While big companies operating in South Africa often complain that labour laws are too stringent and ward off investors, they can also be a hinderance for small businesses, according to National Union of Municipal Chambers of Commerce and Industry president Albert Jeleni.
He told Vutivi News that the main reasons were that SMMEs could not afford lawyers or other professionals to ensure compliance.
“Compliance with various labour laws and regulations cannot be done without the assistance of a professional. A small business owner must, from the onset, budget to hire a professional to be able to comply,” he said.
“Secondly, one would ask if it is fair that big companies and small companies pay the same rates for UIF (Unemployment Insurance Fund). It becomes unaffordable for SMMEs to do so because they don’t have economies of scale…”
He believes small companies should not contribute to the UIF. “If an SMME generates under R10-million profit they should be able to register their employees, but be exempt from paying UIF,” he said.
“The government can then charge bigger companies more on their contributions in order to balance the scale.”
Jeleni also wants SMMEs to be exempt from paying minimum wage, otherwise another option is for the government to help subsidise their incomes.
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“The government insists on a minimum wage to a point where I have to let go of an employee because I can only afford to pay half the minimum wage.
“That employee would have to stay at home not because I cannot afford to pay them, but because the government will not allow me to pay them an amount less than the minimum wage,” he said. Jeleni also criticised how big businesses were able to pay bribes to state agencies, and claimed foreign nationals were doing the same.
“This also includes businesses run by foreign nationals, who would be running a business without a trading permit or even without documentation to be in the country. But because they can pay their way out, they are able to operate with impunity.” Jeleni believes that while some labour laws do impact small businesses, the time is ripe for the state and SMMEs to meet at the negotiation table and start discussions that will benefit small businesses, and ultimately the economy.
