Etapas fundamentales

Understanding the impact that the change in legislation would have on businesses has been the focal point since the beginning of this research project. In the previous sections, most of the discussion have revolved around the detailed behaviours and decisions of businesses before and after the amendments. This theme labelled “Implications of legislative change”, revisits these beforementioned discussions with the aim to provide an overarching view on how businesses interpreted the effects of the amended legislation.

It is evident from the data that before the legislation came into effect the use of temporary labour through TES providers offered substantial benefits in terms of labour flexibility. Following the amendments, specifically for the businesses that adopted the strategy to become compliant with the new legislation, the view exists

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that these benefits have been significantly affected. The most prominent responses refer to how businesses have been stripped of the flexibility they had in the past.

D 1: Transcribed Interview - Company A

“Certainly the benefits we had historically have been affected, and purely from a response point of view and flexibility point of view.”

D 3: Transcribed Interview - Company C

“Yes, completely …. It kills our flexibility.”

D 4: Transcribed Interview - Company D

“It was surely easier when we had the flexibility that labour brokers provided us. In the past, a supervisor could request an increase or decrease in labour on short notice, whereas now they have to carefully consider whether the need really does exist.”

D 5: Transcribed Interview - Company E

“I think a lot of the flexibility we had in the past is going out the window quickly.”

D 6: Transcribed Interview - Company F

“…that is the flexibility that we have now lost.”

D 6: Transcribed Interview - Company F

“Yes, absolutely. So now that benefit of time in terms of an open-ended arrangement has gone…”

For the businesses that have decided not to comply with the new legislation and wait for the labour court ruling, very little has changed at this stage but they are

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certainly aware of the implications should the ruling of the labour court not go in their favour.

D 2: Transcribed Interview - Company B

“No, these benefits have not really been affected. The trouble would come if the labour brokers would have lost the assigned labour court case, then it would have had a major impact on us.”

D 5: Transcribed Interview - Company E

“…in terms of whether this flexibility has been affected, the answer is no.

Business is going on as usual for us. I would think we are probably one of the only organisations that are still doing this, but this is our stance at this stage.”

The effects of this inability to be flexible in terms of labour has had numerous implications on the businesses itself, and the way they try to manage certain aspects involving the situation they are now faced with. This has resulted in businesses becoming more sensitive to their decisions involving labour, realising the cost implications in terms of productivity levels and the associated added managerial functions, and having to adopt alternative planning strategies to alleviate the associated cost implications. The complexities surrounding these implications is illustrated in the excerpts below:

D 1: Transcribed Interview - Company A

“…we are more sensitive about flexing the way that we could today.”

D 1: Transcribed Interview - Company A

“…it is costing us money as we are becoming less and less productive because we are reluctant to flex that much time out of the business.”

101 D 3: Transcribed Interview - Company C

“…what we have done, even though it did cost us some money, is that we tried to take out the peaks and troughs in our business. The first thing that we have done is where we used to level our production on a quarterly basis, we now level it annually. By doing this we try to cut out the high levels of overtime during the last quarter of the year, and fill the trough of the first and second quarter of the following year.”

D 3: Transcribed Interview - Company C

“…you don’t have the flexibility you had in the past, and as a result you may end up at times absorbing labour costs that was not really necessary.”

D 4: Transcribed Interview - Company D

“…will pose challenges for companies that have a real need for short term flexibility. It will require more accurate planning and definitely a bigger administration burden for HR departments to manage this going forward.”

D 6: Transcribed Interview - Company F

“…it introduces a whole new level of complexity because the fixed term contracts as mentioned earlier needs to be concluded on the specified dates, and we don’t want to go beyond the three-month period.”

D 6: Transcribed Interview - Company F

“Especially for the operations people and for the HR resourced that is trying to make this happen, as it has added another level of burden, complexity, and lack of flexibility into this process.”

Although the above statements portray negative picture in terms of the early implications that the amended legislation has had on businesses, the data also revealed some positive implications that the amended legislation has had.

Businesses are certainly more engaged in their decisions involving the use of

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temporary labour. A lot more focus is placed on strengthening of the workforce in terms of skills developments and assessing whether the need for labour truly exists, which subsequently places more focus on improving the levels of productivity.

D 1: Transcribed Interview - Company A

“…whether the reasons why we require the increase in the number of employees is sustainable. In other words, are the volumes being sustained, do we truly need that many people, and whether the upward shift is the right decision for the business.”

D 3: Transcribed Interview - Company C

“…positive spin-off because you were strengthening your workforce. We also had to make sure that all temporary labour utilised was indeed needed, so we focused on our productivity to make sure of that.”

D 3: Transcribed Interview - Company C

“…for us the cost is pretty much the same except now that we have a more stable workforce it is easier to drive our productivity improvements.”

D 4: Transcribed Interview - Company D

“It has forced us to really look at our temporary workers and the real need for utilising them to ensure that we do not keep employees through labour brokers purely because of the convenience factor.”

D 5: Transcribed Interview - Company E

“I think businesses will have a hard looking to say have I got the right manning levels because it is not that easy anymore.”

103 4.4.6 Future sustainability of the industry

It became apparent from the transcribed interviews that many reference was being made to the South African labour legislation and the increasingly complex labour market within the country. A common response exists amongst the respondents in that the sustainability of the industry hangs in the balance, and the view is that this is driven by the continuous interference of government in terms of labour legislation. The industry is being stripped of the benefits that historically encouraged investors to do business in the country, and the subsequent financial impact that this is having on businesses could result in investors losing their will to do future business in South Africa. The excerpts below highlight the respondent’s views about the potential consequences that the LRA amendments could have on the future sustainability of the industry.

D 1: Transcribed Interview - Company A

“I've been seated in NAACAM meetings where investors have been very vocal about the fact that they have invested in this country based on certain criteria and benefits, and those benefits are slowly being removed. How long will it take before those companies decide to take their business elsewhere?”

D 1: Transcribed Interview - Company A

“If we are going to have all these limitations put in our way and labour continues to cost more, coupled with the inability to flex that cost depending on volumes, we will not survive.”

D 3: Transcribed Interview - Company C

“…we need to start getting people to be interested to come and manufacture in this country. Every law we put in place to block ease of business makes it more difficult, so I see a lot of organisations not getting the contracts that they should.”

104 D 5: Transcribed Interview - Company E

“…it is just becoming more difficult to do business in South Africa from a labour point of view, and I think it will drive a though of thinking twice before awarding new business to existing plants, or opening a new business in our country. It could have a serious impact on the future sustainability of our industry, because labour costs are such an important component of our costing structures.”

D 6: Transcribed Interview - Company F

“…on a weekly basis I must report back to corporate on HR issues typically in South Africa. Just two days ago, I was on a HR leadership call reporting back on the broader HR dynamics in our region, and this matter of governmental interference, the matter of just a highly regulated and inflexible labour market environment without a doubt impacts on our ability to win business.”

4.5 CONCLUSION

This chapter provided arguments to substantiate trustworthiness criteria applicable to the qualitative investigation. From the outcomes of the analysis and empirical results, by making use of thematic analysis to code the data and construct major themes relevant to the objectives of the study, it is clear that there is sufficient evidence to substantiate findings relevant to the primary and secondary research questions. In the next chapter of this study a summary of the research findings, limitations of the study, recommendations for future research and concluding remarks will be discussed.

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