On November 11 1996, South Africa's new Labour Relations Act took effect. The Act, to a large extent, replaced the prior South African labour law framework. The primary focus of the Act is the regulation of relations between trade unions and employers. However, to a lesser extent, the Act also regulates important aspects of the relationship between employers and individual employees. The Act encompasses all sectors of the labour force, in contrast to the predecessor legislation which did not cover employees in the agricultural, domestic services or public sectors.
Among other things, the Act contains new rules regulating collective bargaining, strikes, employee dismissals and transfers of employment obligations. The Act also establishes important new institutions. These institutions include workplace forums, which are, in essence, committees of employees in a given workplace which provide employees with an institutionalized voice in certain aspects of managerial decision-making outside the collective bargaining process and the Commission for Conciliation, Mediation and Arbitration, which is a new independent agency set up to resolve labour disputes.
The Act is, of course, relevant to all foreign companies doing business in South Africa. Some of the provisions of the Act pertaining to workplace forums and transfers of employment obligations will also be relevant in connection with South African acquisitions by foreign companies.