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LESSON 01: THE CONTEXT OF LABOUR RELATIONS

MANAGEMENT IN SOUTH AFRICA

LEARNING OUTCOMES

After studying this lesson, you should be able to:

x Distinguish between labour relations and industrial relations.

x Differentiate between the following concepts: employee relations, employment relations and the
employment relationship
x explain the nature of the tripartite employment relationship in South Africa
x Identify relevant labour relations theories and perspectives and discuss their applicability.
x Distinguish between the macro-environmental and micro-environmental factors of South African labour
relations
x Discuss the development of labour relations as a field of study in South Africa

KEY CONCEPTS

The key concepts in this lesson are:

x labour relations
x the employment relationship
x the tripartite relationship
x labour relations theories
x labour relations perspectives
x macro-external environmental factors
x micro-internal environmental factors

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Introduction to the
lesson

Understanding
Conclusion the term "labour
relations"

LESSON 1

The
The tripartite
development of
employment
labour relations
relationship
in South Africa
Macro (external) and
micro (internal)
environmental
factors influencing
labour relations

Figure 1.1: Schematic outline of lesson 1

1.1 INTRODUCTION

After studying the module, Introduction to Labour Relations, you will realise that effective management of
labour relations results in less conflict and fewer grievances, disputes and strikes in the workplace. The
more management secures the satisfaction of the employees and trade unions, the more cooperation will
be seen between them and the employees and trade unions.

In lesson 1, you will learn about key concepts, terms and theories related to the management of labour
relations. You will be able to distinguish between concepts that are used interchangeably. The lesson will
also introduce you to relevant theories on labour relationships.

To get you thinking about labour relations, read the scenario below and reflect on the questions that follow:

Chaos and disorder in the organisation

Picture yourself arriving an hour early for a job interview at one of the biggest banks in South Africa.
While you are waiting for your turn to be interviewed, one of the employees informs you that you are
welcome to help yourself to tea or coffee. You decide to make yourself a cup of coffee using the self-
service coffee machine. On your way to the coffee machine, you pass a boardroom with an open door.
Inside the boardroom you see people sitting. On the right side of the table are people who are wearing
formal business attire and on the left are people who are wearing trade union T-shirts. What catches your
attention are the facial expressions of the people in the boardroom – all reflect unpleasantness and
hostility.

When you arrive at the self-service coffee machine, you see the following in a nearby open-plan office:

x Four employees arguing about their duties and the allocation of work.
x Employees looking stressed.
x Tables full of files and documents.
x Employees searching frantically for documents.

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x Documents and electric cables scattered on the floor.

x A queue of frustrated, unhappy and dissatisfied clients who are waiting to be helped.
x One of the employees tripping over a cable, resulting in a big stack of files falling.

x What do you think is happening in this workplace?

x Who do you think the two groups of people in the boardroom are?
x Can you think of a reason why these two groups look displeased and hostile to one another?
x Do you think the employees in the open-plan office are working towards the same goal or not? Why
do you say so?
x Do you think the employees are communicating effectively with one another?
x Would you be keen to work for an organisation like this?
x Why, do you think, is it important to study labour relations?

Irrespective of the type of industry, the sector, the business type, and the size or profitability of the
business, all organisations have to manage their labour relations effectively. While some organisations do
manage their labour relations effectively, others do not.

Now that you know how important sound labour relations are in the workplace, we will explain the term
“labour relations” and differentiate it from similar terms.

1.2 UNDERSTANDING THE TERM “LABOUR RELATIONS”

The terms “labour relations” and “industrial relations” are used interchangeably because they have the
same meaning. “Labour relations” consists of two words: “labour” means work and “relations” refers to
interactions/relationships and how people relate to one another. Therefore, “labour relations” refers to how
people relate to one another at work. “Industry” refers to business, trade or any productive activity in which
people engage (often also called “labour”). Both labour relations and industrial relations are outcomes of
employment relationships in organisations.

The concept of industrial relations is the same as the original concept of labour relations. Labour
relations emerged because of the expansion of the field from industry to more labour-oriented areas. It
originated from the Industrial Revolution in Britain in the 18 th and early 19th centuries when machinery was
introduced in industries, replacing animal and human power with technological and mechanical power and
transforming agriculture-based economies into manufacturing-based economies. The Industrial Revolution
brought about rapid development in Britain and spread to other countries. The focus moved from working
on lands and farms to working in mines and the textile and related industries. Industrialist societies were
created, driven by machinery or technology and the division of labour to achieve large-scale or mass
production to supply and support large populations in growing economies. The balance of power shifted
from workers who had little income to owners who had abundant resources to buy and finance factors of
production. The move from working at home and on the land to working in factories and mines in cities to
earn a living shifted the focus from owning land to becoming entrepreneurial.

In the field of labour/industrial relations, employees, employers and the state must be present in order for
the employment relationship to exist. It is incorrect to say that the employment relationship cannot exist
without the state. It can exist, albeit without laws that regulate the employment relationship between
employees and employers. However, the relationship CANNOT exist without employees and employers.
Note that the state is a secondary role-player that guides the employment relationship between employees
and employers through labour laws, rules and regulations.

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The field of labour relations is concerned with organisations’ dealings with employees and the relations
between management and employees in industries. It includes the study of managing employment
situations that are unionised and non-unionised. Labour relations are relations that stem from the
employment relationship between employers and employees, and employees and management, who enter
into the employment relationship in t h e public and/or private sector and wherever people are
employed. It may involve a simple, interpersonal communication process between only two people, such
as the employee and the employer (Finnemore & Joubert 2013).

The definition of labour relations includes the interactions and relationships between employers and
employees and between the management and employees of organisations. It refers to interactions
between employers, employees and the government, and the institutions and associations whereby such
interactions are mediated. Hence, labour relations covers all aspects of the employment relationship,
including human resource/personnel management, employee relations and trade union–
management/labour relations. Labour relations also pertains to the study and practice of collective
bargaining, trade unionism and labour-management relations.

In the field of labour relations, behaviour, attitudes, procedures and practices are studied to resolve and
minimise conflict in the work situation. Hence, legislation, rules, regulations, and guidelines are created to
maintain peace and harmony in the workplace and industries. Consequently, labour relations is a multi-
disciplinary field of study that is influenced by practices involving the employment relationship. The diagram
below shows some of the disciplines or fields of study that are linked to the field of labour relations and
potentially have a significant influence on industrial relations, such as economics; politics; law; the
humanities, and behavioural and social sciences.

