Issued by: Ministry of Labour
13 MAY 1998
Today Cabinet approved the proposed Draft Social Plan Agreement which has been under discussion in NEDLAC since October 1995. The government is now in a position to confirm its support for the Framework Agreement on the Social Plan to the social partners and commence a process, across a range of government departments, of establishing the level of resources required for its implementation.
South Africa is undergoing a period of major structural change. This is causing major job loss in a number of industries, especially the gold mining industry, with serious effects on individuals, communities and regions. In 1995 the trade union representatives to NEDLAC proposed a Social Plan Act be introduced. A task team was established to consider their proposal - and some two years later emerged with a Draft Agreement which all parties were asked to take back to their principals.
The social partners accept that the burden of employment decline should not be borne by the affected individuals and regions alone. Rather a social plan approach should be adopted which helps to integrate retrenched people into the economy, and which helps to revitalise affected local economies.
The Nedlac partners support the promotion of policies designed to ameliorate the consequences of employment decline and to manage the process of downscalling.
Pressure to reach agreement was placed on all the parties when they were urged in the Gold Mining Summit to find agreement by March 1998. This deadline has passed, but a great deal of progress has been made.
The Draft Agreement identifies three distinct phases: phase one seeks to save jobs wherever possible, phase two seeks to manage retrenchments more humanely and phase three is about ameliorating the effects of job loss on individuals and local communities.
Phase One envisages that employers and unions will form future forums at company or industry level to try and anticipate problems and plan strategies to save jobs. Government was asked to establish a Social Plan Technical Support Facility to provide support to the social partners in this process. The Facility would undertake sectoral studies to help to identify problems and solutions, provide assistance to firms for the development of proactive job-saving plans and refer to other assistance programmes where these are available. Government has approved this in principle and will now investigate the level of resources that are appropriate to dedicate to this Facility.
Phase Two is about managing job loss. The Draft Framework Agreement has specified that when 500 people, or 10% of the workforce - which ever is the greater - are about to be retrenched, then the Minister of Labour must be notified. The company can also ask the Department of Labour to provide specified support services - which include the setting up of a Retrenchment Response Team which will assist with the counselling and planning of training of workers. Payment of UIF entitlements will be managed by this Team.
Once workers have been retrenched then Phase Three is applicable. At this stage the challenge is to identify alternative forms of employment, self-employment or social development that can be embarked upon. The planning of these alternatives is the area in which it is envisaged that government would be able to provide some support. This has been approved in principle and the resource level has now to be determined.
In terms of the Draft Agreement approved by Cabinet, government has undertaken to investigate the "feasibility of providing additional forms of financial assistance for the development and implementation of social plans, the delivery of the Department of Labour services and for regional economic development plans". This undertaking is conditional upon the support being "justified within the context of a broader employment strategy", taking due account of the "cost of job loss in respect of taxes to be lost and insurances to be paid", ensuring that there is no subsidisation of "activities which the parties should normally undertake anyway" and "resources are available". Government will have to report on this investigation within six months of the Agreement being concluded - probably by the end of September this year. The Department of Labour is responsible for ensuring that this process takes place.
Government will return to the NEDLAC negotiations with this mandate and seek to finalise the agreement on this basis.
For further information contact Samantha Henkeman on 082-8891517