# Regulatory Compliance Category > Labour Relations and Legislation Forum >  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?

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## 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.

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## 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.

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## 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.

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## 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.

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## 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?

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## 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.

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## tec0

Right, in all probability there is a lot of people working for little money, will be cheated once again because now the âbig bossâ donâ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 âbig bossâ and the âbig bossâ donât like to lose so...         :Frown:

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## Dave A

> ...and the âbig bossâ donâ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  :Stick Out Tongue: 

There is no bottomless money pit.

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BBBEE_CompSpec (27-Oct-09), tec0 (25-Oct-09)

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## 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 âto dateâ 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...  :Smile:

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BBBEE_CompSpec (27-Oct-09)

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## 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.

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## 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.

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## 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.

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## 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?

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## 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.

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## wynn

Aha! we have a new M&B in EL at the all new Hemmingways Mall!!!!
Coffee the same price though. :Embarrassment: 

I personally don't have any staff at all but would consider venturing into the odd business if it was not for the fact that staff administration would take up more time than they are worth, or would require hiring someone just to administer the HR???

In the past their were a lot of small builders who used to employ up to five staff permanently, more on occasions. (I am not talking about exploitative use of cheap labour here, they were paid well, rations, school fees and clothes for kids etc. a bit paternalistic perhaps) as soon as all the new unionisation and laws came in these guys rather packed it in and went and worked as storemen or such, so five guys and their families lost out for every small builder that closed.

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## tec0

In deed one can argue to a point, short term employment is BS, yet if you look at government doing this YES they are responsible for giving short term contracts and all that. It is also true that not every business has an HR system and or even understands the basics of what Unions and the CCMA can do to you if reported. 

Well letâs point at a few factors when it comes to job creation and sustainability. Letâs take farming for example. Agriculture is sustainable if the government wants it to be. Purifying plants to increase fresh water availability is always looked at as a bit of a pipe dream but it is not. We have the technology and with more water we can expand our natural recourses to the point where we can produce product for export and be competitive. 

Now the scale of such an endeavour alone will insure work for generations to come. You will have construction, farming, manufacturing and end product that can sustain us for the future. Also make no mistake we need it because in the future our food demands will double! 

South Africans are use to easy money, and imports but fact is our ânatural rescoresâ WILL NOT last forever and we need to look at the future. 

Job legislation is as useful as brick in the ocean! We need to look at the problem and it is not always the business owner that is creating the problems! Before you can have labour legislation make sure there is enough jobs!

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## BBBEE_CompSpec

Vavi will never get what he wants right. I open businesses everyday. If you don't want staff take on learners. They never belong to you. You don't even have to pay them. I have just left East London. In Johannesburg for Chemo. I haven't had the honour of seeing the new mall yet. Lost hope with Hemmingways. Read my articles. I am sure you will pick up a tip or two. Remember, advice is free.

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## BBBEE_CompSpec

There are plenty of jobs available. Just not the ones that most people want. I cannot find appys or learners in the motor industry. They don't want to get their hands dirty.

I have to agree with you as far as farming is concerned. I have just attended the Agriseta Convention. I hope they can accomplish what they have set out to do.

As far as legislation, learning the laws and unions are concerned, this is where we can help each other. I am re releasing my hard cover book on "Making your union act more professionally". I have also released my 21st Edition of "The S M E Human Resources/Industrial Relations Toolkit" in CD/DVD format. Everything you need to know. 650mb of pure wisdom. My best ever.

I need to get back on my feet. I have been on my back for seventeen weeks, now. I need to get back to work.

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## sterne.law@gmail.com

> 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.


At the risk of being cliched - what is a business without your staff?  But yes with a small business it is tough. Just the mountain of legislation is scary - safety officer, employment equity, this licence that licence etc, etc. Interestingtly this is something I have found occuring in the last 2 weeks, where a SME has asked if I can perform teh HR role as an outsourced consultant, rather than just the legal guy. It seems it could be quite a need. ANy suggestion from the owners? Would a outsourced HR be viable, make sense and can it work for a SME?

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## wynn

Opportunities are there all the time, but because of HR admin and onerous employment laws, most of those opportunities are ignored.

My aunt wants her house painted?
In the old days I would have gone to the local paint shop, got a recommendation for a good freelance painter and his assistants and gone and given a quote.
If I got the job her next door neighbor would have asked if I could repair her driveway, the old man across the road would have needed his fence fixed and the widow down the road wants the leak in her roof sorted out and so on.
Today I would tell her to look in the yellow pages for a painting contractor and she will wind up paying the earth for the priveledge. The others jobs will remain undone.

If this was my business, outsourcing HR would be part of the solution, but so would outsourcing the labour.

There were builders/developers/project managers who employed no staff, but who provided work and paid well.
They would calculate the job down to the finest detail and then subby the work to labourers to clear site, wetwork contractors, plumbers, roofers, electricians, tilers, decorators, etc.
But without the core staff to do the clearing, foundations, floor and wetwork the rest cant get the subcontract either, so the whole thing falls down, because the labourers cant be employed to do a simple but well paid job then move on without all the other BS.

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## BBBEE_CompSpec

It has worked for me in the past. It has major limitations though. We are going to eventually have to go to consultation. It limits us at the CCMA.

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## AmithS

If you are operating a business in a certain area and for that particular industry there is a bargaining council active that prescribes min wages, leave, hours, etc...

Do you have to follow these as set out by the bargaining council ?

Thanks in advance

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## BBBEE_CompSpec

The Building industry Bargaining Council is only there to control the Provident Funds that were in place prior to March 1 2003. There are no Bargaining Rules in place as yet. I will check for further legislation for you.

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