BRIEFING BY THE MINISTER OF LABOUR, MR. MEMBATHISI MDLADLANA

8 FEBRUARY 2000

The continued transformation of our labour market and the removal of the structural deficiencies and rigidities of the past remain critical to the challenge of improving the productive capacity of our economy.

The role of government's labour market policy - and the legislative instruments which give effect to this policy - is to ensure that the labour market functions efficiently and effectively. It is to contribute to a labour market environment which is conducive to the attainment of economic growth and social development; to increased investment, economic efficiency and productivity, to employment and better living standards for all our country's people.

It is these objectives which underpin my 15-point programme of action, which I announced in June last year and which will form the basis of the approach and activities of my Department in the year 2000. Allow me to elaborate on key aspects of my programme, including those which the president referred to in his State of the Nation address on Friday - the skills development strategy, and the review of labour legislation and the introduction of legislative amendments, within the context of government's approach to the labour market.

This approach, which I have outlined in my programme, entails a commitment to ensure that we simultaneously address the imperatives of improved labour market efficiency and fair labour standards. Indeed, it is our firm view that these are two sides of the same coin and that labour market efficiency in South African conditions cannot be successfully achieved without fair labour standards. Our approach further avoids the two extremes of complete deregulation of the labour market on the one hand and over regulation on the other. Neither of these extremes would be conducive to creating the conditions for growth and stability or effectively address social and economic needs.

The maintenance of the correct balance will be achieved through a continuous review of our policy and legislation in relation to its impact on efficiency and worker welfare, the introduction of measures to accommodate the needs of specific sectors and circumstances and through ensuring that labour market policy is aligned with economic and developmental objectives. It is this approach which has and will continue to inform the review of labour legislation which I will outline. I am pleased to report that my Department has devoted considerable resources to the development of a competent research capacity which will enable us to scientifically monitor the impact of our policies and inform our policy approaches. Last year the Department released its first annual report on industrial action and we will be releasing the results of a number of labour market research projects in due course.

Skills Development

Within this context, our priorities for this year are to intensify the implementation and enforcement of key pillars of our legislative framework. Top of the agenda are the Skills Development and the Skills Development Levies Acts, which have only recently been promulgated. Raising the country's skills levels is central to meeting our economic challenges. A better trained and skilled labour force will help to attract investment, make the country more competitive and give individuals the skills to make a greater contribution to their communities. However, the success of this skills revolution, a vital component in unleashing our growth potential, is not a task for government alone. It must be achieved in partnership. I will be establishing Sector Education and Training Authorities, which are a concrete expression of this partnership. Composed of employer, worker and in some sectors, government representatives, these new bodies will spearhead the skills development strategy in each and every economic sector. From 1 April, employers will be demonstrating their commitment to this national task by contributing 0,5% of their wage bill in the form of a levy to fund training to meet the skills needs of a growing economy.

Other priority areas will include the following:

to improve access among the unemployed, particularly youth, women and the disabled, to income generating opportunities;
to promote equality in the workplace and increase the participation of black people, women and the disabled in the economic life of our country through the implementation of the Employment Equity Act;
to ensure the protection of the most vulnerable sectors of our workforce, including through sectoral determinations for farm and domestic workers;
to promote cooperative labour relations and labour stability;
to consolidate the restructuring of the Department's provincial offices to improve the delivery of integrated services which has positioned the Department to more effectively enforce legislation, ensure compliance and enable workers and employers to m effectively exercise their rights and obligations.

Small business promotion

We regard the growth and development of the small business sector as an important engine of economic growth and job creation. In November last year, I announced a Ministerial Determination on Small Business which varies conditions of employment in this sector. This determination, instituted in terms of the Basic Conditions of Employment Act, strikes the appropriate balance between the protection of workers' rights and creating the conditions in which small businesses can emerge and flourish. A number of recently promulgated labour laws such as the Employment Equity Act and the Skills Development and Skills Development Levies Acts have been crafted to take into account small business needs. In this year we will focus on a number of existing mechanisms to both facilitate small business compliance with labour legislation and to ensure the more effective utilization of public services and resources to facilitate entry and improved efficiency in the sector.

New policy initiatives

The restructuring of the Unemployment Insurance Fund and the introduction of new legislation in this regard will be a central focus of our legislative programme in the year 2000. The current UIF Act is outdated and I will shortly be introducing draft legislation which will address both the sustainability of the Fund as well as the extension of unemployment insurance coverage to previously excluded sectors.

Together with the Department of Minerals and Energy and the Department of Health, my department will also be undertaking an initiative to facilitate the coordination of Occupational Health and Safety competencies across government with the objective of ensuring a more efficient utilization of resources and to ensure healthy and safe workplaces across the economy.

