Job Seekers Exemption Certificates: Just Let Me Work!Government should help the jobless to help themselves by removing the obstacles that prevent them from selling their labour at the best price and under the best conditions they can find. Putting the solution squarely in their hands is the only way to rapidly reduce South Africa’s mass unemployment. Just Let Me Work!
SA’s labour laws are the root cause of mass unemployment
As matters now stand, the job market is slammed shut in the faces of the old, young, inexperienced, unskilled, and long-term unemployed. In the final analysis, the law must stop preventing unemployed people from deciding that poorly paid jobs and poor working conditions, if that is all they can find, are better than no job at all. What is truly bizarre is that the SA labour laws intended to compel employers to treat their employees better, are precisely the laws that cause mass unemployment. This allegation comes as a shock to most people, including the drafters of the labour laws. However noble their intentions might have been, the cost of sacrificing contractual freedom in labour markets in favour of worker protections falls heavily on the unemployed.
Costs of complying with labour laws are a major employment inhibitor
Compliance costs, which include the cost of familiarisation with the laws, paying labour consultants and dealing with labour issues, could amount to at least R2,000 per month per employee, which means that the barrier to entry into the labour market resulting from the proposed NMW would, for instance, not be R3,500 per month but R5,500. As a percentage of the total wage, the compliance cost would be about 57% of the wage whereas for an employee earning a wage of R20,000, it would be much lower at 10% of the wage. There is consequently a considerable bias against employing low-skilled employees.
The Job Seekers Exemption Certificate (JSEC) can alleviate the problem
The JSEC proposal was first formulated for an organisation of the unemployed, to use in their appeals to government to allow their members to freely negotiate and enter into contracts with employers free of the constraints imposed on employers by the labour laws. It is designed to, without reducing the job security of workers who already have jobs, remove the barriers to entry into the job market that have caused 9.2 million people to be unemployed. I am the author of the booklet Jobs for the Jobless published by the FMF in 2003 in which the idea of the exemption certificate was first proposed. Exempting the long-term unemployed from the formidable barrier caused by the labour laws seems to be a no-brainer, on condition that it does not reduce the job security of people who already have jobs, which it does not. The small revision to the labour laws to allow for the issue of the JSEC will not in any way change the job protection laws contained in the current labour dispensation.
What the JSEC will do for the unemployed and their potential employers
Unemployed people would decide for themselves whether to apply for a JSEC: the choice would be entirely in their hands. Having obtained a JSEC, holders will remain entirely in control of the situation. The JSEC could help them to get a first job and they could then use it further to job-hop until they find one that suits them best. Once firmly established in a job they would be looking to become members of the regular staff, subject to the same conditions as the rest of the staff. For the employee it offers a foot in the door of the job market. For the employer it offers the opportunity to take on new employees without the risk involved in dealing with general labour law red tape. It offers a win-win opportunity, for the long-term unemployed, especially, as well as individual and small business employers. A copy of the JSEC and a basic simple employment contract signed by employer and employee would be produced to labour inspectors wishing to verify the legitimacy of the situation.
Qualifying to receive a JSEC
Ideally, unemployed people could become eligible for a JSEC when they lose their jobs. Critics would argue that this would encourage employers to dismiss their workers and re-hire them once they have JSECs. A waiting time would identify the genuinely unemployed but it should not be too long. Anyone who has been unemployed for six months or more should be entitled, as of right, to a JSEC. Currently, a few million people would be immediately eligible.
Period of validity of the JSEC
JSECs should be valid for at least two years to allow the holders to get a job, swop jobs a few times, build up skills and a track record, and establish themselves in the job market. After being unemployed for a long time, it will, for many unemployed people, be a slow and painful process. They would need to be given time and treated with consideration.
Simple quick application procedure and issue of certificates
A simple and quick application procedure and issue of certificates is proposed, with applicants cautioned not to commit perjury, signing a declaration confirming that they have been unemployed for longer than six months. Qualifying applicants should not be subjected to official discretionary power. Issuing agencies, such as municipalities and post offices should be available countrywide within easy access.
Most people will find jobs if the barriers to employment are removed
The JSEC proposal is based on the conviction that most people who want to work would find jobs in the absence of the barriers to entry created by the labour laws, including the minimum wage laws. Absent the barriers, job seekers would be knocking on doors and bargaining over employment with employers.
The role of small firms in employment
Small firms play a significant role in the economy. In the European Union (EU), nine out of ten of the 23 million SMEs, which employ almost 90 million people, are micro enterprises with fewer than 10 employees. This suggests that South Africa’s micro firms could employ a large percentage of its 9.2 million unemployed, especially if they, together with the unemployed, are freed of the red tape that currently prevents this from happening. JSECs offer a way to allow micro firms and the unemployed to prosper together.
I have been campaigning for decades for the rights of the unemployed to take control of their own lives and to decide for themselves what conditions of employment and wages are acceptable to them. Denial of that right is inhumane, and, I would suggest, unconstitutional. This is an appeal to government to institute the legislation that will enable the unemployed to enjoy those rights. Just Let Them Work!
Eustace Davie is a director of the Free Market Foundation, the author of Jobs for the Jobless and a contributing author of Jobs Jobs Jobs