Context

South Africa has a high inequality and mass unemployment. Sustainable economic and social success is impossible without improving competitiveness. This requires stable labour relations and cooperation as well as a more inclusive labour market.

In the post-apartheid era, legislation has shifted significantly in favour of greater employee protection. Unfortunately, neither substantive economic transformation nor improved education and skills development have followed – issues that prevent inclusion and hamper South Africa’s economic potential. BUSA supports fair labour legislation that is evidence-based and suitable for implementation in businesses of all sizes and in all sectors. Labour legislation should be designed to minimise the practical difficulties of implementation for small, growing and dynamic businesses, so that it does not negatively affect their competitiveness.

South Africa has a reputation for adversarial labour relations. For example, in the 2017 – 2018 Global Competitiveness Index the country is ranked last on cooperation in labour-employer relations. It is important for business to build trust over time through consistent, mutually respectful engagement with government and labour organisations. Recent landmark agreements such as the Labour Relations Stability Accord and national minimum wage agreements illustrate an improved relationship and the potential for greater collaboration across government, business and labour.

Guiding principles

BUSA is committed to fair, evidence-based labour market policies that promote employment and are cognisant of practical considerations, especially their effects on small and medium enterprises. BUSA engages proactively with labour legislation, related regulations and labour market institutions, and informs members of relevant developments. Although there will be areas where not all parties agree, labour relations should be guided by a principle of consistent dialogue in favour of genuine cooperation, collaboration and solution seeking.

The regulatory framework for labour should be harmonised between the various regulatory instruments and government departments. Alignment with constitutional principles and international standards guarantees that South African labour legislation is human-rights centred. Beyond formal legislative requirements, it is important for business to embed legislative changes in workplace culture and to model a more inclusive culture.

BUSA also represents business interests in international and regional labour relations forums such as the Southern African Development Community Private Sector Forum, Business Africa, the International Labour Organization and the International Organisation of Employers.

Challenges

• Labour dialogue with social partners includes diverse and sometimes contradictory interests and perspectives. Building trust and consensus on any issue requires time, effort and mutual respect.
• In some cases, the argument that South Africa is a unique labour market may lead to resistance towards policy based on international evidence. Business strongly rejects the notion that South Africa cannot learn from the experiences of other countries, while acknowledging that policies must also be adapted to the local context.
• BUSA members lack time and resources to engage with all labour regulations and legislation, although the labour framework has a direct impact on their operations. Ensuring that the labour regulatory framework is aligned within government and consistent with international standards would help businesses understand their obligations and ease their compliance burden.
• Once regulations have been promulgated, implementing them in workplace practices is a secondary challenge.

Analysis

Labour relations illustrate the value of BUSA’s focus on building and maintaining relationships with diverse social partners over time. Understanding the varied experiences and perspectives of social partners in labour market discussions helps to defuse an adversarial labour relations environment in favour of a cohesive vision for a productive and stable labour market. Stabilising the labour market in this way is important to attract investment and increase productivity.

In the long term, the labour market should be defined by greater economic inclusion and job creation in the context of a future world of work. This depends on strategic drivers such as economic transformation, a clear and practical regulatory framework, the success of small and medium enterprises, and improved education and skills development.

The national minimum wage negotiation in the National Economic Development and Labour Council (Nedlac) is an example of evidence-based policy developed through slow consensus building, that would not have been possible without persistent engagement to build trust and find solutions that all social partners can support. This policy illustrates genuine collaboration on a contested idea, acknowledging the difficulties facing everyone, from low-paid employees to small businesses. While the national minimum wage agreement focuses on those in the labour market and on addressing wage inequality, it also acknowledges the importance of creating jobs, which would increase inclusion and mitigate the burden of financial support for the lowest paid employees. The national minimum wage process creates possibilities for greater collaboration on similar terms in the future.

The way forward

BUSA will focus on:

• Pursuing consistent dialogue with government, labour, and other important social actors through Nedlac and other forums.
• Soliciting members on regulatory inputs and disseminating information on regulatory labour changes for their understanding and compliance.
• Continuing to represent business interests in international and regional labour relations negotiations.
• Benefiting from other strategic drivers, especially improved education and skills development, to promote employment.

Conclusion

Business is committed to a mutually respectful, reciprocal and stable labour relations environment, to create a stable and productive labour market. Consistent engagement and consensus building is essential and has yielded positive results in the national minimum wage and labour relations stability negotiations in Nedlac. In the longer term, a stable and productive labour market will depend on increasing inclusion and improving education and skills development.

Sources

BUSA. Strategic Plan 2017-2019. March 2017.

Nedlac. “Declaration: Labour Relations Stability and National Minimum Wage Agreements.” February 2017.

Nedlac. Report. November 2017.