The advent of the Relations Act 66 of 1995 (LRA) raised expectations about the fundamental change in the nature of South African labour relations and of effective dispute resolution and collective bargaining in particular.
For many observers, the replacement of the Industrial Court by the CCMA signaled a shift from a highly adversarial model of relations to one based on promoting greater co-operation, industrial peace and social justice. The apparent shift seems all the more plausible as an unfolding democratisation process intersects with the challenges of a highly competitive globalised economy, new forms of work organisation and participative decision making.
In South Africa the mechanisms offered for dispute resolution in the previous LRA, namely: Conciliation Boards and the Industrial Court lacked credibility with the State's social partners, organised business and organised labour and resulted in a very low settlement rate of disputes.
The explanatory memorandum released with the draft bill of the LRA highlighted that the previous dispute resolution processes resulted in only 20% of disputes being settled. The failure of the statutory structure to resolve those disputes effectively resulted in an excessively high workload for the Industrial Court and the unnecessarily high incidence of strikes and lockouts. More specifically, the old legislature attempted to provide a basis for relations among its citizens. However, in certain circumstances, the laws themselves impeded the promotion of good relations.
Since its inception, the CCMA has enjoyed a national settlement rate of 70% and greater - a clear signal that the CCMA is committed to restoring sound labour and industrial relations within the South African economy.
The new labour legislative environment anticipates, as well as encourages, a paradigm shift away from the old adversarial model which was characterised by high levels of conflict, union repression, discrimination, cheap labour and authoritarian managerial styles. Because of its relative informality and the greater variety of approaches and solutions which may be adopted, those groups who may be considered ill-served by the old legislature often regard the new dispensation as especially suitable for use. The premise being that it is a more co-operative model based on collective bargaining, greater participation, organisational rights, effective resolution of conflict and higher levels of co-operation resulting in greater flexibility and improved productivity outcomes.