Is labour legislation harming employment?

[Dave A]

Personally I'm a bit of a cynic on our labour legislation - regard it as a stumbling block to employment creation that ultimately is hurting the state of employment in our country here rather than improving it. Any views on that?

[sterne.law@gmail.com]

Many employers bemoan the legislation, however it is the employers that exploit and blatantly disobey the laws that leads to much legislating. Unfortunately the employers organizations, which is the employers form of union, are not as proactive as unions in campaigning, which is a big part why we do not see changes or at least proposals being submitted. Thabo Mbeki was attempting to simplify, so to speak, with the view, quite correctly, that a productive workforce is essential to a thriving economy. This being said, the number of matters before the CCMA with reference to poor work performance, is very low and in light of the fact that EVERY employer moans about the poor work standards this is amazing. I think this is due to fear/ignorance of how the law operates with regards to this and also just as much, is employers and managers thinking "how wwill I be able to operate with 1 person short?" I always tell my clients, if you have a cabbage that is off - do you keep it or throw it away? They all answer taht they throw it away...need I complete the rest of the analogy.

[sterne.law@gmail.com]

Interestingly, due to the poor economy, far more employers are taking action against under performing employees, a further indicator that we dont want to upset the status quo.

[Dave A]

we dont want to upset the status quo.

That's the natural tendency, isn't it. The truth, though, is that business might not "contest" the legislation - they simply adapt. And that adaptation right now is casualisation, lower pay to compensate for the lack of performance and lost direct foreign investment.

[sterne.law@gmail.com]

Absolutely. I also run a restaurant consultancy, having come from a restaurant background. Almost every client I consulted to, I reduced staff, mainly to save wages but more importantly to increase productivity and performance by having people under a bit more pressure. Contrary to popular opinion, staff do not always enjoy standing around, they find it boring and cannot wait to get home, so keeping them active is a very worthwhile tool. Naturally I was often met with the comment, but we need all these staff. When the Sectoral agreement for Hospitality was introduced 3 years ago, it had a number of repurcussions for owners. The minimum wage was way above what most people were paying, waiters were no longer on commisiona nd SUnday pay became a reality for the indutry. The agreement threatened to increase wage bills by between 30-50% Suddenly management became capable, with guidance, to restructure their operations to limit these costs. It meant a bit more man management and instead of 2 shifts maybe 4 different shifts, but they did it and quickly. It was a perfect indication of how managers get into a comfort zone and just keep going through the motions. Going back to my previous post, re failure to action poor work performers, it is this same comfort zone that prevents us from shaking the tree.

[Dave A]

So in the end the sectoral determination in the hospitality industry ended up with less employment overall, although the staff that was left got better pay?

Good for the people with jobs, I suppose. But not much good for reducing unemployment. Do you think this is the result government wanted?

[sterne.law@gmail.com]

The big affect was waiters who traditionally earned commision. They probably became the biggest losers, as tips far exceed any wage agreement. But they now had less working time and therefore less customers to gain income from. I honestly do not know 1 waiter that was or is in favour of the agreement, from the wage point of view. The new agreement is busy being done, and with the current economy and our dear Eskoms plundering increases, restaurants are taking strain. if that agreement makes any steps similiar to the first, I would not be surprised to see 10-15% job losses.

[tec0]

Right, in all probability there is a lot of people working for little money, will be cheated once again because now the “big boss� don’t want to be seen with his pants down and breaking people with low cost back breaking labour thus, they will lose their jobs because the legislation will clamp down on the “big boss� and the “big boss� don’t like to lose so...

[Dave A]

...and the “big boss� don’t like to lose so...

Can't afford to, actually. Contrary to belief in some quarters, businesses do not print their own money. It has to come from somewhere - generally by operating the business in a manner where income exceeds expenses

There is no bottomless money pit.

[tec0]

As always there are two sides to every coin Dave. Yes you are right not every business owner is a millionaire and sometimes you do what is best. I totally agree with you. However, I can point at two wealthy companies and state “to date� and say that not 1 of their employees has a contract with the company but they are responsible for 80% of all mining vehicles to-date. The company income on the other hand is healthy and sustainable... So two sides to every coin yes...

[wynn]

My experience with the waiter and his wages scenario.

M&B coffee was R7.50 per bottomless cup, tip if waiter filled you promptly R2.50.

Enter the new law, coffee went up to R9.50 to compensate the waiters wages, 50c tip, waiter probably in the same financial position as before.

Coffee now R12.50 to compensate for annual waiters increase and to refurbish the owners coffers, no tip! because 2 coffees R15.00 and I need the R5.00 for the parking fee.

Oh and the cups have gotten smaller so need to be refilled more often, more work for the waiters.


As a small business SMME if they want me to hire!! they must let me fire!! without all the crap from dept labour and unions.
Otherwise I outsource, automate, import or subcontract.

[BBBEE_CompSpec]

I have to agree with you Sterne.Law - However, I feel that if we were more legislatively conscious of what we are and are not allowed to do then we'd be better off and more jobs can be created. Short term job creation can be more damaging than legislation. The government is guilty in this aspect. It promotes short term employment and increases poverty in the process.

For example: World Cup 2010

When the World Cup is over millions of people, who have placed themselves in a higher living standard, are going to be unemployed.

In order to keep your business afloat you need to organize it from the beginning. Do your maths, set up your flow charts and obey the law.

[BBBEE_CompSpec]

M&B Vincent. You can drink coffee there still? You don't need cake. Your plate is gold lined.Very few businessmen can afford to eat there let alone have coffee.

There is no reason why you cannot hire and fire who you want to. Just get to know the law and how to use it.

[sterne.law@gmail.com]

M&B Vincent. You can drink coffee there still? You don't need cake. Your plate is gold lined.Very few businessmen can afford to eat there let alone have coffee.

There is no reason why you cannot hire and fire who you want to. Just get to know the law and how to use it.

ABSOLUTELY - it is possible to dismiss anyone provided they are committing wrong and you follow the processes. Process need not be long, just there is a rule book and work within the rules. From an HR perspective the initial hiring process is something employers need to look at. Spend some time and money on initial hiring and the first 3 months of probation. Yes, we know many employees behav well in first 3 months and then act up, but just keep a more eager eye in those first 3 months. When you buy a car - do you not test drive it?

[Dave A]

ABSOLUTELY - it is possible to dismiss anyone provided they are committing wrong and you follow the processes. Process need not be long, just there is a rule book and work within the rules. From an HR perspective the initial hiring process is something employers need to look at. Spend some time and money on initial hiring and the first 3 months of probation.

That's fine for big companies with an HR department. For small business owners who's main skill is in what their business produces, this is a whole pile of non-core activity.