Johannesburg - South Africa faces a real prospect of a jobs
recession, recruitment group Adcorp said on Monday, as employment numbers fell
for the third month.
"Most of the job losses during August were in the
formal sector, which shed 14 382 jobs," Adcorp said in a statement.
"Permanent employment fell by 7 688 during the month,
whereas agency employment increased by 1 083."
According to the Adcorp Employment Index, employment fell at
an annualised rate of 0.23%, following sharp declines of 3.1% in May, 2% in June,
and stalled employment numbers in July.
After three months of falling employment, a jobs recession
was a real prospect.
This occurs when there are six consecutive months of
There was a trend towards the use of agency temps, and away
from in-house temps as part of labour risk outsourcing.
Trade, transport, finance and community services - the
services sectors - gained 14 000 jobs.
But the primary and secondary sectors, including mining,
manufacturing and construction, shed 16 000 jobs.
Adcorp's index of informal sector employment rose by 2%.
This was the 14th consecutive monthly rise.
South Africa's labour law environment was ranked 143 out of
144 countries by the World Economic Forum's Global Competitiveness Report.
Previously, South Africa was ranked 133rd.
It was the worst country for labour-employer conflict,
second worst for hiring and firing practices, and fifth-worst for wage
Restrictions on the use of temporary workers was the most
problematic of the proposed additions to labour laws and regulations, said
Adcorp economist Loane Sharp.
These workers could only sue the temp agency - their
employer - at present. If the proposed amendments were passed, both the
employer and the client - the company for whom the work was performed - would
be liable, he said.
Although the intention was to give temps the same rights to
legal recourse as other workers, clever commercial contracting would scupper
The provision that work of equal value would receive equal
pay was also problematic.
The intention was that temps should receive the same
remuneration and benefits as permanent workers.
"The unintended consequence will be that remuneration
and benefits of all workers will be reduced to the lowest common denominator,
so that benefits such as medical aids and pension funds will become more, not
less, scarce," he said.
"This ‘race to the bottom' will be fuelled by the
prospect of severe penalties for non-compliance, ranging from 2% of company
turnover for a first offence to 10% of turnover for repeat offences."
A further amendment would require employers to provide financial
security in order to review labour decisions.
This would prevent employers' access to justice.
"South Africa's labour laws favour older, less skilled,
unionised workers at the expense of young and inexperienced job-seekers,"
"The unintended consequence of all this will be an
acceleration of employers' plans to introduce mechanisation and automation in
the form of capital equipment and technology, reducing the economy's labour
intensity and creating additional unemployment."
*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.