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Refereed articles

The Labour Relations Act and global competitiveness

The article addresses a theme that has become dominant in the discourse surrounding South Africa's labour legislation: is the labour market over-regulated? It starts by noting that the LRA was enacted at the very moment when South Africa's re-entry into the world economy exposed it to the global competition. The "orthodox view", the author observes, is that globalisation undermines the ability of nation states to regulate their own labour markets, resulting in a "race to the bottom".

Contrary to this, the author argues that nations can prosper in the global economy by building institutional advantages on a floor of human rights, and that rights-based regulation could give South Africa a comparative advantage in global trade and investment. Such advantage, it is stressed, is social as well as economic, and a rights-based system empowers citizens to resist the deleterious effects of globalisation. Labour rights can thus be reconciled with global competitiveness, provided they are used rationally to correct market failures and promote economic efficiency.

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