INTRODUCTION

During its third year of existence, Nedlac considered issues that were often controversial in nature and go to the heart of transformation. While agreement was not always possible on all issues, the process of social dialogue demonstrated its growing maturity as conflicts on one issue did not undermine consensus on others.

Several formal agreements and reports were concluded during Nedlac's third year and, as in previous years, several special projects and events were initiated.

Where possible, the agreements and reports concluded are presented below according to themes.

WORK RELATED TO THE LABOUR RELATIONS ACT

Issues related to the implementation of the Labour Relations Act continued to feature in the work of Nedlac's Labour Market Chamber.

Code of good practice on retrenchments

Nedlac has agreed a code of good practice on dismissals based on operational requirements-that is, retrenchments and redundancies. The code will be added to Schedule 8 of the Labour Relations Act.

This code does not impose legal obligations in addition to those contained in the Labour Relations Act, but rather clarifies to the many users of the Act what these obligations entail. The code must be taken into consideration by any party interpreting the provisions of the Act dealing with these types of dismissals, including the Commission for Conciliation, Mediation and Arbitration (CCMA) and the Labour Court.

The code defines operational requirements, provides a detailed guide to the required consultation process, and provides for the preferential rehiring of retrenched workers. Also outlined are fair criteria for selecting workers to be retrenched and what constitutes a fair offer of alternative employment.

Code of good practice on picketing

A code of good practice on picketing has been issued by Nedlac in terms of section 203 of the Labour Relations Act. The code, which will be published in the Government Gazette, provides much-needed practical guidance to workers, trade unions and employers, as well as to other parties that may be involved or affected by a picket, including the CCMA, the Labour Court and members of the public.

The code requires pickets to be authorised by a union and promotes the negotiation of picketing rules by parties before a picket gets underway. The code also deals with appropriate conduct during a picket, and spells out the role of the police in pickets. The code does not impose legal obligations in addition to those contained in the Labour Relations Act, but explains in greater detail what these obligations entail. The code must, however, be taken into consideration by any party interpreting the provisions of the Act dealing with picketing, including the CCMA and the Labour Court.

Essential services committee

The essential services committee was appointed by the Minister of Labour to conduct investigations into and determine whether a service can be designated an essential service. The members of the committee were nominated by Nedlac. In April 1997 and again in December 1997, Nedlac considered and supported the reappointment of these members to the committee.

Labour Court and Labour Appeal Court judges

The Act confers on Nedlac a role in advising the President on the appointment of judges to the Labour Court and Labour Appeal Court. In September 1997, Nedlac (together with the Judicial Services Commission) interviewed candidates for vacancies in the two courts. Nedlac recommended the appointment of the following candidates, who were appointed by the President on 1 November 1997.

Labour Appeal Court: Judge Sandile Ngcobo and Judge Frank Kroon.

Labour Court: Judge Ray Zondo, Judge Adolph Landman and Judge Dunston Mlambo.

BASIC CONDITIONS OF EMPLOYMENT ACT

The new Basic Conditions of Employment Act was passed by Parliament in November 1997 after a lengthy and, at times, fraught negotiating process.

The new Act provides for the protection of vulnerable workers and also improves conditions of employment by reducing hours of work, increasing annual leave and maternity leave, extending notice periods, and introducing family responsibility leave. The Act changes how working time can be arranged.

Negotiations on the issue started in Nedlac in May 1996 with the establishment of a negotiating team to consider the green paper on employment standards and, later, a basic conditions of employment bill.

In February 1997, Cosatu notified Nedlac of its intention to hold protest action in support of labour's demands on employment standards. This notice was the subject of litigation in the Labour Appeal Court and in a majority judgement the court granted BSA an interdict against Cosatu's planned protest action. Cosatu later proceeded with a campaign of action to support its demands.

The negotiations focused on the core areas of difference between the parties, which included overtime pay, maternity benefits, hours of work and the variation of minimum employment standards.

By mid-May 1997, the parties concluded that an impasse had been reached with respect to the core issues. No further negotiations took place in Nedlac on the bill.

The process of finalising the bill included a series of bilaterals between the parties, meetings of the African National Congress-Cosatu-South African Communist Party alliance, and various meetings to consider Cosatu's section 77 notice of intended protest action over the bill.

The Nedlac report on the bill, which recorded areas of agreement and set out each party's views on matters of disagreement, was finalised by the Labour Market Chamber on 13 October 1997 and was then tabled in Parliament, together with the bill, by the Minister of Labour.

MINE HEALTH AND SAFETY AMENDMENT BILL

The Mine Health and Safety Act, 1996, was agreed by Nedlac in February 1996, although business expressed reservations about certain sections of the Act. Following its promulgation, business and labour in the mining industry set out to explore ways of ensuring the effective enforcement of the Act while addressing business's concerns. These discussions culminated in an agreement between business and labour in the industry and government to introduce a system of administrative penalties to replace the criminal procedures against employers provided for in the Act. The mine health and safety amendment bill was drafted to give effect to this agreement. The bill was supported by Nedlac in August 1997.

