The small business sector: deregulation or collective bargaining?

24 Jul 2013

Introduction:'Abraham Adamson, owner of A&A Motor Spares in Athlone, Cape Town, was dealing with a client in June 1991 when the sheriff of the court walked in and seized 21 gearboxes and various other movable assets. His [Adamson's] crime was failing to pay two of his 14 employees the overtime rates stipulated by an industrial council which a few weeks earlier he never even knew existed. So begins one of numerous press reports in the last few years recording the burdens placed on small entrepreneurs by legal regulation in general and industrial councils in particular. A senior manager of the Small Business Development Corporation (SBDC) was reported as saying that 'he is aware of 10 cases in the Western Cape where businesses were liquidated by industrial councils over the last two years, generally for non-payment of levies'. Two comments by small employers, quoted in the same report, pithily express their viewpoint: 'Either I pay them [workers] below the minimum wage or I close my doors and they lose their jobs. They prefer to have their jobs.' 'They want to tell me when I can open and close my factory at Christmas. These people are killing employment. If I comply with these rules I will have to close down my company.