Employment & labour minister Thulas Nxesi. Picture: SUNDAY TIMES
Employment & labour minister Thulas Nxesi. Picture: SUNDAY TIMES

The department of employment & labour will not use a “hammer” to deal with employers who do not adhere to labour legislation, including regarding the national minimum wage, opting instead to persuade offenders, minister Thulas Nxesi says.

Nxesi, a former trade unionist, announced in his budget vote address last week that the implementation of the national minimum wage did not lead to wholesale retrenchments, as forecast by some analysts and lobby groups, and that there was in fact high compliance with the legislation, which kicked in on January 1. 

Nxesi was appointed as minister of the new department of employment and labour by President Cyril Ramaphosa in May and faces a daunting task with the addition of employment to what was once only the labour portfolio. SA faces record high unemployment, which was 37.2% in the first quarter of 2019, if the figure for discouraged work seekers are included. 

This while economic growth is stagnant and more job losses loom, despite job creation being one of the most popular electioneering themes ahead of the general elections in May.

Asked in an interview with Business Day last week whether the department would be looking at formal consequences for not adhering to labour laws, Nxesi said that it would deal with matters “case by case”.

Nxesi, who had announced in parliament that the department would employ 200 additional labour inspectors, said that ununionised employees depended on the department and its inspectors to enforce their rights.

Sheer negligence resulted in legislation not being complied with in some instances. However “arrogance” and a refusal to comply also play a role. He said in some instances there might be genuine reasons why people do not comply with legislation such as that concerning the national minimum wage.

“We will have to treat them case by case. It’s not as if we are coming here with a hammer to deal with the employers. It’s to say we want to convince you, to persuade you to comply. But if you don’t comply and there is no reason not to comply, we will have to deal with you,” Nxesi said.

Nxesi said the department’s response would depend on the nature of the issues, with some major transgressions becoming criminal cases, and others resulting in licences being suspended. 

Nxesi’s budget vote address touched on using the department’s passive labour market tools — including the Unemployment Insurance Fund (UIF) — in the current financial year to focus on vocational and remedial training for the unemployed, programmes for youth in transition from school to work, and subsidised targeted measures to provide employment, including subsidies for private sector employers for hiring workers.

Most prominently, the UIF’s High Social Impact Fund invested R1.2bn in Edcon to prevent the loss of 140,000 direct and upstream jobs. Despite controversy about the investment, Nxesi said there were no regrets over saving jobs.

His department cannot cut unemployment levels without working with other departments, he said — the barriers between departments had to be broken down.

“We need to [ask] how do we co-ordinate, complement and integrate our programmes,” Nxesi said, adding that this had to happen between the different spheres of government.

“What’s the point of employment and labour running an empowerment programme here, and then next door in the same locality is another department and they are not talking to each other?” Nxesi said.

A partnership is needed between the state and the private sector in creating jobs.

“If the market fails, the state must … intervene and come up with the policies which are trying to correct the situation. If there is massive unemployment, the state has to … see what it can do to intervene in the economy to help create the jobs,” Nxesi said.