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- Ideological differences are undermining agreement about a social impact at Nedlac.
- Labour market reform has been delayed as a result.
- The current labour market is a legacy of apartheid, said Deputy President Paul Mashatile.
- For more financial news, go to the News24 Business front page.
The frustration was palpable at the annual summit of the National Economic Development and Labour Council (Nedlac) on Friday.
Nedlac is facing an "existential crisis", warned Business Unity SA (BUSA) CEO Cas Coovadia.
It's now more than a year after President Cyril Ramaphosa pledged a social compact between the state, labour and business to tackle unemployment, sluggish growth and a host of other ills. It was supposed to have happened within 100 days.
But there has been little progress and a lot of frustration at Nedlac, the forum that is supposed to reach a consensus on policy. The social compact has already gone through 11 drafts, without any agreement, Bloomberg reports.
A key sticking point is labour market reforms.
Speaking at the summit, Employment and Labour Minister Thembelani Thulas Nxesi said, "In early 2021, after business, labour, and government had tabled their proposals for labour law reform, I hoped within six or eight months, we would have reached an agreement on a number of chances to improve the efficiency of the labour market without disturbing worker rights [...] However, the process is ongoing, and we are now too late for this parliamentary cycle."
In his address, Deputy President Paul Mashatile said there have been agreements between business and government, but the biggest challenge is about ideological positions among social partner "in respect of the path to growth, which have not shifted despite the enormous crisis the country faces".
"In South Africa, where unemployment is so high, and those who work support many of those who do not, this type of trade-off may be difficult to attain. We must summon enough bravery to discuss the matter openly to prevent the ticking time bomb of poverty, inequality and joblessness from going off."
Nedlac executive director Lisa Seftel says the partners mostly agree on what needed to be done in the short term, but they do not agree on the long-term programme to turn the economy around.
According to Coovadia, there is an "existential risk" at Nedlac, which could threaten the ability of social partners to address ongoing crises within South Africa effectively.
"[Nedlac] must be a forum for social dialogue and focus on a programme in which there is the greatest scope for collaboration across stakeholders instead of being a conflictual platform," he said. Coovadia said South Africa is in a "toxic mix" where the country is no longer an attractive investment destination.
The summit also highlighted Nedlac's constraints as a policy-formulating body to ensure legislative reform.
"Bill implementation is taking too long. The bigger problem is that the government is not tabling the bills," said Seftel.
Only a third of bills since 2015/16 that have passed through Nedlac have become law.
Nxesi said some legislative reforms discussed included improving the functioning of the Labour Court, which has experienced severe backlogs and overworked judges.
"The issue of backlogs at the labour court has compromised workers with few overworked judges. Cases have gone three to four years because there are no judges," said Nxesi.
Mashatile said urgent intervention is required to tackle a labour force inherited from apartheid.
He said: "The current condition of the labour market indicates the abiding legacy of our apartheid past. We have inherited a labour force characterised by racial and gender inequities, skills shortages, and high unemployment rates."
