The effects of labour law on small firms in South Africa : perceptions of employers in the hospitality sector in Pretoria, Gauteng

Abstract

The South African government has attempted to find a balance of interests between the employer and the employee by the introduction of the Labour Relations Act in 1995 and the Basic Conditions of Employment Act in 1997. It is critical to the health of the South African economy that these labour laws do not impact small businesses to the extent that the Gross Domestic Product of the country is negatively affected. There are conflicting reports as to how these labour laws affect small businesses. It is therefore important for government to be able to understand, define and measure the impact of its labour laws on small businesses, in order for it to strategise corrective measures, which may include reconsidering the application of the legislative directive, regulated flexibility, if required. The study was limited in the sense that it was solely based on evidence collected from employers. An interpretivist approach was applied as a research methodology to data collected through in-depth interviews. The main findings of the empirical analysis demonstrate that labour legislation does not heavily impact small firms. It was thus determined that extensive measures were not needed with regard to correcting the framework of regulated flexibility.