Labour laws ‘not that rigid’

By PHUMZA MACANDA

Business Correspondent

SOUTH Africa’s labour laws are not as constrictive as the country’s larger firms have been implying, a study by the United Nations Development Programme (UNDP) released yesterday has revealed.

According to the study, only 30% of South African companies have been affected by “labour inflexibility”, said co-author of the report Robert Pollin.

“We’re not saying that labour market rigidities have had no effect at all but we are saying that about 70% of businesses say that labour laws have not affected their decisions at all. They’ve had minimal
effect,” said Pollin.

The study’s findings are contrary to widespread criticism that the country’s rigid labour laws are making it difficult for companies to hire and fire workers.

The criticism led to calls for government to consider reforming some aspects of the laws. Government met with labour
representatives and the private sector at two round table discussions in May and June to discuss the reforms but both meetings ended in disagreement.

According to workplace dispute settlement company Tokiso, South Africa’s
labour laws are not an obstacle to creating employment.

Tokiso CEO Tanya Venter said while “some restrictions could certainly be
relaxed” it was not as hard to hire and fire as was generally believed in the country.

The UNDP report also noted that South Africa’s target to halve unemployment by 2014 was unrealistic under the current situation. Even if the country’s economic growth was to continue at the pace seen in the first decade of democracy, the official unemployment rate would not fall at all by 2014 it said.

“To halve unemployment by 2014 business must grow at a significantly faster rate and that growth must be focused more on hiring people and less on buying new machines,” said Pollin.

Co-author of the report Léonce Ndikumana said South Africa needed to focus more on creating employment for its
unskilled poor people, especially in the agriculture sector.

He said government’s expanded
R4-billion a year public works programme — where government uses people to build infrastructure such as roads — was a good start but it was too small an investment to make a huge impact. It only created 80000 new jobs a year, and “would not affect unemployment at all,” he said.