted.
This is surely not because workers
choose to have adversarial relations.
It is because of the historical
baggage associated with what the
apartheid government called liaison
committees. It is surely obvious
by now that this duck is dead.
As with crime, adversarial
labour relations have causes. If one
was looking for the word that best
explains the levels of anger that
have manifested in strikes in the
public sector, which the three
lawyers describe as “pathological”,
it is surely inequality.
Placards expressing outrage at
what DGs earn express as much.
Inequality in the private sector is
better camouflaged, precisely
because business had begun implementing
“more efficient ways of
organising work” even before the
LRA was adopted. Needless to say
this was done unilaterally.
Fifteen years after the introduction
of the Employment Equity Act
(EEA) the workplace in the formal
economy is probably a more
unequal place than when it was
Certainly it is a more unequal
place than in the 1980s, when trade
unions were in ascendancy, and the
foundations of the present labour
dispensation were being laid. However,
the inequality that prevails is
no longer between managers and
employees, or skilled and lesser
skilled workers employed by the
In legal form, it is between different
workforces engaged in the same
operation: the workforce of a core
business, who is the client, on the
one hand, and the workforces of the
contractors or service providers the
client engages, on the other.
Mindful of the need to locate this
analysis in the context of the labour
market as a whole, I suggested in my
case study of a local authority (Cape
Times, July 23, 2012) that the workforce
of the core business be
regarded as representing the top
tier and the workforces employed by
contractors be regarded as representing
a second tier. At least two
other tiers were discernible, and a
similar scenario prevails in other
sectors. Take the example of retail,
the sector in which more people are
employed than any other.
The top tier comprises a core of
workers in standard jobs that the big
They also employ large numbers
of part-time workers who, because
they are directly employed, can be
regarded as belonging to the same
tier, although this is debatable.
The equivalent of the second tier
in retail would include the same
kind of services as are provided in
other sectors, as well as specialised
services, specific to retail, such as
the merchandisers that pack the
retailers’ shelves with products but
who are not employed by them.
When commentators talk about
the rigidity of the SA labour market,
they have in mind workers in standard
employment, in the top tier.
There is very little rigidity in the
second tier, and practically none
where it concerns contractors providing
services. Although to outward
appearances the workers they
employ are in standard jobs, in fact
they are in a highly insecure form of
employment which may be terminated
by a third party, be it a local
authority or retailer or other client
firm, against whom they have no
The kind of hard questions a
review such as I envisage would
have to confront, therefore, is
whether the unfair dismissal provisions
of the LRA have actually
achieved greater employment security
for workers, or merely raised
the costs of terminating workers in
the top tier, in standard jobs.
The grossest examples of this
cost are the indeterminate suspensions
that occur in the public sector.
At the same time it is not a
review that should be focused only
on the relationship between the top
Why, for example, given our levels
of unemployment, do we have an
unemployment fund with a surplus
of billions (it increased to R9.6 billion
in the 2010/11 year, according to
a department of labour report, “due
to decreased benefits payments”).
Yet the unemployed have no right
to unemployment benefits unless
they have been employed, and contributed
to the fund.
Or why does a worker who has
contributed to the fund, and resigns
his job to start his own enterprise,
also have no claim on the fund?
The problems with our skills
development policies and laws are
of particular relevance in the context
of the proposed youth wage
The institution of learnerships
was designed to meet much the same
social need as the youth wage subsidy
is now proposed to do.
Yet it is not clear that we have
digested the lessons to be learned
from doling out money to enterprises
that operate on a for-profit
basis, ostensibly for a social purpose.
By the same token, although
all workers in an employment
relationship are supposed to pay
skills development levies, it is
arguably only workers in standard
jobs who benefit.
Take the case of workers
employed by a contractor to provide
municipal services to a local authority.
Compliance with labour legislation
is likely to be a condition of the
tender. Payment of the levy is a
token of compliance. But what conceivable
benefit do unskilled workers
derive from the monies they
contribute? What about compliance
with the more substantive provisions
of the law?
The amendments to the LRA and
Basic Conditions of Employment
Act that are currently the subject of
public hearings in the National
Assembly have put pay to the fiction
that workers in the second tier are
protected by labour legislation to the
same extent as workers in the first
tier. They acknowledge the reality
that these workers are in effect
denied the right to organise, in circumstances
where they are
employed at the workplace of a
client. The right of workers to form
their own organisations, and the
right of such organisations to bargain
on their behalf, are the sine qua
non of decent work.
The amendments also represent
a welcome departure from the
assumption that has prevailed up
until now, that what is good for the
worker in a standard job is good for
all workers. For the first time there
will be legislative recognition that
one size does not fit all, and that specific
forms of non-standard work,
such as temporary and part-time
work, are in need of specific protection.
The benefit for employers is
recognition that these forms of
employment, subject to appropriate
safeguards, are legitimate.
Yet the limitations of these
amendments must also be noted.
Workers can more easily organise
themselves into trade unions,
perhaps. Yet it remains to be seen
whether trade unions will prove
effective in this context. For what
purpose does it serve to bargain
with an employer when it is in fact
the core business, or client, that
determines what they earn?
This is a problem the amendments
fail to address.
Consequently, these workers
remain in the unconscionable situation
of being taxed without the benefit
of any form of representation.
Workers employed in the small
economic units of the third tier, or
self-employed workers in both the
third and fourth tiers, may or may
not be taxed, whether in the form of
levies or otherwise. They nevertheless
contribute to the economic
good, and are also without representation.
Creating forums where all
workers can be represented is one of
the critical issues for the review I
am advocating. Or perhaps it is the
kind of innovation best piloted in
Perhaps there is merit in the proposal
of a workplace forum, after all.
But it will bear no resemblance to
the workplace forum envisaged by
the LRA. It needs to be a forum that
is inclusive of all the tiers of an
organisation. Or it may be more
appropriate to constitute such a
forum at the level of the sector. I am
not able to deal with the issues that
would be discussed in such a forum
within the scope of this article.
Suffice it to say that any attempt
to forge a social compact that is not
inclusive will only aggravate existing
inequalities, and the potential
. This is the fourth in a six-part
series. Former trade unionist Theron
is a labour lawyer, and is co-ordinator
of the labour and enterprise policy
research group (LEP) in the law
faculty at UCT.