REFORMING SOUTH AFRICA'S WATER LAWS

The water services bill

The water services bill was tabled in the Development Chamber in May 1997. The bill sought to secure the right of access to basic water supply and sanitation for all South Africans. The chamber appointed a task team, including representatives of the Department of Water Affairs, to consider the bill.

In August 1997, an agreement on the bill was ratified by Nedlac. The agreement recorded the parties' in-principle support for the bill, the need to redress current inequalities, and the need to provide for:

• The right of access to basic water supply and sanitation.
• Private sector involvement in the provision of water services.
• The regulation of industrial users of water.
• The norms and standards for tariffs.
• The setting of minimum standards of service.

Specific reservations that the parties had about aspects of the bill were taken up separately in the parliamentary process.

The water services bill was adopted by the National Assembly on 29 October 1997 and on 20 November by the National Council of Provinces.

National water bill

The national water bill provides for water resource management aimed at ensuring the sustainable use of water for the benefit of all users.

The bill was tabled in Nedlac in January 1998 and was considered by a task team of the Development Chamber. The task team concluded an agreement on all aspects of the bill in March 1998, except for one section that dealt with the trading of water-use rights.

There was general support in Nedlac for addressing past discrimination in the provision of water and ensuring equitable access to water, on an affordable basis, for all South Africans. Also supported was the principle that the ownership of land does not confer on the landowners the automatic and exclusive right to the water resources on that land. Nedlac recognised the importance of environmental sustainability and supported the "polluter pays" principle that has been enshrined in the bill.

The bill is currently before Parliament. Specific reservations that parties had about the bill were taken up separately in the parliamentary process.

SERVICE TARIFFS

The legacy of apartheid planning has impeded the delivery of services at local level. Government recognised that a uniform and national tariff-pricing policy was required to guide provincial and local authorities in setting service tariffs, and tabled a proposed tariff policy in the Development Chamber.

A chamber task team developed a memorandum of understanding on service tariffs.

The memorandum of understanding establishes a broad framework in terms of which local authorities are able to determine prices for basic services consumed, such as water, electricity, refuse removal and sewerage. The memorandum includes the following key principles:

• Self-financing at a local and regional level to take account of different conditions in communities, and varying capacities to administer and fund services.
• The economic conditions suffered by the poor must also be considered in determining prices for service tariffs, and life-line tariffs should be established to ensure that all people have access to a basic level of service.
• Fairness and transparency in setting service tariffs to prevent discrimination.
• Payment in proportion to the amount consumed with the implementation of effective metering systems.
• Transparency in the allocation of subsidies: it is recognised that cross-subsidisation is needed but that this should be used to cover the expansion of services.
• Consistent tariff enforcement.

Prior to the agreement, no common framework existed to enable stakeholders to determine prices for services. This resulted in payment boycotts and poor delivery of services.

The Development Chamber, in conjunction with the South African Local Government Association and the Masakhane campaign, is considering a popularisation programme for the memorandum of understanding.

THE MASAKHANE CAMPAIGN

The Development Chamber has played a critical role in revitalising the campaign and transforming it into a more people-driven campaign.

The Masakhane campaign was launched in February 1995 with the aims of:

• Accelerating delivery of basic services and housing.
• Stimulating economic development in urban and rural areas.
• Promoting the resumption of rent, service and bond payments.
• Creating conditions for large-scale investment in housing and services infrastructure, and local economic development.
• Promoting the creation of conditions conducive to effective and sustainable local governance.

Following a senior-level workshop held by Nedlac in late 1996, an office was established under the auspices of the Development Chamber, funded by the Masakhane Campaign, to coordinate the revitalisation of the campaign.

Based on the workshop's recommendations, several provincial workshops were held. The aim of these was the development of strategies to revitalise the campaign, and to identify provincial and national initiatives aimed at achieving the campaign objectives, the development of action plans, and the establishment of provincial forums to coordinate activities. Specific matters highlighted by the workshops were job creation, crime prevention and promoting payment for services.

The workshops took place in all provinces between November 1996 and July 1997, and were followed up by regional and local workshops to implement action plans and further localise the campaign. A workshop was also held with the religious community to explore its role in the campaign.

The provincial workshops culminated in a national Masakhane workshop on 25 and 26 July 1997. The national workshop evaluated campaign successes, factors hindering success, and the mechanisms needed to strengthen the campaign.

The workshop was attended by 170 delegates from government, labour, business, the WNC, non-governmental organisations, youth, civic organisations and other stakeholders.

