South African labor crisis and steps taken to labor reforms

South African labor crisis
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Executive summary

The evaluation paper is aimed to study the labor crisis in southern Africa. Which highlighted the issues and challenges faced by the institutions and government in mitigating the crisis arose during 2008-2009. This was the era of economic and labor crisis for the South Africans. In which many of the labor industry experience severe crises. A theme of evaluation revolves around the roles and contribution of the industrial relations and bargaining institutions. Bargaining institutions and industrial relations raised some programmes and initiatives to cope with the uprising issues related to labors. Those programs were launched in retaliation to the economic crisis. Performance of those initiatives and programmes will be analyzed in this evaluation paper.

Furthermore, the role of those all institutions which were raised to mitigate economic crisis will be discussed. To what extent the organizations of bargaining and institutional relation hampered or potentially contribute toward the recovery of those problems. It also focused the programmes undertaken and steps considered by the organizations to achieve their goals. The problems and obstacles before the organizations and barganing institutions to reach their goal were political and social. How to achieve their goals in the amid of those challenges was the primary focus of the institutions and government. Responsibility lies hardly on the shoulders of industrial relations and the other collaborative institutions. With the passage of time, some challenges arose due to reshuffling in the political scenarios. Those were among the few of the challenges which are somehow originated from internal conflicts, but we cannot ignore the role of international community in the destabilizing situation. International labor organization (ILO) plays a pivotal role in labor management. Global Jobs pact proposed in 2009 identifies many issues relating economic crisis. Its more focused area was to identify the reasons behind the unemployment and job loss. Solutions were drafted into the form of pacts, that was to create social protection and stability, income generation and balancing employment.

Without performing any activity on the practical ground, we cannot expect its what extent those drafted pacts and resolutions hampered the situations and how they create stability and recover themselves is the prime goal of evaluation. The discussion will go on from organization to organization by identifying the role and contribution toward the recovery of the South African community from severe economic crises. We touche some of the reason behind this financial falls to make the idea clear. The reason may lie in good governance or unequal distribution of income. But what so ever, step by step problems with their solutions will be discussed.

The involvement of the international community in the scene is the appreciative one. China is investing in various projects in southern Africa. Those investments are at the policy level as well as at project levels (Lee, C. K. (2018). The role of international community in mitigating the problem of labor and economic disturbance in South Africa is off the mark. China’s intervention in banking and metrological industry contributes a lot toward the recover. Chines government took these steps in current, past years.

Apart from international contribution, the response from the collective institutions of industrial cooperation and bargaining institutions to the economic crisis in southern Africa in the amid of financial crisis is discussed in details. Institutions who play the pivotal role in the upliftment of South African community from economic crisis are CCMA and NEDLAC. The investigation will revolve around the performance and contributions of these organizations. How they sort out problems and what their significant steps were to take on the issues.


Method of evaluation of the case study is simple forward. The task of the evaluation was executed through direct interviews and phone calls. Data were gathered from articles and previous work done in this regard. The reliable sources were selected for the study. Data collection was to up to confident. Further, more following tools and methods were considered during the whole study.

  • Chief negotiators from the unions and employers party to the bargaining council were interviewed.
  • Bargaining council officials.
  • Directors of NEDLAC and CMMA were interviewed.
  • Government representatives.
  • A senior representative from the social partners.

Reason for the crisis

An economic crisis in Africa may be traced back to their initial socio-economic background and setup. Afarica is among the country where financial crisis and social imbalance prevailed from the earlier stages of their colonization. The problem is also with the awareness amongst the people regarding their current situations. Because mostly they are with the perception that the same is the issue all around the world. They didn’t blame their policies and government setup which brings up the issue. The second thing is the vicious circle of poverty in southern Africa. They are facing the same problem over many decades, yet they have not broken up the vicious circle. Their poverty and economic instability trace back to their vulnerabilities; they have been facing. Loopholes in policy formation and law and order are also the cause of their crisis. Policy structuring drafting and implementation is the key to fight the crisis like the one aroused in South Africa. South Africa is the country where unemployment, labor crisis, poverty, and lack of opportunities prevail. Their crisis may be traced back to their conventional barriers which impede them from taking steps to break up the vicious circle. The obsolete methods of farming and other business are existing among the peoples. Political leaders and policymakers have an important role in putting the country into the economic crises. In 2014 the ANC reelected with the bigger margin but failed to create a balance in resource management. Because the society was involved in mismanagement in vast mineral (wealthBond, P. (2014). Monthly Review, 65(11), 1).

