South Africa has amongst the most stringent Labour laws globally which in an ideal environment…high levels of productivity, an efficient and driven workforce generating meaningful returns on investment ensuring longevity of employment and a thriving economy…would not present any issues.
Unfortunately, the reality is very different and as a result of low levels of productivity, corruption, nepotism, general inefficiencies and unrealistic wage demands, unemployment in South Africa has reached an all time high of 29%. Even more worrying is that the youth unemployment number sits at 55%.
The downturn in our economy has created a situation where previously healthy, vibrant businesses, both big and small are quite simply not making the numbers to keep afloat and company closures are a stark reality. For example Standard Bank have retrenched 2500 staffers after closing 104 branches nationally (admittedly, technology plays a role here, however). A division of the Imperial Group are in the process of laying off 4500 workers…along with Whirlpool and KIC exiting South Africa leaving a relatively new manufacturing and distribution facility empty in Natal. The list tragically continues.
Current retrenchment laws covered in section 189 of the Labour Relations Act is to say the least, onerous. Mike Shingange of Cosatu says, “it must be made difficult and expensive for employers to rush to 189 as and when they want to lay workers off”..so picture this then, your business is in trouble financially and after exhausting all other options an already expensive and tortuous retrenchment program is the only way to save the company. If these already high costs should rise even further it could well be the death knell and the ultimate demise of your enterprise. This will place in very real jeopardy the future employment of the remaining workers. The business is left with no other option but to liquidate and ALL employees become creditors along with everyone else that is owed money.
So, is it really in the interests of anybody…employer or employee to make retrenchments any more difficult and expensive than they already are.

First prize clearly is that your business flourishes, maintains a healthy bank balance producing quality products or services. A critical element to achieving this is to have the right people on board at all levels of the organization. Staff selection and recruitment is a specialized space and should not be embarked upon without the appropriate skill sets in place. An in house dedicated HR department is one way, but alternatively, and an option that is becoming more and more popular is the outsourcing of the entire back office function to a third party specialist Labour practitioner. This will allow you to focus on producing a top quality product or providing a world class service knowing that your day to day Labour issues are being handled professionally and correctly.

All a bit daunting? Labour Associates is geared to guide you through this potential minefield of legislation and staff selection. Contact us for expert and knowledgeable input.

Labour Associates, your one stop, back office shop!

Call Andrew at Labour Associates on 078 344 8463