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Metropolitan area?

Interviewee: In my view, it is a big factor. If you look at other countries in the world that are most competitive, they certainly do have the ability to be flexible in terms of labour. Then you also have the countries where you don’t have flexibility in terms of labour. If you look at our organisation, we have significantly downsized or closed plants in regions where this flexibility is limited, because it does not suit our business to have that level of in-flexibility. Those businesses have been sourced to countries like the United States, India, China, where you do have this flexibility and that is where the investments are being made. The one factor that you need to be able to control in your business, which is a big number probably ranging from 15 to 50 percent of your costs, is labour. If you can’t find a country where you can control that and flex it directly with demand, it is a major problem. If we end up like countries in the world where we try and fight for business based on local volumes only, which are tiny, like most of us are competing in, how do you survive by not having flexibility in one of the major cost items when you are supplying low volumes. Yes, if we do have global contract with big volumes and sustainability then it’s a different story, but we are small and we don’t have the same luxury like countries in Europe and the United States.

Interviewer: It has happened, and the flexibility you had in the past has been taken away, do you think we have some challenges to face in the future? In

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reading between the lines, your view is that some organisation may opt to source their operations elsewhere?

Interviewee: Absolutely. 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? If you look at our case, we are a global organisation, and we aren’t spoon fed on how to run our business. Our directive is to run our business independently, and it has been made very clear that if our business does not become sustainable and show growth, we will shut down. The global organisation will not continue to invest in us, they want their respective businesses to grow and show return on their investments. 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.

140 Interviewer: Petri Badenhorst

Interviewee: Human Resource Manager Company: Company B

Interview Setting: Interview was conducted at the premises of Company B, in the Human Resource Manager’s office

Date of Interview: The interview was conducted on Thursday, 17^th August at 10:30 AM

1. The changes outlined in section 198 of the LRA amendments are specifically focused on regulating the use of employees employed on a temporary basis. Businesses have historically been able to capitalise on the benefits of temporary employment by making use of TES’s, more commonly known in South Africa as “labour brokers”. What was your interpretation of the amendments pertaining to this section of the LRA at the time?

Interviewee: Firstly, let me say that we do make use of a lot of temporary workers in our operations. We have a preferred labour broker that we partner with, and at any stage our temporary workforce varies from between 90 - 140 employees.

When these amendments came through, we obviously waited for the outcome of the current CCMA case where the ruling went against the labour brokers and in favour of the union. At that point we did not really make any changes, even though the union was on our backs arguing that we needed to make these temporary employees permanent. The matter was then referred to the labour court and we still did not change anything, we just waited to see what the labour court ruling would be. We played the waiting game and kept our temporary employees as is without changing anything. We did at the time make about 90 employees permanent, but that had nothing to do with the change in legislation as it was driven by purely by projected volumes.

Interviewer: So, it was business as normal and you waited to see how the court case would play out.

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Interviewee: Yes. We had a lot of pressure from the union to make people permanent and sort of just defended our stance saying to them that if we make employees permanent we will just end up retrenching employees at a later stage.

We just kept the status quo.

2. Did your organisation historically (prior to the amendments coming into effect) make use of temporary employment through labour brokers?

Does your organisation still make use of temporary employment through labour brokers?

Interviewee: As I've mentioned above, it is pretty much the same. The numbers have not really changed, the only change in the numbers have been based on operational requirements.

3 To what extent did your organisation make use of temporary employees historically, and has this number changed at all following the amendments coming into effect? Please do elaborate on temporary employment levels in comparison to permanent employees prior to the amendments coming into effect, and after the amendments coming into effect?

Interviewee: The percentage split stayed the same. We have always complied with the MIMCO agreement which outlined a specific ratio of temporary employees to permanent employees. I think this is at around the region of 35% temporary employees versus permanent and we pretty much always stuck to this ration. The union has always wanted us to make more employees permanent, and we sort of had an understanding that we would reduce this number from 35% to about 25%, but it never really materialised as we decided to stick to the MIBCO agreement.

Then what happened with the change in the legislation, especially following the labour court ruling, that whole section of the MIBCO agreement was null and void.

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So now you could really have a 50/50 split if you wanted to. So, we maintained the same ratios.

4 What are the most significant benefits that the uses of temporary