Africa’s growth rate analysis

The growth rate consists two main areas. These are the employment in South Africa and the GDP growth. Time perspective involves the division of different stages. From 2008 to 2009 there were some mega changes were noticed. The take on of economic recession from the third quarter of 2008 to the first quarter of 2009 put the economy of south Africa into the severe crisis. The recession started from the 2008 and prolonged till the first quarter of 2009. This much gape of economic depression is enough to put any economy into severe financial crisis. Almost 900,000 jobs were lost due to this short-term shock in the economy of South Africa. In 2010 another blow to Afric’s economy when soccer world cup event happened there. The results were frustrating, as pre-assumption were made in favor of economic recovery but the fact lets the economy with a loss of almost one million jobs. The event hit the economy to some extent. Economy squeez, where jobs were lost economic imbalance created, social sector and private sector lose confidence in institutions. The events occurred around 2008 and 2009 squeeze the African economy to 1.8 percent. The blame of this contraction goes to the political situations happening in Africa around 2008-9 and the lack of expertise in policy formulation. The crisis where experienced strongly and then labors sort out their solution in the form of collective bargaining (their contribution and effectiveness will be discussed later on). Their political clashes and being ignorant from the crisis arise, put the economy of southern Africa into a fatal condition (Branch, D., & Cheeseman, N. (2008), and state failure in Africa: Lessons from Kenya. African Affairs108(430), 1-26. Losing of jobs and mismanagement in mineral wealth start prevailing in Africa. Whoever responsible for the crisis but that was the right time for them to retaliate back to the arisen challenges. Their response back to the economic crisis brought them up with few solutions. These solutions were the formulation of collective bargaining institutions and industrial relations.

Income inequality and employment in Africa

Income and employment rate fluctuating in Africa since 1995, at the earlier stages of 1995 income growth was better to some extent. This stage of African economy is also known as the recovery face of the economy. The growth rate which has been observed in 1995 was little known for its impacts on poverty reduction and overall economic stability. Recent serve suggests that despite economic growth there is little effect on poverty and financial security (M., Finn, A., & Oosthuizen, M. (2016).The equal distribution of resources and training efficient economic growth is the must concerned area of economic growth. Also, quality of national accounts and other statistics has been taken into account while assessing the performance of the economy. The poverty prevailing in South Africa can be judged from the per capita income of the country. That is far below the desired per capita income. If people in a country relies on such negligible amount of per capita than with no do but, there is the severe crisis. The per capita income of the country is $ 1.25 which is far below the poverty line. Income inequality in Africa is categorized into two groups, the one having more income ion their hands and the other having less share of income. National income is unequally distributed amongst the peoples of Africa. This gape was tried to minimize through social grants which were not in use. After allocation of social grants, the desired results were not found. Thus government policy of raising charitable donations was severely failed to achieve their targets. Same was the cause of the country’s employment level. The initial political and institutional shocks in 2008-9 put the economy in the fatal condition of employments imbalance. The deprivation of 900,000 peoples from the jobs in 2009, was a striking one for the entire economy. The soccer world cup in 2010 doesn’t fulfill the wishes of the peoples. The deprivation of one million peoples from jobs during the era of 2010, may have the link with the soccer world cup. Labor force participation rate consistently dropped. People lose their willingness for the jobs. The reluctance of peoples toward positions may lie deep in their frustrations. The political and institutional imbalance caused that.

The response was quick to the crisis and comes out in the form of new legislation, collective bargaining, and industrial collaborations.

Legislative reforms and collective bargainings

The constitutional settlement in southern Africa has been disputed and controversial. Due to political sanctions and penalties, many workers have been deprived of their jobs. Labors mobility and irregular movements exist due to political sanctions (Dickinson, D. et al. (2017). Reforms in legislation bring up with the solutions in the form of collective bargaining. The labor relation act sorts out solutions to labor management. The sole concern of the collective bargaining is to enhance the social dialogues to boast up the democratic system and to functionalized the institutions, in addition to this stable union formation and with a collaborative nature to nurture the environment of collective working. Through its responsibilities, collective bargaining becomes the sole representative of socio-economic development. The creation of joint bargaining councils and CCMA has the strong impact on the arisen crisis. The policies and solutions sort under these two setups were productive in results. Their strong response triggers the economy toward recovery.

Outcomes from CCMA and collective bargainings

At the initial stages, bargaining council was affected by the crisis; these crises arose in finance of bargaining council. Bargaining councils were affected by the disaster, firstly about their funds. The high financial cost was bear at the initial stages of the organization due to many reasons, interference from outer bodies contribute toward higher cost and financial problems (Bruyn, A. J., & Sotshononda, N. (2017). CCMA and collective bargaining response to the economic crisis were accurate and appreciable. As the economy embark to recover itself. The primary objective of these organizations was to retaliate the financial crisis in the country. Formulation of institutions and regulation of authority was the sole objective of the organizations. Collective bargaining appreciates the dialogue amongst the society to raise their issues to the government and policymakers. This attempt makes the democratic system strong and capable.


The role and responsiveness of the country toward the global crisis are off the mark. The formulation of councils like collective bargaining council and CCMA put the mess back to a greater extent. Collective bargaining played the pivotal role in mitigating the problems. The inequality which was prevailing in Africa was somehow controlled through the institutions formed in response to crisis. The Equal treatment and safety of contractors were ensured through the union of collective bargaining. Improving skills of workers, expertise and implementing of new ideas were appreciated by collective bargaining councils. Improvisation in policies and legislation trigger economic recovery gains. The effectiveness of the collective bargaining councils and CCMA is that within the political instability and resources constraints these councils stand firm. Despite the resource scarcity, the response from the committee was positive and they stick to their responsibilities and task. The achievements from the boards were enough to mitigate the crisis in a better way.

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