To create more jobs in South Africa, we cannot continue as usual

15 July 2021 by Michael Bagraim

As we struggle under level 4 lockdown and the economy shrinks daily, we need to start asking future employers to consider alternative means of job creation.

We all understand that our labour laws are a handbrake to job creation and the various harsh regulations discourage small businesses from taking a chance by employing someone to see if it works out.

We are also aware that over the next few years job creation is going to have to come from the small business sector.

It’s difficult for the small business sector to compete with big business when they are bound by the same regulations as the conglomerates.

The bargaining council system, geared to support big business, stifles small entrepreneurs. The World Economic Forum ranked South Africa as one of the worst countries in the world in terms of our labour laws and regulations.

We cannot continue as usual as we will exacerbate the problem of having one of the highest unemployment rates in the world.

Above this, we have low rates of economic growth and our labour force is, unfortunately, unproductive in comparison with other jurisdictions.

Bearing in mind that the apartheid government destroyed the education system for most people, we need to start thinking differently about how we can circumvent all the negative factors. Many of the stifling conditions under apartheid still exist and we are a long way away from a free market system.

The first thing we do need to think about is how to create jobs for firsttime job seekers and how to get our youth trained to be productive and profitable for employers.

To this end, small businesses and entrepreneurs need to consider employing individuals on three-month contracts. The contract would reflect a start date and end date and would show the individual is employed for a specific task.

If the position produces results and becomes viable it should lead to an offer of a permanent post. Our laws are structured in such a way to allow an employer to take that chance in the first three months.

Employers are also encouraged to use a written probationary agreement which would allow them to more easily terminate the employment agreement should it be non-viable. Probation is an underutilised clause in South Africa but is valid under our labour law.

The commissioners at the CCMA and the Bargaining Councils take probation into account and rule more judiciously in favour of the employer if it can be shown that the employee did not perform in accordance with the contract during probation.

There are other ways of entering into employment agreements that would make it more functional for an employer. For instance, employers can enter into agreements with third parties who supply labour initially.

If the system works for the employer and the employer finds that the agreement is functional, the employer can then enter into an agreement directly with the third party who has supplied the labour, to take over the employees permanently. Again, this gives an employer some leeway to assess whether the productivity and functionality would be worthwhile.

Many of these agreements are condemned by the labour movement that demands “decent” work only.

Unfortunately, if the alternative ways of entering into employment are not going to be encouraged and allowed, then the pathway to enter employment will be minimal.

The International Labour Organization has been carefully looking into the global trend of a-typical forms of employment.

As the modern economy starts to grasp the first green shoots of the Fourth Industrial Revolution, we see that a-typical forms of employment is the real growth factor.

The Department of Employment and Labour has defined “decent” work as being work in line with the National Minimum Wage Legislation.

This gives some leeway to employers to start ensuring that they look at alternative ways of employing individuals as long as they include at least the minimum wage under the National Minimum Wage Legislation.

The National Minimum Wage legislation does not define employee but defines worker, which allows all the a-typical employment and other structured engagement.

We have an enormous informal economy. The informal economy enters into work arrangements with individuals which are vastly different to the employment contracts in the formal economy.

This informal economy is probably going to be the real growth in South Africa over the next decade.

We need to look at the new definition of decent work, meaning at least payment in terms of the national minimum wage.

We have more than 10 million unemployed South Africans who would dearly love to at least be given a chance, even in the informal economy.

Unfortunately and shockingly, the big business sector has created a monster via their bargaining councils. This monster has priced the cost of labour out of the market. Big business is looking to mechanise, computerise and outsource rather than bring in new employees.

Fortunately, the mechanisation and computerisation is too expensive for small business and they need to look at direct employment

The government has to stimulate demand for labour. If the labour is cost effective and does not create a “marriage”, small business owners would do everything in their power to at least take a chance on employing others.

It is clear that many of our labour laws raise the cost and risk of doing business. Unfortunately, our government has seen fit to propose more and harsher amendments to our legislation, rendering greater risk and cost.

With no job, the minimum wage is R0 an hour.

* Michael Bagraim is a labour lawyer. He can be contacted at

** The views expressed here are not necessarily those of Independent Media.

Source: IOL at