Media release: Michael Bagraim launches review of LABOUR legislation that undermines small business

25 October 2022

Gail Day

The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for
a non-racial, free and prosperous South Africa.
As a policy organisation it promotes sound economic policies and the principles
of good law. As a think tank it seeks and puts forward solutions to some of the country’s most pressing problems: unemployment, poverty, growth, education, health care, electricity supply, and more. The FMF was instrumental in the post-apartheid negotiations and directly influenced the Constitutional Commission to include the property
rights clause: a critical cornerstone of economic freedom.

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Michael Bagraim launches review of LABOUR legislation that undermines small business 

On 25 October 2022, the Free Market Foundation (FMF) presented its fourth booklet in a series of eight titled Laws Affecting Small Business. Michael Bagraim, labour law specialist, outlined the negative effects labour law has on small business, and recommended solutions.
Labour legislation imposes an excessive burden on small business owners since compliance incurs onerous costs. Those who do not comply, face possible legal sanction.
Many cases at the Commission for Conciliation, Mediation and Arbitration (CCMA) are brought against small business owners for alleged unfair dismissal. Making it difficult to terminate employment contracts has the effect of discouraging small business owners from hiring employees and thus reducing unemployment.
One of the reasons South Africa’s unemployment numbers are among the highest in the world is because our labour laws are inflexible. Laws Affecting Small Business – Labour proposes solutions which will lead to a reduction in the unemployment rate.
The FMF recommends the following and more:

  • Recognise the right of small employers to freedom of association as well as disassociation by exempting them from the provisions of the Labour Relations Act which interfere with that right.
  • Allow employees to enter into written “customised contracts” with small employers in which they waive some of their statutory entitlements under certain specified sections of the Labour Relations Act and the Basic Conditions of Employment Act.
  • Exempt small employers from section 10 of the Labour Relations Act, thereby restoring the burden of proof to the person making an allegation regarding the conduct of another person.
  • Exempt small employers from the requirements of section 16 of the Labour Relations Act relating to disclosure of information.
  • Exempt small employers who are non-parties to collective agreements from extension of those agreements
  • Automatically exempt small employers from sectoral determinations promulgated in terms of section 44 of the Labour Relations Act read with section 54 of the Basic Conditions of Employment Act.
  • Allow small employers to be represented by experts in labour law in conciliation proceedings held in terms of section 135 of the Labour Relations Act if the employer is not a member of an employers’ organisation and if the employee is being represented by a member of a trade union.
  • Set a ceiling of two months’ salary on compensation that may be awarded in terms of section 194 of the Labour Relations Act against small employers in the event of a finding against the employer. 
Michael Bagraim echoed the sentiments of the booklet during his presentation, stating: “We now have 11 million unemployed South Africans. Productivity is at an all-time low.  Small business is the only hope for job creation.  Without the relaxation of our labour laws and regulations small business will not be able to do the necessary”.
This was the fourth in a series of eight mini-launches to introduce recommendations to reduce the laws negatively affecting small business across a range of issues: tax, land, licensing, justice, labour, finance, health, schooling. Small businesses are the engine of the South African economy, and therefore the legislative instruments governing them are integral to creating an environment of growth and job-creation.
Laws Affecting Small Business – Labour can be read
Launch dates and speakers

02.11 | 1100-1130 – Gary Moore – HEALTH (WEDNESDAY)
08.11 | 1100-1130 – Bouwe van der Eems – SCHOOLING
15.11 | 1100-1130 – Langa Bodlani – JUSTICE
22.11 | 1100-1130 – Darlene Menzies – FINANCE

04.10 – Dawie Roodt – TAX 
See presentation
The TAX booklet can be accessed

11.10 – Terence Corrigan – LAND 
See presentation
The LAND booklet can be accessed
18.10 – Neil Emerick – LICENSING
See presentation
The LICENSING booklet can be accessed

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