South Africa - International Franchise Association

on telecommunications, oil and gas, power, transportation, agribusiness, media, financial
services and manufacturing.) Tailored products to support clean and renewable energy
are a particular focus. Specific to South Africa, OPIC also currently supports the South
Africa Workforce Housing Fund ($240 million) for investments in individual housing
developments and in companies that contribute to the development and affordability of
residential housing at any point along the value chain. Additional information on OPIC
programs that involve South Africa may be found on OPIC's website:
http://www.opic.gov/investment-funds/africa.
Labor Return to top
The South African government has worked to remove all vestiges of apartheid-era labor
legislation over the last 17 years, emphasizing employment security, reasonable wages,
and decent working conditions. Under the aegis of the National Economic Development
and Labor Council (NEDLAC), government, business, and organized labor negotiate all
labor laws, with the exception of laws pertaining to occupational health and safety. The
law allows all workers to form or join trade unions of their choice without previous
authorization or excessive requirements. Trade union membership figures are imprecise
but total membership is estimated at 3.5 million people, which is 26.1% percent of the
economically active population employed in the formal sector as of September 2011, a
decrease of almost 5% from September 2010.
The right to strike is protected under South African law. The South African Department
of Labor’s 2011 Industrial Action report estimates that 20.6 million work days were lost to
strike action in 2010, far exceeding the 1.5 million work days lost in 2009. In 2011,
major strikes included labor action by workers in the public sector (garbage collection),
mining, transportation, and manufacturing sectors. The transportation strike led to some
shortages of petroleum products, particularly in Gauteng province.
South African business argues that the labor market is rigid and over-regulation has
constrained job creation and employment. Under pressure to preserve jobs in the face
of Chinese competition, in October 2011, the Southern African Clothing and Textile
Workers' Union (SACTWU) agreed to a novel deal that allowed for lower salaries for new
hires.
Amendments to each of the four main labor laws were proposed in December 2010.
The proposals were heavily criticized by business groups and analysts as making South
Africa’s labor regime more rigid and discouraging job creation. The proposed
amendments are being debated at the National Economic Development and Labor
Council (NEDLAC). NEDLAC is a non-governmental organization that was set up by
President Nelson Mandela to include South African citizens in government policy
formation. NEDLAC is comprised of representatives from government, business, and
labor, and it is funded through the South African Department of Labor.
Major labor legislation includes:
• The Labor Relations Act, in effect since November 1996, provides retrenchment
guidelines, stating that employers must consider alternatives to retrenchment and
must consult all relevant parties when considering possible layoffs. The Act
enshrines the right of workers to strike and of management to lock out striking