The Main Parties to the Employment Relationship

Employment Relations

Case Study

Labour legislation in post-apartheid South Africa established a statutory body – the National Economic Development and Labour Council (NEDLAC) – to promote greater co-operation in employment relations and to encourage greater participation by trade unions and employers’ associations in policy formulation. In terms of the relevant legislation, NEDLAC must: (a) strive to promote the goals of economic growth, participation and economic decision-making and social equity; (b) seek to reach consensus and conclude agreements on matters pertaining to social and economic policy; (c) consider all proposed legislation relating to labour market policy before it is introduced in parliament; (d) consider all significant changes to social and economic policy before they are implemented or introduced in parliament; and (e) encourage and promote the formulation of co-ordinated policy on social and economic matters. Labour legislation is premised on the idea that co-operative relations at firm, industrial, regional and national levels should encourage investment and productivity growth and allow for the balancing of business’s need for competitiveness and profitability, labour’s need for secure jobs and decent wages, and society’s need for economic development and employment creation.

Although a system of corporatism in South Africa could potentially lead to a more stable and inclusive system of policy formulation, there are numerous factors that militate against its consolidation and expansion. These include the following: (a) the parties still need to establish the preconditions for co-operative and consensus-seeking interaction and to create a climate of mutual respect and trust; (b) there is a significant ideological divide between organised business and organised labour with regard to (among others) appropriate economic policies; (c) the alliance between the major trade union federation (ie the Congress of South African Trade Unions) and the ruling party (ie the African National Congress) complicates the negotiation process and creates a sense of unease among employers’ associations and the non-aligned trade unions; (d) the trade unions’ militant rhetoric and their readiness to resort to mass action when their demands are not met restrict the scope for consensual dialogue between the parties; (e) the fragmentation of employers’ interest organisations makes it more difficult to reach and enforce agreements; (f) the sheer scale of the problems of reconstruction and development, combined with the impact of global economic forces beyond the control of the parties, places an inordinate burden on labour market institutions; and (g) the unions have experienced considerable difficulty in obtaining informed mandates from their membership when complex social and economic policies are debated.

Despite the many benefits that may be derived from their engagement in structures such as NEDLAC, trade union leaders have highlighted numerous inherent dangers posed by corporatism. These include a growing divide between the leadership and the membership, the unrelenting pressure on the unions to accept the economic perspectives of business, and the stabilisation of a ‘stakeholder’ capitalism, which may rule out a structural transformation of society. Likewise, business representatives have pointed out that there are limits to the agreements they can meaningfully enter into, especially in respect of issues such as investment and prices that are ultimately commercial decisions by individual companies. In its attempts to sustain a corporatist system of regulation, the government is confronted by formidable challenges, which include combining rising labour productivity and employment creation, devising an employment‑friendly means of fighting inflation, formulating co-ordinated responses to unforeseen macro-economic shocks, and developing programmes that will ameliorate the negative labour market consequences of structural change without arresting the necessary process of restructuring.

Questions and Answers

1. List the key objective that the post-apartheid government aims to achieve through a corporatist system of employment relations.
2. What steps must the trade unions, employers’ associations and the government take to ensure the success of a corporatist system of regulation?
3. What are the key challenges confronting the establishment of a viable corporatism in post-apartheid South Africa?