South African labour regulators have it wrong. And if they don’t start changing their thinking, they are going to be the single biggest threat to job creation in South Africa.
I have had my crack at the various trade unions over the last few years, but this SAPA story and comments made by Labour Appeal Court Judge President Dunstan Mlambo, cannot go unchallenged.
Essentially Mlambo slates the use of labour brokers, fixed-term contracts as well as temporary and part-time work. He is also quoted as saying: “I’m afraid that the emerging entrepreneurs, especially those who were previously disadvantaged, need to be reined in. Otherwise, as history has shown, the poor will be ground into the dust under punishing labour conditions and declining wages, so that the captains of industry grow fatter.”
He goes on to say that South Africa faces the threat of an Arab Spring because of our unemployed population. Mlambo reportedly concludes: “Let us remember that in times (like this)… business cannot go on as usual, (or else) we will all suffer.”
Obviously these comments are being reported second-hand and I have to be careful about taking them out of context, but anybody who says South African entrepreneurs need to be “reined in”, probably needs their head checked.
Do yourself a favour and type in the phrase “job cuts” into any major search engine or news site. At Sony: 10 000 jobs, 1 400 at BNP Paribas, Deutsche Bank (1 900), UBS (3 500), Nokia (20 000)… the numbers are staggering.
Closer to home, the most recent Adcorp labour survey says we lost 31 789 in June and once you combine it with May you get near to 82 000 jobs lost. However, if you look at the “informal” sector, employment rose here again for the 12 consecutive month.
We can slate the informal economy and the “entrepreneurs” as much as we like, they are delivering the jobs when the formal economy isn’t.
Sure, entrepreneurs go through boom- and bust cycles and unfortunately there will be times when employees get burnt in the cycle. Consider this for a moment – Eastman Kodak employed 60 000 people in its home-town of Rochester in the late 1970s, with one in eight people employed in this business. In 2010 it was down to 18 000 globally and in 2012, we’re watching a business dying.
We should not underestimate the benefits a “quick” death over a slow and steady decline.
For the last couple of years I have interacted with different HR managers in various corporates and I find it morbid the way that employees and employers get involved in these costly and time-consuming legal tussles as they try to part ways.
Don’t get me wrong, I’m all for protecting contractual obligations but trying to eke out a small pound of flesh is a straight leach on the system and that time and effort could be spent far more productively.
Mr Mlambo, you can slate the “bakkie brigade” and tell us to “rein in” entrepreneurs but the numbers suggest otherwise. There are major structural issues in both the local and international markets and coupled with a low-growth future, the last thing you want to be doing is trying to enforce sheltered employment on businesses in any shape or form.