Figure 1.2: Disciplines that influence labour relations

Source: Adapted from Swanepoel & Slabbert, 2012:24

Labour relations involves relationships at both the formal and informal levels in organisations. It
encompasses all the relationships between an organisation and its employees and their trade unions,

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employers and employers’ organisations, the state, the community and the environment. These
relationships are directly and indirectly affected by the activities of the business, customers, competitors,
suppliers, financiers (such as banks and investors), shareholders and stakeholders (such as the National
Economic Development and Labour Council [NEDLAC] and the International Labour Organisation [ILO]).
You will learn more about these role-players and stakeholders in labour relations, and their relationships,
in Lesson 02.

Labour relations may occur between groups in the workplace, such as management and a group of shop
stewards. Much broader interaction may develop between an employers’ organisation and trade
unions which bargain collectively for their members within a specific sector of the economy. At a national
level, it could involve consultation between the employers’ organisation and the state. On a global
scale, trade unions and employers’ organisations are linked to international bodies and are involved
in the development of regional and international agreements and standards (as illustrated in Figure 1.2).
Hence, labour relations are an ongoing process of interaction and power testing between two or more
parties in the employment relationship.

Figure 1.3: The parties in the tripartite employment relationship

Source: Finnemore & Joubert, 2013:22

Now that you know the definition of “labour relations”, it is important to be aware of similar terms in order to
differentiate between them. Let us look at one such term which may be confused with “labour relations”.

“Employee/Employment relations” refers to how relationships between employees and employers are
maintained in order to promote job satisfaction, productivity, and improve employee motivation and morale.
It includes preventing and resolving problems between individual employees that may arise from work and

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affect work performance. It also refers to the behaviour, interactions and communication between
employees and their employers, particularly in relation to employees’ and employers’ rights and duties in
the workplace and employees’ happiness and satisfaction in their jobs. It also deals with how organisations
maintain their relationships with internal and external stakeholders that may be directly and/or indirectly
affected by their business activities.

You should now know the roots of labour relations, understand the term “labour relations”, and be able to
differentiate it from “employee/employment relations”. In the following section, we discuss the
employment relationship between employees and employers.

Activity 1.1
In approximately 150 words distinguish between labour relations and industrial relations.

1.3 THE EMPLOYMENT RELATIONSHIP

Organisations sell goods and/or offer services to customers with the aim of making a profit. To produce
good products and render quality services to customers, two parties (namely the employer and the
employee) enter into an employment contract. By entering into a contract, the employee places his/her
labour potential, skills, knowledge, experience, talent and competencies at the disposal of the employer. In
return, the employer remunerates the employee. Once an employee willingly works for an employer,
he/she has entered into an employment relationship with the employer. The relationship is therefore
reciprocal.

The employment relationship exists as soon as the employee and employer enter into an employment
contract. From then on, they have a working relationship that must be managed appropriately to ensure
order in the workplace by minimising conflict and disputes (discussed in Lesson 08) as well as industrial
action (discussed in Lesson 09). To maintain sound labour relations, management should apply the
principles of handling discipline situations (including dismissal) fairly to all employees (discussed in Lesson
05), and deal with grievances in a fair and effective manner (discussed in Lesson 06).

The employment relationship can be regarded as a “legal” connection between an individual employee and
an employer. It exists when an employee performs work for an employer under certain conditions in return
for wages or a salary. In Lesson 02, you will learn about the reciprocal rights and duties of employees and
employers in the workplace. The existence of the employment relationship led to the creation and
application of labour law, and policies and procedures, to govern the behaviour of employees and
employers.

Ideally, employees and employers should work together in peace and harmony without any disruption
to productivity in the workplace. However, conflict and disputes in the workplace do arise. There are
many reasons for this, including perceived or real differences in values and goals, control over limited
resources, and divergent interests and objectives (Bendeman 2003). For example: Management may want
higher profits and aspire to venture into other businesses, which may be contrary to employees’ demands
for higher income. An increase in inflation diminishes the purchasing power of consumers, reducing their
ability to pay for some of their basic needs (such as food, school fees, housing and medication).
Employees may then demand salary increases from their employers. A high inflation rate may spur on
employees to demand a wage/salary increase in order to maintain a decent standard of living. This
example shows that the employment relationship is characterised by conflict and disputes. Hence, rules
and regulations have to be applied to guide and discipline employees’ behaviour and maintain order in the
workplace.

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Even though employers and employees have a strong interdependence, the nature of the employment
relationship is such that it is inevitably characterised by tension, conflict and disputes in the workplace.
Conflict is therefore part of any working or employment relationship. Employees depend on employers for
work in return for wages/salaries, and employers depend on employees to produce quality products and
provide efficient services in order to make a profit. Consider the following figure:

Figure 1.4: The employment relationship

Source: Adapted from Finnemore & Joubert, 2013

The figure shows that in the employment relationship, the employer has more power than the individual
employee. In other words, the employment relationship between the employer and employee is unequal.
For example, it is a managerial prerogative to select and hire employees whom employers want to employ
and to decide on the conditions of employment (even though legislation guides this process). This shows
that there is a power imbalance between the two parties – the employee is in a much weaker bargaining
position and the employer has more power than the individual employee. However, employees are not
prevented from resigning from their current employers as they may choose which employers or companies
they want to work for. Nonetheless, this power imbalance – as well as a perceived or actual breach of
contract – may create or trigger conflict in the workplace. Employees join trade unions so that they can
have collective power to counteract employers’ power. Through collective bargaining, the power of the
employer and that of employees is somewhat balanced.

The concept of power, and its use by employees and employers, is a major feature of the workplace.
Employers and trade unions have access to varying sources of power whereby they achieve their goals. In
an attempt to achieve their goals, the parties continuously release and test their power. Thus, labour
legislation, created by the state, is necessary to protect employees and address the asymmetry in the
employment contract by prescribing minimum conditions of employment, which the parties may not ignore
even if both want to do so. Therefore, it is vital to know which policies, procedures, rules, regulations and
legislation employees and employers should follow and apply to deal with issues in the workplace. For
example, a breach of hours of work may be dealt with by applying the Basic Conditions of Employment Act
75 of 1997. We discuss the legal framework of labour relations in Lesson 03 and deal with workplace
strategies, policies and procedures to manage labour relations in Lesson 04. We discuss discipline and
dismissal in Lesson 05 and focus on how to deal effectively with grievances in Lesson 06. In Lesson 08
we show you how disputes between employees and employers can be resolved in order to avoid industrial
action, which we discuss in Lesson 09.

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Activity 1.2: The concept of employee relations

In your own words distinguish between the following concepts

x employee relations
x employment relations
x the employment relationship

Feedback to activity 1.1

Refer to the Sections regarding industrial relations, labour relations, employee relations and employment
relations. The employment relationship exists from the moment when the individual employee enters into a
contract of employment with the employer.

Now that you understand what the employment relationship is, it is important to learn more about the
tripartite employment relationship. In the following section, we discuss the three main parties in the tripartite
employment relationship.

