President Cyril Ramaphosa on Wednesday evening announced his new Cabinet and apart from indicating that certain departments would be merged, he also mentioned that the Department of Labour would be expanded to focus on employment. It will now be known as the department of Labour and Employment.
Ramaphosa explained that the change will demonstrate that government is serious about creating jobs. “In the case of labour, we have decided to add employment – to demonstrate our country is on a journey to create jobs,” Ramaphosa said at the time.
What’s in a name?
But what does this mean for the Department of Labour? Economists aren’t quite sure and while new Labour Minister Thulas Nxesi is yet to outline the way forward, many expect that the change in name means that government will start to play a far more active role in job creation rather than only focusing on policy.
“It remains a mystery of what government will do,” economist Lumkile Mondi told Fin24.
The biggest challenge facing SA is unemployment, he explained.
SA’s official unemployment rate is at 27.1%. Mondi expects the Labour department to play a more active role in employment creation. The department’s previous role was mostly in terms of lawmaking where it was involved in shaping the Labour Relations Act and Employment Equity policies.
Mondi, however said, his view was that government’s role should not be to create jobs necessarily, but rather to create an “enabling environment” for businesses to thrive, so that they can create jobs.
Labour analyst Mamokgethi Molopyane also said government should not be driving job creation.
‘Engaging the workforce’
“What government must do is put in place polices that create an enabling environment for the private sector to create employment,” Molopyane said.
It will now be up to Nxesi to provide more clarity on how the department will change, she said. Molopyane suggested that the department might introduce a division solely focused on employment.
“Historically, the Labour department has had input in laws and policies,” Molopyane said. This change could mean that the department will now be active in engaging with the workforce. “It all depends on what the new minister will bring to the table.”
Economist Xhanti Payi suggested that the change will shift the Labour department from having a “monitoring” role to being an active participant in employment creation. The department has mainly focused on the enforcement of law, he explained.
Payi also commented that government might not be a “player” when it comes to job creation, but it is a “referee” to ensure that there is regulation and conditions that will indirectly result in job creation.
The presidency is yet to respond to Fin24’s request for comment on the department’s expanded mandate.