By Thandisizwe Mgudlwa
This is serious stuff.
And South African stakeholders, shareholders, sectors must stand and pay attention to what could further derail the process of creating jobs.
As mentioned so many times before and evidence elsewhere in the world confirms that job can go a long way in eradicating poverty and underdevelopment.
It is therefore paramount to all the groups concerned to listen and take actions from the warnings of John Botha.
This week Botha said: “It is becoming so onerous to employ in South Africa that business is opting for alternatives to direct employment – alternatives like outsourcing, sub-contracting, automation, off-shoring and new technology.
These were just a handful of the unintended consequences of the proposed changes to South Africa’s labour laws outlined by Botha who is director at Production Management Institute’s (PMI) in a briefing to business.
He said there was no motivation for employers to employ more staff than they needed because of statutory inflexibility, over-regulation and sanctions. “As a result, we are seeing and will continue to see companies increasingly focus on alternatives to direct employment relationships.”
Also, he predicts that companies would increase independent contracting relationships at the expense of direct employment. “This will be evidenced in outsourcing practices, sub-contracting, off-shoring, utilisation of temporary employment services and the like.”
Botha believes that the net effect of the Broad-Based-Black Economic Empowerment Codes was to drive outsourcing rather than direct employment, given the significant weighting on procurement and enterprise development, noted a report.
He added that the inconsistencies between some of the provisions of the labour bills – particularly the Employment Equity and Labour Relations Bill Amendments – were “astonishing”.
“The most significant example of such contradictions lies in the Labour Relations Bill, which limits equal pay for work of equal value to vulnerable persons. At the same time, the Employment Equity Bill proposes equal pay for all employees – from general workers to managing directors.”
Furthermore, Botha said many of the amendments effectively undermined some of the strategic national goals articulated in the National Development Plan, the New Growth Path and the National Skills Accord, all of which promoted job creation.
In addition, he maintains that the labour bills would have a profound impact on human capital practices and BBBEE credentials. “Human resources (HR) functions and departments are shrinking as employers strive to fulfil those functions without employing more people.”
He further explained: “Corporate HR was already heavily regulated by the BBBEE Act. Coupled with the revised labour bills, employers were simply avoiding liability completely and, instead, optimising business processes through strategic procurement, minimalistic employment, technology and mechanisation.
In conclusion: The changes to South Africa’s labour laws, proposed as far back as 2010, are currently before Parliament.