1.4 THE TRIPARTITE EMPLOYMENT RELATIONSHIP

You already know that, in order to produce quality products and render good service delivery, employers
have to hire employees with the necessary competencies to contribute to the achievement of the
organisation’s goals. In return, employers have to remunerate employees for their labour so that they
continue to work. This requires employers and employees to enter into a contract of employment. These
two parties are legally bound by the terms and conditions of their employment contract.

In terms of the Labour Relations Act 66 of 1995 (LRA), “employee means any person, excluding an
independent contractor, who works for another person or for the state and who receives, or is entitled to
receive, any remuneration; and any other person who in any manner assists in carrying on or conducting
the business of an employer”. Employers refers to managers and owners who have the authority to make
business and employment decisions on behalf of the organisation. The state plays two roles in South
Africa: it is the employer in government organisations and it is a legislature (law-making body) for all the
entities in the nation. In terms of the workplace, it is the governing body of the nation that passes laws to
govern and regulate the employment relationship. The labour relations between these three parties are
called the tripartite employment relationship because it involves employees ( often represented by trade
unions), employers ( often represented by employers’ organisations) and the state. The employees and
employers are the primary role-players and the state is the secondary role-player. The nature of the
tripartite employment relationship (which has three main parties/role-players) are shown in Figure 1.4 and
then discussed in more detail (Bendix 2015):

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Figure 1.4: The nature of the tripartite employment relationship

Source: Finnemore & Joubert, 2013:22

Activity 1.3: The nature of the tripartite employment relationship in South Africa
Complete this activity in the discussion forum.
In approximately 200 words, critically discuss the tripartite employment relationship in South Africa.
Discuss the role of each party and then state which of the three parties, in your opinion, plays the most
significant role.

1.4.1 Employees and trade unions

Employees provide their labour a n d services to employers in exchange for remuneration in the form of
wages/salaries. In terms of the LRA, it is vital to identify who is an employee. It is also vital to distinguish
between a permanent employee and a contract worker (independent contractor). A permanent employee is
a person whom the employer hires to work on a full-time basis. An independent contractor is a person or
business that provides work, goods or services to an organisation for a specified period under the terms
and conditions stipulated in the employment contract.

A trade union is a group of employees formed to represent employees in work-related matters in order to
protect the interests of employees in the workplace and counteract the power of employers. Trade
unions represent employees during grievance procedures and disciplinary hearings, and negotiate better
employment terms and conditions for employees. Trade union representatives or shop stewards recruit
new members, assist and represent members in grievance and disciplinary procedures, and consult and
negotiate with management on the terms and conditions of employment. These terms and conditions
include matters relating to employees’ salaries and wages, working hours, and health and safety in the
workplace. Socio-economic matters ( such as wage/salary increases) and matters of mutual interest
(such as negotiating alternative employment conditions to avoid retrenchment and job losses) are
some of the work-related matters on which trade unions represent employees. A trade union’s duties also
include organising strike ballots, getting a mandate from members during negotiations, participating in
health and safety committees, and keeping members and trade union officials informed. You will learn
more about trade unions and collective bargaining in Lesson 07.

The need for power to defend their interests i s the main driving force b e h i n d employees joining trade
unions to counteract or neutralise the power of employers. If all the employees in an organisation refuse
to work for low wages or under poor working conditions, the organisation may be forced to improve the

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employees’ wages/salaries and conditions of employment. This may be a rational strategy for employees,
not only to gain benefits from the employer, but also to reduce the power of unilateral managerial control
over workplace decisions. Trade unions not only aim to improve employment conditions, such as
wages and benefits in the workplace, but also to defend and protect their members from dismissal,
retrenchment and pay cuts. Trade unions exist to counterbalance injustice in the workplace. An individual
employee alone may struggle to successfully n e g o t i a t e socioeconomic matters that may affect
him/her in the workplace. Trade unions use collective power to negotiate with management on behalf of
employees.

Activity 1.4: Trade unions.

Complete this discussion activity on the Discussion tool on myUnisa.
Time required to actively engage with the activity: 15 minutes.
Watch the video clip at https://www.youtube.com/watch?v=dNb0VYyfarc
In approximately 150 words, share with your colleagues possible reasons why employees join trade
unions. Write down as many reasons as you can identify from the video clip.
Read the responses of your fellow colleagues and respond to at least one posting.

Feedback to activity 1.4

From the video, you had to identify a number of reasons why employees join trade unions. Employees join
trade unions to eliminate exploitation in the workplace and to fight for higher and equal pay for equal work
for employees of all genders and races. Trade unions negotiate employment terms and conditions, safe
and healthy work conditions; and the education, training and development of the workforce. Trade unions
fight to protect jobs and employees against retrenchment; they fight against child labour, unfair labour
practices and sexual harassment in the workplace. There are more reasons why employees join trade
unions than the ones we mention here.

1.4.2 Employers and employers’ organisations

Employers employ people and use their labour and/or services in return for payment. The role of
employers (owners or managers) is to ensure that the right work is done in the right way to produce
quality products and render quality services to customers in order to make a profit for the organisation. An
employers’ organisation is an association of employers formed to further the interests of employers in
matters such as negotiating employment terms and conditions with trade unions. Employers’ organisations
try to get the co-operation of employees, protect the interests of employers and create a healthy industrial
environment so that the objectives of organisations can be achieved. They influence the state and labour
policies on various employment-related matters, for example, the regulation of minimum wages in
certain industries and sectors.

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1.4.3 The state

Another party in the tripartite employment relationship is the state, which is the governing body of a nation.
It is the system by which a nation, state, or community is governed. The state plays a major role through
the regulation of the economy and the relationships amongst employees, employers and trade unions. The
state makes laws for the country and thus acts as regulator. The state regulates the relationship between
employees and employers; and provides structures and processes which the two parties should use to
resolve their conflict and disputes. For example, the state plays an active role as a mediator in the
management of labour relations; and provides the institutions and legal processes to deal with disputes
between parties in labour relations when necessary. (We discuss dispute resolution processes and
institutions in Lesson 08.) It renders services to labour relations parties in order to manage their relations in
an orderly manner, for instance, by establishing rules and guidelines for fair labour practices.

The state makes laws for the country; promulgates Acts such as the LRA; and regulates and amends
labour Acts, rules and regulations, to which employers, trade unions and organisations must adhere. The
state has the power to create labour relations legislation to regulate the conduct of employees and
employers in the workplace. Thus, it is directly involved in labour relations by passing laws to protect both
employees and employers against unfair practices, and regulating and establishing sound labour relations.
Finally, the state is the employer of government employees in the public sector.

Apply your understanding of the three main parties in labour relations.

Activity 1.5: Roles and responsibilities of parties in the employment relationship.

This is an individual written activity. Time required to actively engage with the activity: 5 minutes.

