A contributing factor to this poor ranking, according to Kgomotso Ramoenyane, executive general manager for human resources at Business Partners Limited, is how complex the labour laws can be for a business to navigate.
“Small and medium enterprise (SME) business owners are particularly vulnerable to the cumbersome nature of the compliance and reporting requirements of the labour legislation, which drain valuable time and resources that should rather be spent strategising and growing their business.”
On a national scale, Ramoenyane said this impacted economic growth. “The risk associated with hiring is particularly high in South Africa because it can be a difficult, onerous, and sometimes exorbitantly expensive exercise for business owners to dismiss staff members who are not a fit for the company.”
It comes as no surprise then, said Ramoenyane, that the most recent business/partners SME Index revealed that only 41% of SMEs are confident the current labour laws are conducive to the growth of businesses.
In cases where a labour dispute is seemingly unavoidable, Ramoenyane urged business owners to be as prepared as possible.
“Should the SME owner feel their knowledge is inadequate, they are encouraged to seek assistance from labour lawyers or professionals within the field.”
Ramoenyane said there was an exciting new CCMA web tool to guide smaller businesses on labour relations matters and processes.
“The Commission for Conciliation, Mediation and Arbitration (CCMA) has partnered with Business Unity South Africa (Busa) to develop a free-to-use web tool which will provide South African businesses with up-to-date information on the Basic Conditions of Employment Act, the National Minimum Wage Act, as well as contract templates and information sheets.
Ramoenyane said: “Considering the negative impact that South Africa’s cumbersome labour legislation is having on SME economic activity, a much simpler framework, regarding labour laws, in which SMEs can operate, and without all the red tape, is needed.”