ALEC HOGG: It’ Friday July 22 2011 and in this Boardroom Talk special podcast, Herman Mashaba, one of South Africa’s most celebrated entrepreneurs, joins us to talk labour, Labour Relations Act. It is something, Herman, that as an entrepreneur and as a black entrepreneur you perhaps have a better insight than most people. There’s been a lot of debate brewing but no one really coming out into the open to say whether this is destroying jobs in South Africa.
HERMAN MASHABA: Well, Alec, thank you very much for really engaging me on this subject. As much as I cannot really claim to really be an expert in the actual subject but I can really relate as an employer in this country in different sectors and I’ve really been an employer in this country for almost 30 years. Right now, if I really look at the current legislative framework, unfortunately as far as I can see, it’s actually destroying jobs and really call on everyone one concerned, our labour, colleagues and people in government and the overall business community, we need to really find ways to really engage as a country to really have debates on this. As far as I’m concerned, the current labour regime, it’s actually destroying jobs.
ALEC HOGG: How is it destroying jobs?
HERMAN MASHABA: Firstly, I think look at it from an entrepreneurship point of view, I made a presentation a few weeks ago in Natal called by the KwaZulu-Natal investment people, regarding development of entrepreneurship and I said how are we going to develop entrepreneurship in this country under the current regime. I gave an example of that anyone today can take you to the CCMA, I gave an example of my personal experience. One example and I can give you many and you can ask entrepreneurs in this country to give that, that anyone can take you today to the CCMA. I was in a shop in Polokwane talking to the storeowner and he said, “Please sir, get me a merchandiser in my store.” I said to him, okay, have you got some people you’d like to refer to me and they gave me two ladies and I said - because I’m not an employer in my business – I said when I get to Johannesburg I’ll give it to my HR department to contact you and that’s exactly what I did. Two or three months later, I receive a demand from the CCMA in Polokwane calling me to the hearing because I promised someone a job and I failed to do so. I said, in the beginning I didn’t even know what they were talking about and when they related this, I realised what had happened. Out of the two ladies, our HR people decided to take one, it had absolutely nothing to do with me. But then you can imagine someone who was not employed can actually take you to the CCMA. It took me three trips of going to Polokwane but now you can imagine for a small businessman or entrepreneur in Soweto or Sebokeng wanting to start a business and they’ve got to be subjected to this, do you think this guy has got any chance of that business succeeding? Not a chance. So, I think if we have to create employment, we have to encourage our entrepreneurs, be it in the townships or in our cities, in our suburbs. I’m not really promoting and asking us to operate in a jungle, definitely South Africa has got good laws that I think all of us need to respect. But those that are obviously working against us, let us find ways to review them and I believe very strongly that the current labour regime is actually destroying jobs.
ALEC HOGG: Herman, do you think there’s an understanding about those people who are writing the laws that jobs are created by business, not created by government.
HERMAN MASHABA: Well, I think for me it’s really something quite fundamental that I believe we get to really get South Africans to understand that. No business in the world and I’m really prepared to really ask people to really carry out studies, no businessmen anywhere in the world will employ for the sake of employing. You employ because you can afford to and, actually, you need those people. But the thing is a question of really being forced to employ people because legislative regimes say you must employ them. Those businesses are not going to be sustainable. Right now really look at how businesses are going through a difficult time in our country. Right now we’re obviously going through some real severe strain as far as demands are concerned. But at the same time, I look at people all over the world, particularly rich people, are working harder, not that they need the money but then at the same time, in our country, we’re saying we want more money but we want to work less. I cannot see how the two can actually mix when we have to compete with the Japanese, we’ve got to compete with the Indians and the Brazilians and the rest of the world. So, we’ve got to find a way, as a country, to encourage our people to really work hard. At the same time, yes, government has to come out with a legislative framework to make sure that people are not exploited in the process.
ALEC HOGG: But what we’re seeing, Herman, is a New Growth Path, which talks about bringing people together to debate these issues on the one hand and on the other hand, tightening up still further of labour legislation.
HERMAN MASHABA: Well, I think right now my feeling, my own personal judgment of right now is like business people, employers are actually regarded as enemies of the people and for me, as a country I think we’re making a terrible mistake. We don’t have to really use one isolated case of exploitation and really take it as a global phenomenon. Yes, absolutely, where there are weaknesses in our system let’s handle them. Like, right now, I’m calling on us, as a country, to say, guys let’s review our Labour Relations Act because it’s actually destroying jobs. I’m not really saying this because I’m critical; I’m saying this because I love this country. I’ve got family members in the villages, in the townships, all over, who everyday are calling on us to employ them but we just cannot employ them because we can only employ people for as long as we can afford to.
