Although the bad news of a collapsing rand affects everyone, there might be some glimmer of hope for those who are involved in small manufacturing plants.
The higher cost of foreign currency leads to all sorts of ills, such as food increases and fuel increases. Borrowing has also become a lot more expensive, affecting just about everyone in South Africa.
However, I had a few interesting discussions with clients who are in the manufacturing industry in the Cape. Of the seven companies I spoke to, six have reported bigger and more varied orders. Obviously, the cost of imported goods does hamper and increase the price, but the cost of importing finished products is becoming prohibitive.
All six of those who have reported greater orders had contacted me because they wanted to start re-employing individuals who had been dismissed for operational requirements (retrenched) over the past six months.
When a retrenchment programme takes place, the employer invariably guarantees re-employment to those should the positions become viable within a certain period. We duly contacted those who had been retrenched, and many were only too pleased to report back for duty. Hopefully, this good news story will be repeated many more times across South Africa.
When importing from abroad there are many handicaps. First, there are time constraints, and second, the weakened rand has pushed the price up sky high. Above this, when importing from jurisdictions such as the Far East, the import companies are forced to order in large bulk. They are hamstrung, to a large degree, trying to vary the order to cater for various colours, sizes and shapes.
Local manufacturers have become a lot more nimble and are able to deliver quicker, cheaper and in accordance with the requirements. Unfortunately, our government is not doing much to encourage and or enhance the manufacturing sector in South Africa.
Manufacturers are desperately waiting for a change of government who will understand the nature of business and the need for specific types of employment relations and governance.
For the manufacturing sector to be quickly responsive to orders, they should be able to engage with staff for short periods and do away with many of the constraints contained in the Basic Conditions of Employment Act. For instance, if an order specifies delivery within 48 hours, then it would be incumbent upon the manufacturer to engage staff for a short period of employment, within an intensive burst of activity for the 48 hours. Our law frowns upon such type of atypical employment.
The government and the Department of Employment and Labour need to reassure us that they can tackle employment swiftly and terminate with no liability. As advised, South African business is finding it easier to outsource work to those who don’t adhere to our labour legislation.
Furthermore, despite the weak rand, many businesses are saying that it is easier for goods to be manufactured elsewhere. We are a wealthy country that has raw materials and the scope to train young people. We must at least take the opportunity of a weak rand by turning it into a positive in circumstances, such as the above.
The horror of having to tackle claims of unfair dismissal sometimes makes a whole exercise worthless. We need to reassure the business community that the laws will adapt to changing business circumstances. In this way, we can start encouraging small businesses to pick up the economy by reinvesting in themselves.
* Michael Bagraim.
** The views expressed here are not necessarily those of Independent Media.
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