State the relevant parties responsible for the following roles.

Roles and responsibilities Relevant

party

Represent employees by negotiating good working conditions and

better wages/salaries on behalf of employees.

Regulates the relationship between employees and employers.

Assist and represent employees in grievance procedures, disciplinary

hearings and dismissal cases.

Negotiate employment terms and conditions with trade unions.

Acts as a mediator in the management of labour relations.

Influence the state and labour policies regulating minimum wages for
employees.

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Now that you know the importance of studying labour relations and can differentiate the term “labour
relations” from similar terms, you should understand how the employment relationship is characterised and
be able to identify the three main parties/role-players in the tripartite employment relationship, as well as
their roles and responsibilities.

In the following section, we discuss major theories, perspectives on labour relations and environmental
factors that influence the management of labour relations in organisations.

1.5 THEORIES OF LABOUR RELATIONS

If you are wondering why the management of labour relations in certain organisations is depicted mostly in
terms of a power struggle between employees and employers while there seems to be harmony in other
organisations, the section below will give you some answers. We discuss the major theories of labour
relations, the perspectives on labour relations and the environmental factors that influence the
management of labour relations in organisations.

The theories of labour relations attempt to provide models and ideologies which influence the management
of labour relations in organisations. In Sections 1.5.1 to 1.5.6, we discuss the major theories of labour
relations as follows (Bendix 2015; Finnemore & Joubert 2013).

1.5.1 The Marxist theory

According to the Marxist theory or radical perspective, the value of a commodity should be determined by
the amount of human labour that is used in its production (thus it is also referred to as the labour theory of
value). This theory holds that labour relations should be studied against the nature of the capitalist society,
where there is a fundamental division of interest between capital and labour. Inequalities of power and
economic wealth are viewed as rooted in the nature of the capitalist economic system. Conflict is therefore
viewed as inevitable. Trade unions are formed as agents to ensure societal change that prevents the
exploitation of labour by capitalists. While there may be periods of acquiescence, institutions of joint
regulation enhance rather than limit management's position as they presume the continuation of capitalism
rather than challenge it.

The Marxist theory advocates issues such as women’s rights, the right to education and freedom of
religion, and the right to fair wages in order to bring about social and humanitarian change. T r a d e
unions are considered important vehicles for collective bargaining and legislation s h o u l d be
implemented to protect w o r k e r s from exploitation in the labour market in order to eliminate the effects
of a free-market economy and a capitalist society such as poor living and working conditions. Because the
Marxist theory advocates that workers should be in control of their workplace and there should not be class
differences, it supports the formation of trade unions and their struggle for higher wages and improved
working conditions. As a result, the Marxist view focuses on achieving balance and equity in society by
overcoming inequity in the workplace. This includes encouraging the formation of trade unions to defend
the socio-economic needs of employees and to protect their rights in the workplace. Because the Marxist
theory advocates that workers should be in control of their workplace and there should not be a class
difference, it supports the formation of trade unions and their struggle for higher wages and improved
working conditions in order to eliminate the class difference.

1.5.2 The free-market theory

According to the free-market theory, society is driven by the need to make profits and accumulate more
wealth (thus a capitalist society). In a free-market economy, labour is regarded as a natural commodity.

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Labour is subject to market forces, in other words to the laws of supply and demand in the labour market.
Intervention by the state is not encouraged. Capitalism refers to an economic and political system in a
country where trade and industry are controlled by private owners for profit rather than by the state. It
includes private enterprise, the privatisation of industries and a free-market economy. Characteristics of
capitalism include the accumulation of capital; competitive business markets; wage labour; and participants
in the labour market determining the prices at which assets, goods and services are sold. The natural laws
of supply and demand are also characteristics of a free-market economy. Figure 1.5 shows the flow of
demand and supply in a free-market economy.

Figure 1.5: The demand and supply of labour

Source: Adapted from Swanepoel & Slabbert 2012:4–8

The labour market can be compared to a market where buyers of labour (employers) and sellers of labour
(employees) meet. The product that is bought and sold is labour. An employee sells his/her labour in
exchange for financial rewards (money) and the employer buys labour/services from the employee. Labour
is regarded as a commodity; this means that it can be bought and sold. In the business environment,
labour and capital interact to produce goods and render services to consumers in exchange for money.

1.5.3 The open-system framework/theory

Dunlop’s systems theory (also called the open-systems framework or theory) is a useful framework to
explain the field of labour relations. It traces the links between environmental factors that affect the labour
relations role-players and their goals and power bases, as well as the structures and procedures that have
been developed to institutionalise and control conflict. It indicates how micro-environmental and macro-
environmental factors influence labour relations (refer to Section 1.7 for the discussion). The theory states
that, because parties to labour relations do not live in a vacuum but in an environment, micro-
environmental and macro-environmental factors trigger conflict between the parties in labour relations.
Internal or micro-environmental factors (over which the organisation has control) and external or
macro-environmental factors (over which the organisation has no or little control) influence the
organisation’s strategy, which in turn has an impact on the management of labour relations.

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External environmental factors are:

x economic factors such as globalisation, changing and competitive business markets, economic
growth, the inflation rate, the interest rate, unemployment and skills shortages
x political factors such as political parties and alliances, ideologies, international relations and socio-
economic policies
x legal factors such as labour laws/legislation and regulations
x social factors such as the media, demographics, the standard of living, health issues, gender, race,
cultural diversity, education and poverty

These external factors influence decision-making and affect the performance of an organisation. Therefore,
the management must be able to evaluate and monitor these factors in order for the organisation to survive
in the long run, as they affect how the organisation does business.

These environmental factors have an impact on the expectations, needs and goals of employers,
employees and trade unions. Consequently, parties will exercise their strategic choices to respond to and
interact with these factors. Therefore, in an effort to survive, the parties will use their sources of power to
achieve their goals. If parties to labour relations in South Africa do not agree with one another, the LRA
provides structures and processes which the parties can use to resolve conflict and disputes (as discussed
in Lessons 06, 07 and 08). The following table depicts the open-systems framework.

1.5.4 The social reform theory

The theory of social reform is at odds with the theory of a free-market economy. Social reformers see the
free-market system as the cause of poverty and labour exploitation. They view capitalists as driven to make
profits and accumulate more capital. According to the theory of social reform, trade unions are important
vehicles for collective bargaining. Social reformers advocate that legislation should be implemented to
protect men, women and children against exploitation in the labour market in order to eliminate the effects
of a free-market economy or a capitalist society, such as workers living in slums, working under dangerous
conditions, or working long hours. They promote women’s rights, the right to education and religion, and
the right to fair wages in order to bring about social and humanitarian changes. They focus on bringing
balance or equity in society by advocating mechanisms to assist in addressing inequity, for example by
encouraging employees to join trade unions so that they can defend their socio-economic needs and
protect their rights in the workplace.