The following recommendations were adopted at the workshop:

1. To support the Masakhane focus week (1-7 September 1997).
2. To support and supplement the one-year programme of action starting with the focus week.
3. To take the work of this campaign forward by enhancing capacity-building through further sectoral workshops and other sectoral activity.
4. To promote the building of development forums in all communities, and to strengthen participation through this in the local government participatory budgeting processes.
5. To promote and popularise community-based development initiatives, e.g., the Masakhane awards.
6. To promote the establishment of a database to monitor and accelerate delivery processes.
7. The Nedlac Masakhane planning committee, together with the Masakhane provincial coordinators, should coordinate work towards the focus week, fine-tune the one-year programme of action, and seek to refine the various proposals and suggestions made in this workshop in a more detailed report.
8. Measurables:

A national meeting will be called within a reasonable period to evaluate the achievements, successes and failures of the Masakhane campaign against concrete measurables based on:

• Delivery.
• Participation.
• Payment for services.
• Partnerships.
• Communication.

The planning committee should concretise the practical mechanisms for measuring the impact of the campaign.

The national workshop resolved that the campaign should be coordinated by an independent structure that was closely linked to both the Department of Constitutional Development and Nedlac's Development Chamber. This resolution was supported by Nedlac's Management Committee in July 1997.

Since the workshop, the Development Chamber has been involved in supporting the implementation of the resolutions.

Nedlac has assisted with the holding of a Masakhane women's summit in February 1998 and a Masakhane youth summit in March 1998, as well as with the Presidential Masakhane Awards.

THE WORKPLACE CHALLENGE PROGRAMME

Productivity is a controversial issue in labour-business relations. However, it is an issue that must be tackled if South African industry is to meet the challenge of re-entry into the global market. The Workplace Challenge programme was initiated with the aim of bringing together labour and business, with the support of government, to jointly tackle this thorny and complex issue.

The programme came into being in 1996 when the National Productivity Institute and Nedlac's Trade and Industry Chamber agreed to develop a programme to facilitate activities that would enhance efficiency, equity and promote global competitiveness.

The first phase of the Workplace Challenge programme was successfully completed in 1996. It comprised provincial workshops aimed at generating dialogue between business and labour on productivity, competitiveness and employment creation.

A publication on the first phase of the Workplace Challenge is available from Nedlac.

Agreement on the second phase

In 1997, the Trade and Industry Chamber concluded an agreement on a second phase of the programme that would consist of projects in selected industrial sectors. The Department of Trade and Industry agreed to provide R13 million to fund the second phase as one part of its supply-side measures programme.

The key objective of the programme is to encourage cooperation between employers and workers to generate better performance by a company, with the benefits being shared by all. Specifically, the Workplace Challenge programme seeks to facilitate processes within sectors that will culminate in broad agreements on workplace change goals and mechanisms at sector level, with specific goals, mechanisms and gain-sharing procedures being negotiated at individual firms. The agreements will include a wide range of interrelated matters like work organisation, working time, job design and grading, multiskilling, performance-linked remuneration and workplace governance. Government incentive schemes can also be accessed to augment the impact of productivity-enhancing changes in the workplace.

The Workplace Challenge programme also involve the training and education of participants on relevant issues affecting the competitive position of the sector to which the company belongs.

The objectives of this initiative include employment security, employment creation and the promotion of equity.

Criteria have been developed for the selection of projects, including a commitment to sound labour relations and skills development.

Implementation of the second phase

The funding and contractual arrangements for the programme were finalised towards the end of 1997. The programme is being managed by the Workplace Challenge committee of the Trade and Industry Chamber. The committee comprises representatives of business, labour, government, the project manager and the fund administrator.

The Workplace Challenge committee has selected two projects which are currently underway in the plastics, petrochemicals and synthetic-fibres sector and in the footwear industry in KwaZulu-Natal.

The programme was officially launched on 16 March 1998 by the Deputy Minister of Trade and Industry.

The committee will start reviewing substantive results from the projects later this year and will develop tools for evaluating the projects and for diffusing the lessons learnt to the economy in general.

FUND FOR RESEARCH INTO INDUSTRIAL DEVELOPMENT, GROWTH AND EQUITY

Over the past three years the Industrial Development Corporation has administered the Japanese Grant Fund (JGF) for research into competitiveness under the supervision of a Nedlac subcommittee. This fund has developed, through research and consultation, many of the key economic initiatives of the current government, such as the establishment of Investment South Africa, the creation of the competitiveness fund, and the establishment of several important cluster programmes. The funds have now been fully utilised and all JGF studies will be completed by the end of this year.

The JGF programme was regarded by the Nedlac parties as very successful, and there was a strong interest in continuing the programme.

The Executive Council agreed in August 1997 to establish a fund for research into industrial development, growth and equity to continue the work of the JGF programme. The new fund will be funded from the supply-side measures budget of the Department of Trade and Industry. As with the JGF, the aim is to conduct research studies that produce implementable policies that enhance the competitiveness and efficiency of sectors, and build both individual and institutional capacity.

The fund is supervised by a Nedlac subcommittee and will have two areas of focus: studies on industries that produce tradable goods and services, and cross-cutting studies on issues that impact on competitiveness.

Guidelines and protocols for the selection of investigations that can be funded are being developed.