Rigid labour legislation shatters President’s dream of a better South Africa
10 July 2019
While President Cyril Ramaphosa is dreaming about a better South Africa, rigid labour legislation, with factors like Affirmative Action (AA) and Black Economic Empowerment (BEE), remain one of the biggest obstacles on the road to economic growth and job creation.
Not only is it nearly impossible to dismiss incompetent employees, but transformation targets must also be met. Employers, and not only employees, should enjoy the support of the Department of Labour.
This is one of the biggest reasons why large companies are taking their business, and factories, abroad, which results in unemployment locally. Thus, it is imperative for the Department to strike a healthy balance.
Employees must be protected against exploitation and malpractice, while the private sector, particularly small businesses, should be given the opportunity and leeway to create jobs.
The Department must take its task to create more jobs seriously. At present, a lot of the things that the Department is saying and doing are contradicting this new mandate seeing as these things are actually resulting in less job opportunities. On the one hand, the Department's budget determines that it must enforce labour legislation that makes job creation more difficult, while on the other hand, it is expected to create more jobs. It is impossible.
Misguided priorities and populist policy directions must be done away with. South Africa has become a welfare state where approximately 17 million people are dependent on social grants. There are more people who are dependent on social grants than there are people who have jobs (16,3 million).
South Africa's expanded unemployment rate, taking jobseekers who have lost all hope into account, currently stands at 38% and the youth unemployment rate is a shocking 55,2%. Between 2001 and 2016, dependence on social grants has increased with a staggering 328%. These figures make it clear that the Department has a mammoth task ahead of it to turn this welfare state-ship around – with an inadequate budget.
The obvious solution to South Africa's unemployment problem is that sustainable economic growth must be achieved. That can, however, not be done by simply redistributing wealth. This legislation also needs to be reconsidered.
Real solutions include abolishing detrimental policies and labour legislation; restricting the power of the trade unions, which goes hand in hand with strikes, through legislation; abolishing AA and BEE; implementing a fair youth wage subsidy as it could have its benefits; and close cooperation between the relevant departments – like the Department of Education and the Department of Labour – so as to prepare the youth to enter the labour market.
Due to its youthful population, South Africa has a demographic dividend that could promote economic growth if it is utilised correctly. This will benefit everyone if we have sustainable policy directions without racial discrimination and divisive labour practices.
Issued by Heloïse Jordaan, FF Plus MP and chief spokesperson: Labour, 10 July 2019