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  • Beyond 'lean' social democracy:labour law and the challenge of social protection
  • Paul Benjamin



Establishing a new framework for labour market regulation has been one of the most significant achievements of South Africa's democratic government. The process of social dialogue over labour legislation that emerged in apartheid's latter years was institutionalised and broadened by the establishment of National Economic Development and Labour Council (NEDLAC) in 2004. NEDLAC became the forum for negotiations on a quartet of labour laws: the Labour Relations Act (LRA) of 1995; the Basic Conditions of Employment Act (BCEA) of 1997; the Employment Equity Act of 1998; and the Skills Development Act of 1999. In broad terms, these laws sought to establish core worker rights, facilitate South Africa's reintegration into the world economy and overcome apartheid's inheritance of a labour market marked by high levels of inequality and unemployment, and low levels of skill and productivity. The International Labour Organisation (ILO) has described the process of social dialogue development over these laws as 'intense, constructive and effective'.

The second five-year parliamentary term can be seen as a period of review and adjustment. The tone was set by President Mbeki's opening address to Parliament in 1999, in which he announced a review of labour legislation to identify rigidities introduced by the new laws and any unintended consequences for job creation and business.1 The following year, the Government published proposals to amend the BCEA, the LRA and the labour provisions in the Insolvency Act. After extensive negotiations, these Acts were amended in 2002 with organised labour blocking many of the reforms Government has set out to achieve. In 2001, a modernised [End Page 32] Unemployment Insurance Act was passed, and in 2003 the Skills Development Act was amended.

The Department of Labour's Programme of Action and Strategic Plan for 2004-2009 emphasises the continuity of labour market policies. It stresses the need for the impact of legislation to be monitored and evaluated, for increased capacity to be devoted to implementing and enforcing existing laws, and for labour market policy to be harmonised with broader government polices on job creation.

However, the theme of review and adjustment was returned to in President Mbeki's February 11, 2005 State of the Nation address. He announced that as a result of a review of the regulatory framework applicable to small, medium and micro-enterprises, the government would implement during 2005 'a system of exemptions for these businesses with regard to taxes, levies, as well as central bargaining and other labour arrangements'.

This theme of exemption and de-regulation was continued with the circulation of an ANC policy paper, arguing for the introduction of a two-tier labour market in which businesses with fewer than 200 employees would be exempted from much (exactly how much is not specified) of the labour laws (ANC 2005). Following a high profile debate which began within the press and ANC policy-making circles, both these initiatives have been temporarily shelved pending further investigation and research. During this debate, it emerged that the regulatory review referred to by the President only dealt with the red-tape requirements of labour law such as registration and did not attempt to measure the benefits of labour regulation.


This article seeks to examine three inter-related issues that are central to policy-making on the future direction of labour market regulation in South Africa. The first of these is an examination of the impact of changes in the nature of work and the labour market on the efficacy of labour law. In particular, it will examine the implications of a 2004 report published by the Department of Labour, which shows that increased levels of informalisation in the labour market have eroded labour protection for South Africa's workers. This discussion is preceded by an examination of international debates on the impact of changes in the nature of work on labour market regulation for policy-making in South Africa.

A second concern is to examine the potential intersections between labour legislation and those laws that create the broader social security net. [End Page 33] This analysis draws on the characterisation of South...


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