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in Grade 12 by Master (866k points) | 18.5k views

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Impact of LRA on businesses.


  • LRA provides for the principles of collective bargaining and puts structures in place with which disputes in the workplace can be settled.
  • Promotes a healthy relationship between the employer and employees.
  • Provides specific guidelines for employers on correct and fair disciplinary procedures.
  • Employers and employees have guidelines regarding correct and fair dismissal procedures.
  • Provides mechanisms such as statutory councils/collective bargaining/ CCMA.
  • Labour disputes are settled quicker and are less expensive.
  • Provides protection for employers who embark on lawful lock-outs.
  • Employers are entitled to compensation from the Labour Court if they suffered damages as a result of unprotected strikes.
  • Workplace forums can add value to businesses if it functions properly.


  • Employers may have to disclose information about workplace issues to union representatives that could be the core of their competitive advantage.
  • Employers may not dismiss employees at will, as procedures have to be followed.
  • Some businesses may feel that the LRA gives employees too much power as it creates lengthy procedures, e.g. consulting with workplace forums.
  • Employers may not get a court interdict to stop a strike.
  • Strike actions always result in loss of production for which employers may  not claim.
  • Some trade unions may not promote the mandate of their members but embark on industrial action, which is harmful to labour relations between employers and employees.
  • Many employees and employers do not understand/respect the Labour Relations Act.
  • Labour disputes and bargaining council processes become disruptive/time-consuming and can lead to a decrease in productivity in businesses.
  • Many employees take advantage of the right to strike without acknowledging their responsibilities. 
by Master (866k points)
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