Unions can have a devastating impact on your production due to a protracted dispute or stay-away One of the biggest fears for small business is the potential for conflict with labor union representatives or members. This is, unfortunately, a reality for any business, but especially threatening to small businesses. Unions can have a devastating impact on your production due to a protracted dispute or stay-away, or because you are bound by agreements made at a central bargaining level. These types of high-level agreements may suit the larger enterprises that are able to pass increased labor costs on to the market, but they could seriously hamper your survival as a small business. These threats are obviously biggest for businesses in highly unionized sectors, such as manufacturing and construction.
It is therefore important to bear these risks in mind if you operate in these sectors. And, while the solution may appear to be to ban union membership by your employees, this is not allowed under the Labour Relations Act. As a small business, it is also quite likely that you will be employing younger, less experienced staff. This could play to your advantage in being able to select employees who are not union members or who value the security that a job offers. The introduction of the youth wage subsidy in 2014 goes a long way to opening the door for younger employees to enter the workplace.
How this works is that employers can claim the incentive for any employee between the ages of 18 and 29 who receives a monthly salary lower than R6 000. The scale of the benefit ranges according to a number of different criteria and salary brackets. SARS has provided this useful guide and automated calculation page to determine the extent of the rebates that apply. As an employer, it is always going to be difficult to avoid the effects or threats that unions may hold over your ability to run a lean, profitable business.
Adopting a confrontational approach to union membership or representatives is a sure way to raise this threat level to the extent that your viability is at risk. At the very least, ensure that you comply with all labor regulations in your industry. Better yet, build an understanding and relationship with union members and representatives. Should you operate in an industry that is subject to union action, it always pays to cover your back by contracting expertise in the form of a labor lawyer or consultant who can advise you. Key takeaway: Labour unions are a reality in many industry sectors. Ensure you are aware of the labor regulations and workers’ rights and that you remain compliant. The investment in a labor lawyer or consultant during salary negotiation periods will stand you in good stead.