1.5.5 Socialism/Communism

A socialist or communist society is characterised by social ownership of the means of production, state
ownership and co-operative management of the economy. It promotes citizens’ ownership of equity for the
production of goods and services in order to directly satisfy economic demand and people’s needs. Goods
and services are valued for their utility instead of to accumulate capital and generate profits. A communist
or socialist society is characterised by the collective ownership of property and the organisation of labour
for the common good of all the people in the society. It has a system of government where the state plans
and controls the economy and the ruling party holds power in an effort to reach a higher social order where
all the people in the country receive an equal share of the benefits derived from labour. This system
requires that all the means of production be controlled by the state, which means that no one should own a
business or produce his or her own goods. This system is designed to enable the poor to attain financial
and social status equal to that of the middle class. In order for all people to achieve equality, wealth is
redistributed equally so that members of the upper class are brought down to the same financial and social
level as the middle class.

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1.5.6 Institutionalism

Adherents of the theory of institutionalism believe that in order to redress the imbalance in the bargaining
powers of employers and employees, employees must be protected with regard to the terms and
conditions of their employment, their health and safety, and their right to belong to a trade union. They
acknowledge that conflict exists between employees and their employers because these two parties have
different objectives. To resolve this conflict, the differences between the parties have to be accommodated.
Management responds by introducing new concepts, such as scientific management and investigations of
work group behaviour.

Apply your understanding of the theories of labour relations.

Activity 1.5: Theories of labour relations.

This is an individual written activity.
Time required to actively engage with the activity: 5 minutes.
Identify the relevant labour relations theory highlighted in each scenario

Scenarios Theories
As employees, we need to see trade unions as essential vehicles for f i g h t i n g
s o c i a l a n d e c o n o m i c i n j u s t i c e . T h u s , legislation should be implemented to
protect our men, women and children from l a b o u r exploitation caused by
capitalism.

Prosperity is our main ultimate goal. Thus, we should not interfere with the forces of
demand and supply in the labour market. Rather, we should focus on making profits
and accumulate more wealth for businesses and ourselves
We need to bring about equity in society and in the workplace. To do so, employees
should join trade unions as mechanisms for defending their socioeconomic interests
and protecting their employment rights
For the common good of society, no individuals should own factories. All resources
and capital are governed and owned by the state so that we all benefit equally
In order to implement appropriate business strategies to achieve organisational
goals, we must constantly monitor micro-environmental and macro-environmental
factors, and assess their impact on labour relations

Feedback to activity 1.5

Refer to theories of labour relations.

x Scenario 1 is an example of the Marxist theory. According to this theory, inequalities of power and
economic wealth are rooted in the capitalist economic system. Marxists view trade unions as
important vehicles for collective bargaining and advocate that legislation m u s t be implemented to

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protect men, women and children from exploitation in the workplace. The theory is aimed at
eliminating the effects of a free-market economy or a capitalist society, such as poor living and
working conditions for workers.
x Scenario 2 is an example of the free-market theory. This theory states that society is driven by the
need to make profits and accumulate more wealth (thus a capitalist society). Labour is regarded as a
natural commodity that is subject to market forces, in other words, to the laws of supply and demand
in the labour market. Intervention by the state is not encouraged. A capitalist society is characterised
by an economic and political system where the country's trade and industry are controlled by private
owners for profit, rather than by the state. It includes private enterprise, the privatisation of industries
and a free-market economy.
x Scenario 3 is an example of the theory of social reform and the theory of institutionalism. The theory
of social reform is at odds with the theory of a free market economy. Social reformers view the free-
market system as the cause of poverty and labour exploitation. They see capitalists as driven to make
profits and accumulate more capital. They focus on bringing balance or equity in society by
advocating mechanisms for addressing inequity in a society, such as encouraging employees to join
trade unions so that they can defend their socio-economic needs and protect their rights in the
workplace. Adherents of the theory of institutionalism believe that in order to redress the imbalance in
the bargaining powers of employers and employees, employees must be protected with regard to the
terms and conditions of their employment, their health and safety, and their right to belong to a trade
union. They acknowledge that conflict exists between employees and their employers because these
two parties have different objectives. To resolve this conflict, the differences between the parties have
to be accommodated. Management responds by introducing new concepts, such as scientific
management and investigations of work group behaviour.
x Scenario 4 is an example of a socialist or communist society. This theory is characterised by social
ownership of the means of production, state ownership, co-operative management of the economy,
citizens’ ownership of equity (or any combination of these) in order to produce goods and services to
directly satisfy economic demand and peoples’ needs. Goods and services are valued for their utility
instead of for the accumulation of capital and production of profits.
x Scenario 5 is an example of the open-systems framework/theory. This theory traces the linkages
between the environmental factors that impact labour relations role-players and their goals and power
bases, as well as the structures and procedures that have been developed to institutionalise and
control conflict. It indicates how micro-environmental and macro-environmental factors influence
labour relations.

In the following section, we discuss perspectives on labour relations which influence the management of
labour relations in organisations.

1.6 PERSPECTIVES ON LABOUR RELATIONS

Perspectives on labour relations are angles from which parties to labour relations view labour relations. The
following perspectives on labour relations show how management may perceive managing organisations in
order to achieve organisational results (Bendix 2015).

1.6.1 Unitarism

Unitarism refers to an organisation that cannot accommodate an opposition group. According to this
perspective, management regards trade unions as destructive forces and discourages employees from
exercising their right to freedom of association by joining a trade union. Trade unions are perceived to be
unnecessary and viewed as promoting distrust and destruction in the workplace, thus they should be

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avoided. Decision-making is seen as a managerial prerogative. Management regards collective bargaining

as interference with market forces and wants strikers to be dismissed. Suppressing and opposing trade
union affiliations and substituting collective bargaining with workplace structures are some of the strategies
employers may use when they apply this perspective in the workplace. Unitarism does not promote a
supportive management style, nor does it encourage job satisfaction among employees.

The characteristics of unitarism include the following:

x Some employers may favour the autocratic unitarism approach, according to which, power and total
control are in the hands of the owner or management.
x There is no room for opposition groups or factions in the workplace.
x Countries where the state/government makes unilateral decisions often use the labour relations
perspective of unitarism.
x The power of employees is weak and trade unionism is poorly established.
x Employees are not consulted about matters that affect their socioeconomic interests.
x Trade unions are seen as influencing employees and turning employees against the government.
x The controlling ‘‘boss’’ role is perceived as legitimate, and management has a right to unilaterally
control and make all decisions without consulting or negotiating with employees.
x Employees are expected to be committed and loyal to the organisation and its leaders.
x Conflict is perceived as unnatural and dysfunctional.
x Conflict is seen as an outcome of a breakdown in communication or the result of the work of protesters.
x Trade unions are seen as intruders that create confusion among rather satisfied employees,
encouraging them to make unreasonable demands and to strike when these demands are not met.

