Labor laws killing small businesses, South African president says
6 Feburary 2000
JOHANNESBURG (February 6, 2000 11:14 a.m. EST
http://www.nandotimes.com) - "Unreasonable" aspects of
South Africa's labor laws are strangling small businesses, President
Thabo Mbeki said in an interview published Sunday.
Expanding on comments he made in a state-of-the-nation address to
parliament Friday, Mbeki told the Johannesburg Sunday Times
that the laws, aimed at overhauling exploitative apartheid-era
labor legislation, have had "unexpected consequences."
"The burdens placed on small businessmen to comply with some of
these provisions are quite unreasonable," Mbeki
acknowledged. "I'm told of instances where they would produce
He said many small companies and non-governmental organizations did not
have enough money to advise them of the requirements of the laws.
"Some people might have all their revenue for six months swallowed up by
hiring a lawyer -- they'll die. And yet the law says that if they don't behave
correctly, they will be in violation of the law. It's things such as this that
need to be attended to."
Clauses that big business claims have forced enterprises to cut their
labor force and resort to mechanization include those relating to probationary
employment, notice periods, pay for overtime work and work on Sundays, and
procedures surrounding unfair dismissals.
A concession that businesses employing fewer than 10 workers are entitled
to pay a lower overtime rate has not resolved the problem.
Labor Minister Membathisi Mdlalana said that he expected
amendments to certain provisions of the Labor Relations Act, the Basic
Conditions of Employment Act and the Insolvency Act to be completed by August
Business has blamed the legislation for not providing the proper
environment to create jobs and for leading to higher labor costs.
Unemployment is running at around 30 percent.
Mbeki said in the interview he had begun a new and intensive
interaction with trade unions through a presidential working group to
bring labor on board on a range of contentious economic policies aimed
at attracting investment.