Mar 04, 2011
Stringent SA labour laws not main barrier to international investmentBack
Smartman Consultants|Brazil|China|India|Russia|South Africa|Customary International Law|Labour Law Consulting|Labour Law Regulation|Temporary Employment Services|Tobie Nel
© Reuse this
“Society is driven by demand. Ultimately, if unemployment is high, labour law regulation will be high. However, from an economics point of view, I don’t believe that this will influence investment in South Africa, because investors prefer to consider the availability of resources in the country, as well the profit they will be able to make. Therefore, I don’t think there is substantial evidence to suggest that our overregulated labour laws are scaring investors away,” Nel argues.
However, he notes that the argument about whether stringent labour laws are directly a result of disinvest- ment in the economy has been ongoing.
“Not everyone agrees with this, how- ever, as the South African economy has been growing steadily for a number of years, if one does not consider the recent recession. I have found that corporations and governments primarily look at the opportunities that exist, rather than the problems,” Nel explains.
By way of example, he cites South Africa’s recent invitation to join the Brics coalition of Brazil, Russia, India and China.
“Many consider South Africa too small to be a member of Brics; however, China is looking at South Africa as the gateway to the African continent, and this is a prime example that stringent labour laws by no means influence solid investment and development strategies,” he adds.
However, he questions how efficiently these labour laws are being managed.
He says that section 232 of the South African Constitution stipulates that customary international law is law in the Republic, unless it is inconsistent with the Constitution or an Act of parliament.
“Being a member of the ILO, South Africa participates in international policies. For example, the South African government is aiming to create decent work for all, which is consistent with the stand of the ILO. This is also the underlying objective of the proposed amendment bill, but when one looks at how government went ahead and initiated the proposal, I find it hard to understand why government seemingly didn’t acknowledge certain key institutions, bodies, or persons that are key to this process,” Nel says.
He adds that the South African Society for Labour Law expressed concern that government did not discuss the proposal with the National Economic Development and Labour Council prior to its publication, and questions whether input from the Judge President of the labour court or Commission for Conciliation, Mediation and Arbitration (CCMA) National Directorate was obtained.
He adds that the “effective ban” of labour brokers is also an area of concern.
“Even though the proposed bill does not outright ban temporary employment services (TES), it does remove the incentive for employers to use labour brokers. Generally, there is agreement that managing labour laws to prohibit the use of TES could result in more unemployment,” he says.
Further, he states that it is the prevalence of crime, corruption and political tension in South Africa, that scares investors away, rather than the country’s labour laws.
“Despite investors being somewhat wary of investing in business in South Africa because the legislative framework allows strikes and protests (within boundaries), this is not what ultimately prevents them from investing,” he says.
However, he says that South Africa continually deploys sound macroeconomic policies that seem to be drawing investors, despite the country’s stringent labour laws.
He says that, despite investors being wary of South Africa’s high crime rate and its political complexity, the economy continues to recover from the downturn. However, companies that were forced to retrench employees are not yet in a position to hire staff again.
He believes that the country’s high unemployment rate can be reduced through increased foreign investment.
“Unemployment is primarily connected to the economic state of a country. We need investments from overseas companies in all local sectors to grow our economy and create more job opportunities,” he says.
He suggests that, despite the new amendment bills, which propose increased regulation of South Africa’s labour legis-lation, government should focus on making labour laws less stringent.
Nel believes that less stringent laws will give investors and employers the ability to start businesses with more freedom, as companies will not be regulated by an abundance of laws. He says that this will make investors and employers less wary of employing more people, thus creating more job opportunities.
Know Your Rights
Further, he says that employers should also make use of labour law consultants when faced with labour and employment disputes to ensure they get the correct advice and information on how to successfully handle a dispute.
“If employers attempt to resolve an employment dispute without adequate knowledge or assistance, they could take the wrong approach, which seldom leads to reaching a mutual agreement with the employee and resolving the problem,” explains Nel.
On the other hand, Nel suggests that employees must also become acquainted with the labour laws and that they should seek the assistance and expertise of unions in the case of employment disputes to ensure that their interests are thoroughly protected.
He notes, too, that there are several technical aspects of administration that pose challenges to both employers and employees.
He adds that the referral of unwarranted disputes to the CCMA adds further frustra- tion, as some cases are merely a result of employees without the relevant knowledge lodging complaints without legal grounds to support the complaint.
Meanwhile, Nel says that the Labour Relations Amendment Bill aims to assign more power to the CCMA, which will enable it to effectively assist employees.
“The amendments will authorise the CCMA to assist parties to serve notices and documents in respect of conciliation and arbitration proceedings. Currently, these are the responsibility of the applicable parties,” Nel explains.
If properly managed by the CCMA, it could prove to be a successful system,” he concludes.
Edited by: Shannon de Ryhove© Reuse this Comment Guidelines
Other Labour and Employment Law News
The wider powers and additional functions that the Labour Relations Amendment Bill (LRAB) 2012 proposes to allocate to the Commission for Conciliation, Mediation and Arbitration (CCMA) will place significant pressure on the CCMA, as the scope of disputes that it...
The legislature has recognised that employers are trying to use fixed-term contracts and labour brokers to avoid the responsibility of being an employer. Therefore, the currently proposed amendments to the Labour Relations Act of 1995 (LRA) contain several...
Updated 6 hours ago South Africa's drive to create a competitive and food-secure State was boosted on Tuesday with the launch of the Centre of Excellence (CoE) in Food Security, at the University of the Western Cape, which would bring together a cohort of experts and researchers from 19...
Updated 6 hours ago The City of Cape Town has entered into eight third-party service provider agreements licensing the take up of the spare infrastructure capacity generated through the city’s broadband network. Lease-agreement negotiations were progressing with another 20 third-party...
Updated 7 hours ago A 344.5 t wax reactor has arrived at petrochemicals giant Sasol’s Fisher-Tropsch wax expansion project, in Sasolsburg, in the Free State, after five weeks of road travel from Richards Bay, in KwaZulu-Natal. The reactor was transported through Pongola, in...
Recent Research Reports
Steel 2014: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2014 report provides an overview of the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon steel and stainless...
Projects in Progress 2014 - First Edition (PDF Report)
This publication contains insight into progress at the delayed Medupi and Kusile coal-fired projects, in Mpumalanga and Limpopo respectively, as well as at the Ingula pumped-storage scheme, which is under construction on the border between the Free State and...
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
This Week's Magazine
There is enough water in South Africa to supply communities and the economy, even if some activities may be constrained, such as agriculture in the Limpopo, says National Planning Commission commissioner Mike Muller. Muller was also the director-general from 1997...
South African antenna designer and producer Poynting and provider of professional products, system integration and implementation and commissioning services for the broadcast and telecommunications markets in South Africa, African Union Communications (Aucom),...
Industrial automation giant Festo has been displaying some of the its ongoing research projects and latest automation developments and products at the Hannover industrial fair from April 7 to 11, as part of its Integrated Automation – The Next Steps theme. The...
South African retail companies are responding to the way in which e-commerce is changing their engagement model with customers by improving customer engagement channels and order fulfilment intelligence, says industrial and retail software company JDA Europe, Middle...
In support of the South African government’s mandate to create more jobs and promote sustainable development, multilevel marketing company Amway’ business model aims to assist government in easing the startup of business and encourage an entrepreneurial mindset...
Next ArticleDismissal of an incarcerated employee