Entrepreneurs’ Hotspot
The recent commemoration of May Day (or Workers’ Day) should include a focus on the right to work — problematic in our country, which is regularly identified as having the highest rate of unemployment in the world. The latest figures — for the end of the 4th quarter of 2023 — reflect an official unemployment rate of 32,1%; the unofficial rate is, of course, higher. The employment outlook for young people is particularly dire. So, it’s no surprise that many people call for a greater focus on initiatives geared to create more meaningful job opportunities.
Part of the solution to our unemploy-ment crisis is most certainly the role that small business could be playing. As Michael Bagraim, a local labour law expert and consultant at Bagraims Attorneys, explains: “It is absolutely clear from research done worldwide that it is small business that creates entry-level jobs everywhere. Small businesses are the best vehicle to appoint, engage and train new entrants into the labour market. And small businesses are invariably labour intensive — which is exactly what we need in South Africa.”
Michael laments the fact that the current government has done nothing of value for small business. We have an intense, complicated labour regulatory environment that is not conducive to job creation; as well as complex labour legislation that favours trade unions and employees, which makes it difficult for small businesses to grow. He points out that, “Most of the small businesses that I deal with on a daily basis are fearful of employing people and invariably would rather invest in larger businesses or take their investment abroad.” The result is that, in essence, there has been a business investment strike for over 10 years.
“Yet, despite this negative scenario,” Michael comments, “there are still numerous opportunities for entrepreneurs, and so we continue
to have a fairly vibrant private sector, with many new businesses being created.”
The starting point regarding our labour laws is for an entrepreneur to acknowledge the difficulties, and to ensure that they know and understand the labour regulatory environment. “Make sure that you remain within the precepts of our labour legislation when you embark on your entrepreneurial journey,” he says, explaining that, “Many small businesses I deal with consult labour consultants regularly to be certain that they don’t fall foul of the law.”
Michael offers these points of guidance for small business owners:
• Put all the rules in place that lay out what you expect your staff to do and what the expected behaviours of employees should be.
• Only if a rule was clearly in place can you consider dismissing a staff member.
• Always keep records relating to any transgression by an employee. You should also keep records that reflect what process was applied when an employee has apparently broken a rule.
• For a dismissal, you also need to have evidence that shows that the particular staff member transgressed the rule.
• When a situation arises in which a dismissal may be necessary, it’s wise to consult a labour consultant who will review the set of circumstances and advise you as to whether a dismissal is likely to succeed. An important element of this is that the employer must have followed a proper process.
• The easiest way for the small business owner to ensure that the merits of the dispute and possible dismissal are valid is to follow the proper process as outlined by Schedule 8 to the Labour Relations Act.
• If you decide to proceed with a dismissal, you must follow a proper disciplinary process. You should appoint an independent chairperson and someone who can follow the disciplinary process as laid out in the Labour Relations Act.
Ultimately, if you prepare properly and keep suitable records, dismissing an employee is possible. Hopefully, we will soon see the start of a more business-friendly environment in South Africa, which encourages entrepreneurs to grow their businesses and, consequently, to employ more workers. That can only bode well for the country.
• Published in the May 2024 issue – Click here to start reading.
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