Literacy, in its most basic definition, is the ability to read and write, or the ability to use language for effective communication. However, UNESCO (the United Nations Educational, Scientific, and Cultural Organization), has extended the definition to the following:
"'Literacy' is the ability to identify, understand, interpret, create, communicate, compute and use printed and written materials associated with varying contexts. Literacy involves a continuum of learning to enable an individual to achieve his or her goals, to develop his or her knowledge and potential, and to participate fully in the wider society."
As you can see, the definition is broadened to mean the set of skills needed to participate in society. This is important to see because workplace literacy is defined similarly - the set of skills needed to participate in the workplace.
This could simply refer to language. For example, an electrician with workplace literacy will understand and be able to correctly use all of the terms associated with being an electrician - the jargon (circuit breakers, amps, bonding, etc.). Even a more commonplace job - such as retail cashier - will have specific language associated with the particular store and responsibilities.
Workplace literacy can also refer to skills, however. Mathematical skills and duties to be performed by employees are often lumped into the definition of workplace literacy. The broadest definition is as follows - all skills needed by an employee to successfully perform the duties of the job.