Jobless don’t know why they can’t get jobs

Sol Plaatje wrote in Native life in South Africa how black farmers trekked along SA’s roads with their livestock, searching in vain for land to hire or for alternative partners to replace those who had suddenly informed them that they would in future have to work for wages and could no longer trade their labour for grazing and a share in the crops. What they failed to realise was that the 1913 Land Act made it an offence, punishable by a substantial fine, for a white landowner to sell or lease land to a black person, or to farm in partnership with black farmers.

The effects of the labour laws on the unemployed are similar to the effects that the Land Act had on black sharecroppers. Neither those early landowners nor current-day firms dare disobey the laws in view of the sizable penalties for transgressing. While the 1913 farmers trudged futilely from farm to farm looking for places to settle and resume farming, the jobless now trudge from firm to firm looking for jobs, unaware of the nature of the problem that causes doors to be shut in their faces.

I wrote Jobs for the Jobless: Special Exemptions Certificates for the Unemployed, launched by the Free Market Foundation on 14 June 2004, to put forward a proposal that would allow the long-term unemployed to get jobs free of the formidable barriers they currently face.

Unemployment is one of the most serious problems facing our country today. At least five million, and possibly as many as eight million, South Africans are jobless, and the numbers of unemployed keep growing as more school-leavers enter the marketplace. Numerous methods have been proposed to alleviate the plight of the unemployed poor, but the only way to bring about a permanent reduction in unemployment is to increase the number of real productive jobs in the private sector.

Employers declare that they avoid hiring additional labour, especially unskilled labour, because compliance with the labour laws is too costly. It is not politically feasible to reduce the job security of those who are already employed, but an unemployment rate of 28% to 42% is untenable. Something must be done – but what?

The Free Market Foundation has been working on this problem for several years. Jobs for the Jobless, is the result, and it contains a viable policy option that could contribute towards getting the jobless to work, without affecting the job security of existing employees.

As the title implies, I propose that unemployed people should be offered the option of applying for a special certificate which would exempt them from labour laws and regulations (but not from common-law protections) for a certain period of time if they believe that will give them a better chance of finding work.

The specific conditions of the proposal are:

Only people who have been unemployed for 6 months or longer would be eligible.

Spex (special exemption) certificates should be issued by local agencies such as local authorities using simple and quick procedures, and relying on sworn declarations to confirm the length of time unemployed.

The certificates should exempt the unemployed person from all statutory labour laws and regulations. A very small piece of legislation would be necessary to institute the proposal.

Employers of Spex certificate-holders would be safeguarded from prosecution under the labour laws by the exempt status of the employee, but only in respect of exempted employees.

Spex certificate-holders would be entitled to negotiate employment contracts on any basis they choose with any firm that has, say, fewer than 200 employees.

The certificates should remain valid for at least 2 years.

There must be a basic, simple, employment contract between employee and employer.

Each of the proposed conditions has an important objective:

The 6-month waiting period is intended to prevent employers from firing and re-hiring – the proposal is not intended to assist employers to circumvent the labour laws, which would remain unchanged except for the Spex certificate provision.

Local authorities are the logical issuing agents as they are easily accessible across the country. The procedure must be simple and quick so that the unemployed are not subjected to unnecessary bureaucratic delays.

Exemption should cover all labour laws to allay the fears of potential employers about unintentional contravention of the laws. Spex holders would still have the protections offered by the common law, a written contract, increased job mobility and a watchful media.

Although Spex certificates would exempt employees, employers would piggyback on that exemption.

Exemption holders should be allowed as much scope as possible to obtain jobs. However, labour unions would probably want to see a limitation on the size of employing companies.

SPEX certificates should be valid for at least 2 years to give holders adequate opportunity to find jobs, change jobs, consolidate their positions, build up track records and make themselves so indispensable that they are taken on as permanent staff members.

A written contract is necessary to ensure that there is no uncertainty about the terms – it forms an indispensable part of the proposal. However, it is vitally important, in the interests of the unemployed, that all the terms should be freely negotiable.

Jobs for the Jobless attempts to deal with the realities of SA’s mass unemployment. If 3 million of the unemployed can earn just R5,000 per annum it will mean R15 billion in the hands of SA’s poorest people, giving them back both hope and self-esteem.

Poorly paid jobs and poor working conditions, if that is all the unemployed can find, are better than no jobs at all. All they need is a foot in the door and they will build on their opportunities. Give them the opportunity to decide for themselves. That is what Jobs for the Jobless seeks to do.

Author: Eustace Davie is a director of the free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.

Copies available from the Free Market Foundation at R30-00, including postage. Contact Judith – Tel (011) 884-0270 Fax: (011) 884-5672 Email je.fmf@mweb.co.za. Copies for review available free of charge.

FMF Policy Bulletin / 18 August 2009