ALEC HOGG: You mentioned that there’s a perception that businesses are enemies of the people, where did that come from?
HERMAN MASHABA: Well, I don’t know, honestly, I think if you really listen to the statements on a daily basis, it’s actually coming out that it’s like labour and business, labour are the good guys and business is the enemy of the people. I think, for me, it’s a very dangerous situation we’re creating because I think the business people in this country, generally, are good human beings, good South Africans committed to the development of this country but then we need labour to really come to the party to really work with business. At the same time, yes, you need labour to ensure that business people don’t take them for granted because I know where I was born and brought up, I guess if my mother or my father had labour representation, I’m sure they would have given me a better life. But at the end of the day, I should not really just use history as a yardstick for going forward. Yes, I use history to really learn from it but at the end of the day, going forward, I’ve got to really use what is actually practical at that point in time.
ALEC HOGG: Isn’t that maybe the shift we need to make, Herman, that we have a country where people were terribly exploited in the past and for many it’s a burden that they just can’t get past. They can’t get over that the reality is different.
HERMAN MASHABA: Alec, let me tell you something, look at history all over the world, people went through exploitation, including our country, South Africa, probably being the last people to really be liberated. But at the end of the day, you know what, our future is going to be determined by what we do with the future. Yes, I definitely agree, that’s why I believe very strongly that labour has got a very, very critical role to play. They played their role during the liberation struggle, they played their role the last few years of our democracy, even now and in the future they have such a massive role to play. We really need them, we just cannot really do without them but at the same time, we need everyone, we need labour, we need government, we need business, we need civil society to really all of us work as South Africans and partners in this initiative.
ALEC HOGG: It seems then from what you’re saying that the pendulum has swung just a little too far, that what’s happening today – you gave your own CCMA case – it just doesn’t seem to be easy to employ people anymore and if that’s not the case, then how do you cut into unemployment?
HERMAN MASHABA: It’s precisely my argument, it’s precisely my concern and I’m raising this concern as someone who loves this country and I think we really need to get this country to work.
ALEC HOGG: So, what would you suggest? What is your blueprint?
HERMAN MASHABA: I think really call on all the professional people involved in these debates to actually really go out there in the communities, go and find out why people are not employed. Actually use totally independent studies and analysis not just really look at it from the one point of view.
ALEC HOGG: But isn’t this what Trevor Manuel is doing in the National Planning Commission?
HERMAN MASHABA: I really hope so and if that is the case, please find a way to accelerate the process.
ALEC HOGG: I say that because there’s been a lot of investigation into issues that are wrong in South Africa but the point you’ve raised is not one that seems to be on their agenda at the moment.
HERMAN MASHABA: That is really, personally, maybe I’m wrong because obviously I’m not really saying this articulating or representing anyone, I’m just really saying this as a concerned South African.
ALEC HOGG: Herman, going forward, as far as you’re concerned, what would help you to be a businessman who would go out and employ more people? What would you need?
HERMAN MASHABA: Well, I think firstly I need an environment where, you know what, if I have to employ people, I’ve got to really employ people because I have the need for them and I can afford them. I think, at the same time, operating in an environment where people I employ also have to really take the responsibility, personal responsibility that obviously if they’re not really happy with what I’m offering them, then they’ve got an option to really go next door. They don’t have to really work for me because they’re forced to really work for me. They work for me because they enjoy it and so forth because you can imagine if you allow that, you’ll open up so many avenues and business people, no businessman can afford to really lose good people in your organisation, you need them, you’ll pay them. That’s why from time to time when it gets to an opportunity to pay people, you pay them because you don’t want to really lose them and I think it’s important for us to create that value system, that culture where employees at the same time understand that, you know what, to survive, I’ve got to make myself indispensable, I’m not going to be dependent on Herman to employ me because legislatively he has to employ me because as an employer, you’ll always find a way, you’ll always leave yourself vulnerable. If you don’t want to be vulnerable, make yourself indispensable. That is why I raised an issue about education, let’s really give our people, from early stages of our lives, let’s give them good education, so that by time they join the work market they are well equipped, they’re totally independent thinking human beings.
ALEC HOGG: Herman Mashaba, one of South Africa’s most celebrated entrepreneurs.