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“(Sacci) is concerned by the recent research of the
International Monetary Fund (IMF) that the rapid growth of the real wage in
South Africa outpaced labour productivity growth in most sectors and suppressed
employment creation,” said CEO Neren Rau.
“The IMF provides a clear message that the South African
labour market is less competitive than other emerging markets in this regard,
and it is essential for this imbalance to be urgently addressed in order to
create more jobs.”
He said the IMF’s research was pertinent in light of the
proposed amendments to the Basic Conditions of Employment Act and Labour
Relations Act.
Reduce labour market flexibility
“In broad terms, the amendments in their current form will
reduce the flexibility in the labour market and thereby dampen job creation.”
The IMF released its report Real Wage, Labour Productivity,
and Employment Trends in South Africa: A Closer Look on April 1.
The report suggests that South Africa’s large job losses
during the financial crisis in 2008/09 may have been influenced by the rapid
increase in real wages, and not the economic conditions.
According to the IMF report: “Despite the contraction of
economic activity in 2009, the tepid recovery in 2010, and the overall soft
labour market conditions, the real wage continued to increase rapidly,
outpacing the growth of labour productivity.”
Sacci recently surveyed its members about the labour market
and labour regulations.
“The general finding of the survey is that a simplification
of the statutory disciplinary process would lead to greater employment
creation,” he said.
The survey found that smaller companies were more vulnerable
to the administrative costs associated with labour regulations.
“This strengthens the argument in favour of the
simplification of the disciplinary and dismissal processes as the small- and
medium-sized businesses (SME) sector is widely recognised as pivotal to job
creation.”
Forty-three percent of the respondents said economic
conditions were the biggest hurdle to creating jobs.
This was followed by the burdensome dismissal processes in
the current labour legislation at 26%; a skills shortage, 23%; and high wage
demands, 8%.
Just over half of the Sacci members surveyed said they would
like to see the simplification of the statutory disciplinary processes.
Twenty percent of respondents wanted a more favourable
broad-based black economic empowerment rating for education grants and
bursaries.
Rau said Sacci was preparing comments on the proposed
amendments to the labour legislation.
