By Cebelihle Mbuyisa
Some amendments to labour equity laws are detrimental to the wellbeing of many employees in the workplace and directly contribute to worsening business performances in the small business sector. This is according to a study called Labour Regulations in Check: Small and Medium Enterprises’ Workforce Wellbeing Conundrums in South Africa that was published earlier this year.
The author, Dr. Reward Utete, argues that some amendments to the Employment Equity Act undermine the wellbeing of SMMEs while attempting to level the playing field for all employees. The study surveyed workers in 550 SMMEs across all industries in South Africa. Utete found that by focusing on prioritising employment equity (to redress inequalities of the past), specific factors that contributed to the success of all employees were being ignored. These included pay and job satisfaction. This, by extension, led to bad performances overall and often the collapse of a business.
Highly skilled workers then left for bigger businesses and corporations. Utete argues that this in turn is bad for the economy because it means many SMMEs are not in business for very long and that there is no sustainable SMME sector that acts as a catalyst for sustainable economic growth. “After independence in 1994, the promulgation of the EEA 55 of 1998 was not aimed at perpetuating revenge and hurt towards the previously advantaged groups but was introduced to eliminate discrimination and to redress labour imbalances in the workplace.
“The central mission of the amendments is to rigorously dismantle the labour market in order to empower previously disadvantaged groups as a way of redressing past imbalances. The amendments to employment equity in South Africa spark extensive controversies and critiques; it seems undeniable that they have a great impact on workforce wellbeing,” writes Utete. However, Utete believes that the impact of the legislation and its amendments has often been negative on small businesses. “Generally, there is a poor growth rate for SMMEs; uncertainties within the employment equity amendments are the key cause,” he adds.
But Cosatu disagrees. Cosatu parliamentary coordinator Matthew Parks told Vutivi News, “We wouldn’t agree that employment equity [amendments are] a threat to any worker or the economy. It focuses on ensuring workplaces reflect [the country’s] diversity and ensuring all workers are supported to meet their potential.” He said the recent amendments gave workplaces five years to meet their targets and accommodate those who genuinely could not meet them.
