Labour legislation sets strict requirements for employers. The South African labour market is rightly regarded as highly regulated. This view is confirmed in the World Economic Forum’s Global Competitiveness Report of 2017/2018 (WEFGC report) in which South Africa ranks as follows out of 137 countries:
- Hiring and firing practices: 125/137
- Pay and productivity: 99/137
- Cooperation in labour-employer relations: 137/137
- Flexibility of wage determination: 132/137
- Business cost of crime and violence: 133/137
- Business impact of tuberculosis: 132/137
- Business impact of HIV/AIDS: 128/137
- Quality of higher education: 114/137
- Quality of math and science education: 128/137
In general the report indicates restrictive labour regulations as one of the most problematic factors for doing business in South Africa.
The following legislation regulates labour relations in South Africa:
Labour Relations Act (LRA)
The LRA remains the principal labour statute and regulates collective rights ans also provides protection against labour malpractices. This act regulates trade unions and employers’ organisations. It also establishes key dispute resolution agencies in the form of the Commission for Conciliation, Mediation and Arbitration (CCMA) and labour court.
The BCEA establishes and enforces the minimum statutory terms on which employers and employees may contract.
A Sectoral Determination controls the terms and conditions of employment in a particular sector where there is no centralised collective bargaining and which requires detailed and specific regulations. Conditions in a Sectoral Determination may differ form those in the BCEA, but will rank superior.
Bargaining Council Determinations
Bargaining Councils deal with collective agreements, solve labour disputes, establish various schemes and make proposals on labour policies and laws. Trade unions and employers’ organisations may form Bargaining Councils.
Labour legislation sets certain requirements employers must comply with. Non-compliance can hold serious consequences for employers as the Department of Labour can impose hefty fines and even imprisonment.