1.             Background to the Social Plan

The Department of Labour tabled a proposal for a Social Plan to the trade and industry and labour market chambers of the National Education and Labour Council (Nedlac) in October 1995. A task team comprising delegates from these chambers was established.

The major task of this team was to develop a framework for a social plan that would prevent job losses where possible or ameliorate the effects of retrenchment on individuals and local economies in the event of large-scale retrenchments.

The Declaration of the Presidential Jobs Summit in October 1998 was the direct result of an agreement reached by the delegates. It outlines a Social Plan that aims to prevent job losses or a decline in employment where possible and seeks to manage retrenchment and reduce its effects on individuals and local economies.

2.             Principles of the Social Plan

          According to the agreement that was reached, the following principles should apply:

• The Social Plan applies in the event of threatening large-scale retrenchments (500 people or 10% of the labour force of an organisation), as such retrenchment could have an impact on sector, regional or national interests.
• The Social Plan firstly aims to prevent job losses and a decline in employment. As such it promotes negotiations about threats to employment security and potential measures to prevent a decline in employment.
• The Social Plan aims to ameliorate the social and economic impact on individuals, regions and the economy.

          A social plan approach is vital when there is a reasonable possibility of developing alternatives that could save jobs.

3.             Three phases of the Social Plan

          The Social Plan makes provision for three phases of dealing with retrenchment. Mechanisms were put in place under each of these three phases to assist employers, workers and the government to deal with retrenchment. The three phases and their mechanisms are described below.

Phase 1: Preventing job losses

Services offered by the Social Plan’s Technical Support Facility under the auspices of Productivity SA:

·         Future Forums

·         Ministerial notification

·         Technical support

Phase 2: Managing retrenchment

Services rendered by the Department of Labour:

·         Counselling

·         Placement

·         Unemployment Insurance Fund

·         Labour relations

Phase 3: Job creation

Services rendered by the Department of Provincial and Local Government:

Stimulate job creation for provincial and local authorities

The mechanisms to assist employers with the retrenchment process are discussed in the next section.