Small firms offer the best chance of employment

Small employers offer the greatest hope to the unemployed. They will hire the inexperienced, the young, the old, the illiterate and the otherwise disadvantaged. They have niches into which they can fit people who would have no hope of finding jobs in big companies. Labour law needs to make provision for variations in employment conditions that will allow small employers to hire those who would otherwise be unemployed.

This approach would place the decisions on the conditions of employment entirely in the hands of the employee who would, at all times, be able to withdraw from the agreement by giving the necessary notice. The Department of Labour could ensure that all those entering into such customised agreements were fully aware of the implications of their actions and that information and advice was available from the Department as well as the unions.

Small firms need access to simpler and cheaper dispute resolution

It would also make sense to develop a simpler and cheaper method of dispute resolution, perhaps the equivalent of the small claims court. This could go a long way to ensure that disputes are dealt with quickly and effectively without recourse to legal representation. It should be borne in mind that in small businesses staff work closely together and that disputes tend to draw in colleagues and this can affect morale. For owner-managers there would be little risk of protracted and costly disputes. They might not always get their way, but a quick and inexpensive result puts an end to the matter and makes it possible for all concerned to move on.

Section 64 of the Labour Relations Act grants every employee the right to strike and every employer can resort to a lockout if proper procedures, as laid down in the Act, have been followed. Strikes and lockouts, however, are not an appropriate method of resolving disputes in small organisations. In practice, the right to lockout has very little value to a small employer because of the high cost and the employees may not have the resources to hold out in a lengthy dispute. If, however, the workers have the backing of a powerful union, the whole balance of power changes and the prospect of a mutually acceptable solution is diminished. Might usually wins the day regardless of the merits of the case and the outcome can be destructive for the small business and, ultimately, for the workers.

The possibility should be considered of granting relief to small employers and their employees from the provisions relating to strikes and lockouts to the extent that Section 36(1) of the Constitution may authorise reasonable and justifiable limitations on the right to strike.

AUTHOR Michael Bagraim is the owner of Bagraims Labour Lawyers. This article is an excerpt from the book Jobs Jobs Jobs published by the Free Market Foundation and may be published 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 Foundation.

FMF Policy Bulletin / 20 March 2012