Business organisations have voiced concern over amendments to South Africa’s labour legislation, approved by Cabinet last week, but welcomed a decision not to ban labour broking.

The Steel and Engineering Industries’ Federation of South Africa (Seifsa) said that the Basic Conditions of Employment and Labour Relations Amendment Bills would negatively impact business, raise the cost and complexity of doing business in South Africa and add additional restrictions on legitimate business operations.

This would lead to job losses and hamper the creation of new employment opportunities in the manufacturing industry, Seifsa president Henk Duys said.

“Employers are expected to create jobs, retain jobs, train more and offer opportunities for a better life for the people of our country. At the same time, the draft legislation forces us to employ people on a permanent basis with very little of the employment flexibility required to capitalise on business opportunities under the prevailing economic climate. Employment is not created through making it more and more difficult to be in business,” he pointed out.

Duys added that the nature of the manufacturing industry called for flexibility and an ability to adapt to market needs was a necessity to remain sustainable. In line with this, employment needs to rise and fall as required by the company’s order book, the market place and the general economy.

Business Unity South Africa (Busa) said that these bills, if enacted, would make employment more difficult, more complex, and increase uncertainty and risk.

The Democratic Alliance (DA) said that, while the amendments were a “step in the right direction”, many significant challenges needed to be dealt with.

The party said that it would oppose the proposal that the Labour Relations Act be amended to ban all temporary work in excess of six months.

Sapa reported last week that Labour Minister Mildred Oliphant said that the legislation sought to deal with and prevent the abuses that had been associated with labour broking in part by limiting temporary employment to six months.

“This means that once temporary workers serve out their six-month ‘temporary’ period, employers will be forced to either hire them permanently, or retrench them,” DA shadow minister of finance Tim Harris said.

As employers often struggle to afford hiring more permanent employees, many temporary workers could lose their jobs.

The Congress of South African Trade Unions continued to call for an outright ban on labour broking, commenting that further regulation would not be sufficient, as labour broking existed as a means to avoid regulation.

Meanwhile, Busa added that the new equal pay requirement in the bill would result in the ratio of cost to employment rising, with employment becoming less feasible.

The DA aimed to challenge the proposal that the Basic Conditions of Employment Act be amended allowing the Labour Minister to determine wages in sectors not covered by sectoral determination or a bargaining council centralised agreement.

“The amendments related to strikes and lock-outs will [also] not achieve their intended purpose, as the proposal will instead have the impact of allowing pickets to take place in areas that are owned by other non-affected parties. It is unclear how this will limit strike violence, as there is a far greater potential of harm to people and property,” Busa commented.

Meanwhile, the business organisation also claimed that Cabinet failed to undertake a further regulatory impact assessment (RIA) or wait for a final National Economic Development and Labour Council report on the proposed labour law changes.

“Business has been requesting that a RIA be conducted on the Bills before they are approved in order to ensure the best possible regulatory solutions that would not compromise existing jobs and job creation,” it stated.

The Basic Conditions of Employment Act Amendment and the Labour Relations Amendment Bills would now go to Parliament and become the subject of public hearings.