The government plans to ‘shake up’ the laws governing business in South Africa – what you should know

The Department of Employment and Labor will consider several labor market reforms in the coming year in response to the Covid pandemic and the country’s record high unemployment, says Director-General Thobile Lamati.

“One of the things that should be researched is the thrust of these reforms what can be sacrificed through business and work in the interest of job creation, to strike a balance between job creation and job security,” Lamati said in his department’s recently released annual performance plan.

He added that the department plans to:

  • addressing aspects of labor law that are inconsistent with international law and the Constitution or inconsistent with comparative labor law;
  • Ensuring that the law responds to the challenges faced by organizing domestic workers;
  • Explore what’s preventing small businesses from creating jobs and ensuring they thrive.

Lamati said he expects the business sector and workers to come up with their own proposals in the coming months on the areas they think need to be changed.

“The National Minimum Wage Commission is also expected to conduct a combination of quantitative and qualitative research to provide insights into the impact of the national minimum wage on the economy, collective bargaining and the narrowing of income inequality, and to recommend benchmarks to the Minister Reducing the proportional income gap,” he said.

The Commission will also recommend adjustments to the national minimum wage to the Minister and set medium-term targets for the national minimum wage.

Stricter transformation laws

One of the key pieces of legislation the Department plans to introduce this year involves changes to employment equality that will allow the Labor Ministers’ system to be introduced later this year.

The bill will allow Minister for Employment and Labour, Thulas Nxesi, to set employment equity targets for different sectors of the economy. The Minister can set targets for different professional levels, sub-sectors or regions.

It also aims to ease the regulatory burden on small businesses and add rules for doing business with the government.

Discussions have already been held with several sectors, including mining, financial and business services, wholesale and retail, and construction.

While some firms and sectors have welcomed the proposed changes, others have warned that the new targets could have a negative impact on the economy.

Read: South Africa Headed for 50% Unemployment Rate: Unions