1.6.2 Pluralism

Pluralists recognise that employers and employees have conflicting goals and values, but are nevertheless
interdependent. This perspective is commonly used in organisations when the employer acknowledges that
trade unions are vital links of communication between the workforce and management. The employer does
not regard trade unions as enemies and destructive to the business. The parties to labour relations view
conflict as a natural occurrence that should be managed by means of appropriate structures and
procedures.

The economy is market driven, with the state aspiring to balance the power between trade unions and
employers. Therefore, trade unions are regarded as necessary in order to channel conflict, and represent
employees’ interests through processes such as consultations, negotiations and collective bargaining.
Because the employer has more power than individual employees, strikes are used as a legitimate form
of power testing between employees and employers, which should be exercised within a framework of rules
as prescribed by the LRA.

The characteristics of pluralism include the following:

x Liberal pluralism, in broad political terms, accepts that society comprises diverse competing interest
groups and extends to each of these the right to free association and to further the interests of their
constituents by any legitimate means.
x Conflict is accepted as natural and a fundamental part of the relationship between the employer and
employee. Both parties have a common interest (the survival of the organisation) and this makes
compromise necessary and possible.

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x Trade unions and employers’ organisations are regarded as legitimate and functional structures
whereby workers and employers protect and further their interests within the framework of rules
provided by the state.
x Collective bargaining is regarded as a generally decentralised, dynamic and democratic process for
expressing and controlling conflict.
x Employees have a right to strike and employers have a right to lock out. This is seen as conducive to
maintaining some balance of power between the parties.
x Pluralism does not imply that an equal power balance must exist or that every conflict can be settled by
compromise. Compromise may not always be possible and, at times, there will be a winner and a loser.

1.6.3 Societal corporatism

Societal corporatism is an extension of pluralism. It refers to joint decision-making by the three main
parties in labour relations: (1) employees and trade unions, (2) employers and employers’ organisations,
and (3) the state. Societal corporatism refers more to the way that the state incorporates the views of trade
unions and organised labour or businesses. Hence, it is sometimes called tripartite cooperation since it
involves social dialogue between at least the three main parties in labour relations. While pluralism implies
competition between groups, societal corporatism emphasises social dialogue and cooperation between
previously competing groups together with state involvement. Public policies and procedures that support
societal corporative institutions arise from negotiations between the government and a few powerful
interested groups. In societal corporatism, the employer consults with members of society, the government,
employees and employers in order to implement strategies such as creating jobs, curbing unemployment
and reducing poverty with a view to encouraging socio-economic development.

Societal corporatism may not be fully used in South Africa because:

x self-serving authoritarians are involved in corruption

x the country is still in the infancy of becoming fully democratised and does not have the wealth base of
developed economies
x conditions in the country are not yet fully conducive to the stronger forms of societal corporatism of the
Western European model based on peak organisations of trade unions and employers, as the union
movement is still divided into different federations and employers’ organisations remain divided due to
old apartheid divisions

The characteristics of societal corporatism include the following:

x Conflict is regarded as natural in an employment relationship and it is best managed through centralised
negotiations between a strong trade union and an employers’ organisation, together with the state.
x Relationships between the state, employers and labour are institutionalised in a tripartite structure and a
strong interdependence among all the parties is acknowledged.
x Consensus building, as opposed to adversarial relations, is valued.
x Centralised negotiations on basic issues, such as wages and working conditions, remove the potential
for destructive conflict in the workplace.
x Societal corporatism is perceived to produce a less strike-prone society.
x The parties may reach agreements that not only satisfy the immediate needs of their own constituents,
but frequently also take into account the needs of society at large.
x Short-term gains that benefit a few are sacrificed in favour of long-term economic outcomes that are
more beneficial to the industry and/or society as a whole.

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x The leaders’ role is to take their members with them after deals have been struck with other power
brokers, rather than to present their members’ views before decisions are reached.

1.6.4 The radical or Marxist perspective

Refer to Section 1.5.1 on the Marxist theory.

1.6.5 State corporatism

This is when there is strong intervention by the state in the economy in order to protect its own interests. In
countries with state corporatism, the state is the main source of employment. Therefore, employers in the
private sector may be dependent on the patronage/support of the state. As such, private-sector employers
may be expected to subordinate their own interests to the common good in order to promote state
corporatism.

Assess your understanding of the perspectives on labour relations.

Activity 1.6: Perspectives on labour relations. This is an individual written activity.

Time required to actively engage with the activity: 5 minutes.
After studying section1.6 on the perspectives of labour relations, identify and discuss the perspective on
labour relations in the scenarios below, as reflected by Tom, Grant and Sipho respectively.

Conflict in the workplace

Owing to conflict about trade unions in the workplace that had occurred between employees and
management, three managers have a meeting to take a strategic decision about how they want to
manage employment relations in their organisation.

Tom starts the meeting by stating: “After the events earlier this week, I realised that our ever-changing
and highly complex society requires us to study a phenomenon like employment relations with an open
mind since it can be influenced by our own perspective or worldview. As management, we should come
to a joint decision on how we will manage our employment relations.” He continues: “Although there is
conflict between the different groups in the organisation, we are also somewhat dependent on each
other. I personally feel that our employees’ values, interests and diversity should also be taken into
consideration, since it is our responsibility as management to ensure that the organisation is profitable,
efficient and productive.”

Grant is furious and responds: “No, to manage is not our responsibility but our right. We have legitimate
authority and employees should be loyal to the organisation and us. The conflict that occurred earlier
was probably just a misunderstanding because, in general, we all work together in harmony. We should
be able to manage it ourselves.”

Sipho interrupts: “It is because the workers feel oppressed that they asked for this. Just look at the
differences between what they have and what management has. It remains a class struggle. I feel for the
poor workers and think they should have much more control in the business!” Sipho is of the view that all

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role-players, organised business, organised labour and the state have to play a role in the formulation of
labour policy in South Africa. He believes that all the parties’ views should be heard and taken into
account. He emphasises that this does not mean that they want to do away with trade unions; trade
unions should remain an important part of society, and need strong and independent leadership.

Feedback to activity 1.6

Refer to perspectives on labour relations.
Your discussion should focus on the following:
x Grant – Unitarism perspective
x Tom – Pluralism perspectives
x Sipho – Societal corporatism perspectives

You should now understand the major theories and perspectives that influence labour relations. In the
following section, we discuss environmental factors that influence labour relations.