Legislative amendments

Finally, I wish to update you on progress in the legislative review which I announced as part of my programme last year and which the President again referred to on Friday. As we know, the President in 1999 commissioned a review to assess the extent to which the labour market legislative framework contributed to the achievement of government's economic and labour market objectives and to address any factors which could be seen to impact adversely on the imperatives of investment attraction and employment creation strategies.

This has involved a process which has included an investigation by the Department of Labour as well as consultations with key stakeholders in the labour market. I have held meetings with Business South Africa (BSA), the National African Federated Chamber of Commerce (Nafcoc), the Black Business Council, Cosatu, Nactu, Fedusa and a delegation of organizations representing community and development interests in Nedlac. Detailed submissions were received outlining the constituencies' concerns and proposals.

The results of this process demonstrated in no uncertain terms that the fundamentals of our labour market policy are sound and that the overall thrust of the legislative framework remains correct. However, the review identified aspects of the law which have led to unintended negative consequences and which will therefore require adjustment and refinement, either through legislative amendments or other measures to ensure an improved application of the law.

While a number of the areas which will be considered for amendment have arisen as a result of concerns raised by our social partners, my Department has itself conducted an analysis and has identified measures which are required to improve labour market efficiency.

For this reason, a number of amendments to certain provisions of the Labour Relations Act (LRA), Basic Conditions of Employment Act (BCEA) and the Insolvency Act will be introduced this year.

The areas identified for legislative review include the following:

Dismissals and retrenchments
Concerns have been raised about both the adequacy and the flexibility or otherwise of the procedures that regulate dismissals, including retrenchments. Amendments will be proposed which will improve the functioning of the CCMA, refine and/or simplify the procedures and ensure that remedies in respect of unfair dismissal take adequate consideration of the size of an enterprise and the length of employment of an employee.

Amendments to clarify the conditions of employment of workers when companies change hands and when companies are liquidated will also be drafted.

Bargaining councils and small business
While the LRA does include certain provisions to accommodate the concerns of small businesses in relation to bargaining councils, problems remain. Some of these problems can only be addressed by bargaining councils themselves. However, the Department intends to explore the extent to which the law can further enable and promote this.

Registration of employers and trade unions
One of the unintended consequences of simplifying registration procedures on the one hand and not allowing labour consultants into the Commission for Conciliation, Mediation and Arbitration (CCMA) conciliation processes on the other, has been the proliferation of trade unions and employer organisations. From November 1996 to December 1999, the number of registered trade unions has more than doubled to 513.

Amendments will be explored in an effort to deal with the consequences of this problem in relation to collective bargaining and the CCMA.

Improvements to the functioning of the CCMA and Labour Court
The CCMA and the Labour Court, institutions established in terms of the Labour Relations Act, are central to effective dispute resolution and stable labour relations. They have already had a significant impact on the labour market and amendments will be introduced to improve their effectiveness and efficiency.

The amendments include giving Labour Court judges the same status and tenure as High Court judges. This amendment has already been debated at NEDLAC.

Workplace forums
Fewer than 20 workplace forums have been set up in terms of the LRA. There are many understandable reasons for this, including the considerable attention that employers and workers have paid to implementing other aspects of labour laws.

Nevertheless, the Department would like to review the requirement that trade unions must trigger the establishment of such forums. We are seeking the increased utilization of these forums, as we believe they can constitute meaningful avenues of engagement between employers and employees on issues such as restructuring and affirmative action.

Working time
One of the balances that the BCEA tried to achieve was between improving the flexibility in respect of the arrangement of working time while protecting workers from working long hours.

The Department believes that by making modifications to some of the provisions, including removing the premium paid for work on Sunday and increasing the ability of bargaining councils and the Minister to vary the 45-hour week, we can further improve the flexibility of the Act without reducing the protection of workers.

Regulation of atypical workers
There has been a worldwide increase in the use of temporary workers, home workers, sub-contractors and so on. This is a reality which we cannot reverse. However, the Department will be reviewing its legislative framework to establish whether or not it adequately protects such workers.

Conclusion

There are no short cuts in the introduction of legislative amendments and it is my intention to pursue the normal legislative process that we have undertaken with regard to all other labour legislation. I have appointed a legal drafting team to work with the Department of Labour. Draft amendments will be submitted to cabinet for consideration and approval before being tabled in Nedlac and in parliament. I am sure that those who have expressed impatience regarding the introduction of amendments would not wish to see me bypassing any of these processes. This process will be an exciting challenge and one which I am indeed looking forward to.