1.7 MACRO-ENVIRONMENTAL (EXTERNAL) AND MICRO-ENVIRONMENTAL

(INTERNAL) FACTORS INFLUENCING LABOUR RELATIONS

Employees and management cannot operate in isolation from the business environment. Factors in the
business environment influence the management of labour relations in organisations. Thus, labour
relations form part of the subsystem of the broader society which is influenced by both internal and external
environmental factors. As the parties in labour relations are part of a larger system, the balance of power
between them is in a constant state of flux, which means that the balance of power is not stable but
constantly changes, as it is affected by a variety of factors inside and outside the organisation
(Swanepoel, & Slabbert 2012).

1.7.1 Macro-environmental factors

These are uncontrollable factors that influence decision-making and affect the organisation’s performance
and the implementation of its business strategies. The parties exercise their strategic choices within labour
relations processes to respond to and interact with these environmental influences. External factors affect
labour relations and how organisations do business. For organisations to survive in the long run, they must
be able to deal with environmental factors. Macro-environmental influences are economic, political, legal
and social factors that impact on the needs, goals, expectations and power of employers, employees and
trade unions. These are external factors over which the organisation has no or little control; they are
therefore mostly beyond the control of employers, employees and trade unions.

The table below contains examples of some of the external environmental factors that may affect labour
relations.

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Table 1.2: External environmental factors influencing labour relations

EXTERNAL ENVIRONMENTAL INFLUENCES/MACRO-ENVIRONMENTAL FACTORS

Economic factors Political factors Legal factors Social factors
x Technology x Political parties x Constitution and x Demography
x Globalisation x Political alliances Bill of Rights x Urbanisation
x Economic growth x Ideologies x International x Housing/Hostels
x Unemployment x Socioeconomic conventions x Transport
x Poverty policies x Labour law x Health
x High inflation rate x International x Education
x Low interest rate relations x Training
x Productivity x Gender issues
x Race issues
x Media
x Cultural values
x Poverty

Source: Finnemore & Joubert (2013:22)

Economic factors may lead management to aspire to higher profits and to develop businesses. This may
be contrary to employees’ demands for higher income. In this situation, each party wants more from the
other party, even though the organisation has limited resources. An increase in inflation erodes the
purchasing power of employees, who struggle to afford basic necessities such as food, school fees,
housing and medication. This results in employees demanding salary increases from their employers.
Resistance from employers to meeting the demands of employees may lead to employees demonstrating
their collective power by embarking on a strike action. A high inflation rate may therefore trigger
employees’ demands for a wage/salary increase so that they can maintain a good standard of living. As a
result, the inflation rate may influence wage/salary negotiation. The longer trade union representatives and
management take to negotiate wage/salary increases, the more likely it is that the organisation will suffer
financial losses due to strike action.

Social factors, such as HIV/Aids and also COVID-19 as we saw it in 2020 and for some years therafter,
have an impact on the economy, workplace and productivity. The cost of training employees increases as
skilled and professional employees die because of HIV/Aids or COVID-19. Higher recruitment and skills
development costs to replace employees lost due to Aids increase the cost of production. The effect of
Aids on medical costs, health services and insurance costs is increasing. Some employers have made
antiretroviral (ARV) treatment/therapy available to employees in order to improve the health and lifespan of
employees and lessen the negative impact of HIV/Aids on their productivity. To combat the effect of
HIV/Aids, the government published the Code of Good Practice on HIV/Aids, which must be adopted in all
workplaces to ensure that employees affected by HIV/Aids are not unfairly discriminated against in the
workplace. This may result in organisations expanding their social responsibility programmes and
corporate social investment. Due to the syndrome, investment in the education of young people is lost
before they become economically active. The virus weakens organisations’ ability to transfer skills and
knowledge from one generation to the next. It also puts a strain on the limited health care resources and
causes an increase in absenteeism in the workplace. HIV/Aids costs companies a lot of money in terms of
sick, family responsibility and special leave. It results in a reduction in human capital as skilled workers are
lost to the disease. Employers have to make increased contributions to employees’ insurance life cover,
disability cover and medical aid costs. Thus, benefits such as medical aid, pension funds and group life

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insurance are increasingly important in retaining employees in organisations. A healthy employee is more
likely to be a productive employee than is an employee who has ill health.

Stress in the workplace affects the mental state of employees. A stressed employee cannot think and
function properly, and is more likely to make a lot of mistakes. This affects his or her level of performance,
which will gradually decrease. Unemployment, poverty, crime and other negative social factors may also
give rise to stress, which necessitates organisations to implement employee assistance programmes
(EAPs) to help employees deal better with problems they experience at work and/or in the community.
EAPs are needed to help employees have work–life balance.

Political factors influence labour relations. To create jobs and bring about changes to employment, the
state may apply labour market policies to regulate the labour market by implementing interventions to
prevent and resolve labour market problems such as unemployment, labour market rigidity and
monopolies. Trade unions can influence remuneration levels in the labour market. In South Africa,
collective bargaining plays a significant role in determining salaries and wages. In a unionised environment,
salaries/wages are set by both the trade union and the employer – not by the employer alone. Trade
unions attempt to bargain for wages that are in line with the inflation rate so that there is a real wage
increase, which is the amount by which the wage has increased after taking the inflation rate into account.
The current unemployment rate in South Africa is worrisome and is indeed a ticking time bomb waiting to
explode.

Legal factors, such as labour law, affect labour relations and impact the employment relationship between
the employer and the employee. There is an argument that strict labour laws cause employers to employ
fewer employees. For example, the LRA sets out the duties of the employer and employee. Disciplinary
action has to adhere to procedural fairness (must follow the right procedure as guided by the LRA) and
substantive fairness (the reasons for the discipline must be fair, valid and consistently applied). The Skills
Development Levies Act 9 of 1999 is aimed at encouraging employers to train the workforce. The Basic
Conditions of Employment Act makes provision for terms and conditions of employment, such as hours of
work and minimum wages. Failure to adhere to labour laws may lead to companies exploiting employees
and losing skilled, scarce and critical human resources to competitors that offer better terms and conditions
of employment and/or remuneration packages.

Competition, globalisation and technology have changed the way businesses are run. Employers want
employees to be productive and flexible, while employees want job security. Robots and automated
processes have replaced repetitive and hazardous work, and blue-collar employees have become
redundant or require training. Globalisation and the increasingly competitive business environment have
led to technological developments, with which organisations must keep abreast. The following are some of
the advantages and disadvantages of doing business in a global market:

New technology results in a process of transformation in the spatial organisation of social relations and
transactions, generating rapid transcontinental and interregional flows of information, people and goods
and establishing networks of activity. This has resulted in greater opportunities due to more readily
accessible technology for the mobility of people, ideas and information, and goods and services
throughout the world. Technology has transformed how people interact and how organisations operate.
The time and space of social relations and transactions have been reduced drastically. Through the use
of technology, people can interact in a short time and business deals are done across the globe, reducing
both travelling time and the amount of office space required.

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1.7.2 Micro-environmental factors

Micro-environmental influences are internal factors that have a direct impact on the organisation and that
the organisation can control. The table below contains examples of micro-environmental (internal) factors
that affect labour relations positively or negatively.

Table 1.3: Environmental factors influencing labour relations

INTERNAL ENVIRONMENTAL INFLUENCES/MICRO-ENVIRONMENTAL FACTORS

x Leadership x Occupational health
x Organisational policies and procedures x Occupational safety
x Organisational systems and processes x Cultural diversity
x Employee value propositions x Organisational structure
x Employee behaviour x Organisational values
x Employee capabilities x Organisational politics
x Employee engagement x Span of control
x Management practices and style
x Work climate

These factors are more likely to influence employee performance and, consequently, the organisation’s
performance. The above discussion of micro-environmental factors that influence labour relations can be
summarised as follows: To compete in today’s business environment, a well-educated and trained
workforce is needed. New technological advances are less likely to result in retraining employees as new
robots and automated processes have replaced monotonous, dangerous work. However, old skills become
redundant, few employees are required to achieve the same output and a more educated but smaller
workforce is needed. This may result in job insecurity among employees. Blue-collar employees became
redundant, requiring employees to be retrained and multi-skilled as teams of multi-skilled employees are
required rather than long lines of semi-skilled employees. Flexible production systems have changed how
machines and equipment operate. Technological advances and developments enable organisations to
streamline their production processes to achieve flexibility and produce quality products and services in
cost-effective, just-in-time volumes to meet customer needs. This results in new and better quality products
and services, increased productivity and more efficient use of limited resources.

Management should instil a culture of open communication with all levels of employees and treat all
employees with respect and dignity. Employees should feel free to walk into their reporting line manager’s
office without fear of intimidation.

Employers should create an environment in which employees can influence decisions that affect their work.
Employee participation should be used to allow employees to contribute to the success of the organisation.
Employees’ beliefs and values may influence how they behave at work and how they view their work.
Similarly, organisational culture is likely to influence management styles and how tasks are performed in
the workplace. Hence, the workplace environment should be healthy to avoid departments maximising their
own profits at the expense of other departments or the whole organisation.

Activity 1.7: Environmental factors influencing labour relations.

Time required to actively engage with the activity: 30 minutes.

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Watch the following videos:

Macro- environmental factors Micro-environmental factors

https://www.youtube.com/watch?v=v7pUv_ZWnyM https://www.youtube.com/watch?v=qHGA6xmuhEQ

https://www.youtube.com/watch?v=H8_W8tAEsfQ https://www.youtube.com/watch?v=GmLrbJP1QzA

Categorise the factors according to micro-environmental and macro-environmental factors using the table
below.

Macro-external environmental factors Micro-internal environmental factors

Feedack to activity 1.6

Refer to the sections regarding macro-external environmental factors and micro-internal environmental
factors.

1.8 THE DEVELOPMENT OF LABOUR RELATIONS IN SOUTH AFRICA

The last section of this lesson is about the history and development of labour relations in South Africa. It
is essential that you read and are aware of the history and development of labour relations i n South
Africa. Prior to the Industrial Revolution, which we discussed earlier, the relationship between employers
and employees was that of master and servant. Employees were treated as and considered a
commodity which could be easily bought and sold or replaced. Working conditions and wages were
poor, and employees were exploited by employers. Because of the imbalance in the power of the
parties in the employment relationship, employees began to unite by forming trade unions in order to
fight the injustices caused by employers. For years, inequality and injustice in the workplace resulted in
labour unrest. As economic, social, political and technological changes happen around us and in
organisations, so does the field of labour relations change and develop over time. It is for this reason
that you are required to do research on the historical development of labour relations in South Africa.

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Activity 1.8: The development of labour relations in South Africa. Complete this activity on the
Discussion tool on myUnisa. Time required to actively engage with the activity: 15 minutes.

Visit the website of the Labour Guide at https://www.labourguide.co.za/ and the Unisa online library to
read labour law and labour relations textbooks, as well as articles in accredited journals about the
history and development of labour relations in South Africa. Continue by doing a search on the history
and development of labour relations in South Africa from 2005 to today. Draw a summary of the timeline
and share it with your fellow students on the discussion forum.

Feedback to activity 1.8

Refer to any relevant labour relations textbook and accredited journals available on the Unisa online
library.

1.9 SUMMARY
The field of labour relations has evolved over the years. The three main parties in labour relations have a
tripartite employment relationship, which is influenced by both macro-environmental (external) and micro-
environmental (internal) factors. The theories of and perspectives on labour relations also influence the
management of labour relations in organisations. Thus, it is vital that organisations apply appropriate
theories and perspectives on labour relations to help them establish sound labour relations in the
workplace.

1.10 SELF-ASSESSMENT
Time required to actively engage with the Self-assessment questions: 30 minutes

After you have completed this lesson, you have to determine whether you have achieved the relevant
learning outcomes stated at the beginning of the learning unit. Therefore, please read these learning
outcomes again before you attempt to answer the self-assessment questions.

It is vital to understand the relationship between the parties in labour relations. Discuss the nature of the
employment relationship between employers and employees. (5)

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Question 1
(3)

Scenario 1
Company A embraces strong values of cohesion. It sees trade unions as outsiders who disrupt the
peace and harmony of the organisation and who should not be allowed to enter the workplace.
Scenario 2
Company B consults with employees and their trade unions on matters of mutual interest in order to
make the best decisions for the organisation. This encourages employees to voice their concerns so that
they can work together to achieve the goals of the organisation.

Identify and discuss the labour relations perspectives practised in Scenario 1 (5 marks) and Scenario 2
(5 marks). (10)

Question 2

Discuss the Marxist theory, free-market theory and Dunlop’s systems theory (2 marks each). (6)

Question 3

Define macro-environmental and micro-environmental factors (2 marks each). Identify (1 mark each) and
discuss (2 marks each) any four macro-environmental and micro-environmental factors in terms of how
they affect labour relations. (20)

REFERENCES

Bendeman, H. 2003. Understanding conflict in labour dispute resolution. South African Journal of Labour
Relations 27(1):81–102.

Bendix, S. 2015. Labour relations: A Southern African perspective. 6th edition. Pretoria: Juta.

Finnemore, M & Joubert, Y. 2013. Introduction to labour relations in South Africa. 11th edition. Durban:
LexisNexis Butterworths.

Ivancevich, J.M and Matteson, M.T. (2002). Organisational behaviour and Management. 6th edition.
McGraw-Hill: New York
Swanepoel, BJ & Slabbert, JA. 2012. Introducing labour relations management in South Africa: Adding
value to Africa. Durban: LexisNexis.

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