CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
5.4 SUGGESTIONS FOR FUTURE RESEARCH
Considering the outcome of this study and the limitations identified in the previous section, the following suggestions are proposed for future research into a similar topic:
Bhorat, Magadla and Steenkamp (2015) investigated the employment effects in the TES sector following the regulatory amendments, whilst this study aimed to explore the effects of the regulatory amendments on labour flexibility within the
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component manufacturing industry. With the unveiling of employee motivation, productivity levels, and labour cost implications within the context of this study, interesting opportunities for further research pertaining to the effects of the legislative change have emerged. It is recommended that the effects of the regulatory amendments on each of these respective topics is explored, after which it can all be brought together to provide an holistic view of the impact of the regulatory amendments on all the stakeholders within the industry.
As the topic being researched is current, with the LRA amendments only being in effect since early 2015, some crucial decisions that could significantly influence the outcome of the study still hang in the balance. It is recommended that a longitudinal approach for future research could be adopted to enhance the qualitative trustworthiness of the study.
5.5 RECOMMENDATIONS
It is evident from the findings of this study that the increasing need for flexibility in the workplace is linked to the need for increased flexibility in the workforce, where flexible production is supported by flexible labour. Considering the post-regulatory effects on labour flexibility, businesses will have to seek alternative means to retain their flexibility in the new highly regulated environment. With the fate of the industry hanging in the balance, it may be time for businesses to explore more contemporary approaches. Perhaps the time have come for businesses within the industry to stop operating independently, and to start exploring approaches where flexibility could be achieved through the collaborative sharing of labour.
In the meantime, with the labour court ruling still pending, the new legislation has had no impact on businesses that opted to wait for the constitutional court ruling.
As these businesses are still able to retain the flexibility of the past, it may be wise for businesses to wait for this important ruling before making any further changes in response to the amended legislation. However, this suggested approach needs
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to be carefully weighed up against the potential penalties associated with non-compliance of the new legislation.
5.6 CONCLUSION
The aim of the study was to understand the impact that the amendments to section 198 of the LRA have had on labour flexibility in the Nelson Mandela Bay automotive component manufacturing industry. In chapter 1 the importance of this industry towards the regional and national economy of the NMB region, the Eastern Cape and South Africa was illustrated. It is against this background that the study was conducted with the intention to contribute to the sustainability of the respective businesses, and the industry at large.
As alluded to in the results reported in section 4.4.2, the use of temporary employees through TES’s before the amendments provided businesses the flexibility to adjust their workforce in line with their operational requirements. The findings further substantiated that these businesses that have built flexibility into their strategy also achieved great benefits in terms of productivity levels, employee motivation and financial results.
The primary focus of the study revolved around the concept of labour flexibility, of which the respective secondary components was summarised in section 5.2 within the context of the research questions. The empirical results revealed that the amended legislation did have a significant impact on labour flexibility within the industry, of which these subsequent effects directly impact on the profitability and the future sustainability of the businesses. The business decisions of the respondents indicated by the movement from numerical flexibility before the amendments to temporal flexibility after the amendments, and the cost implications of excessive overtime and retrenchments on the total cost of labour which was discussed as a component of financial flexibility, shows how these secondary components of labour flexibility overlap with one another to create a snowball
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effect where the cost of labour is spiralling out of control. It is against this background that businesses now find themselves in a situation where the associated cost implications, the challenges to remain productive, and reduced levels of employee motivation are all negatively impacting upon labour flexibility, following the passing of the amended LRA.
The research has revealed how businesses within the NMB automotive component manufacturing industry have been affected in terms of labour flexibility, and while the researcher appreciates these findings respective to the individual businesses, it is not yet clear how this will impact on the future sustainability of the industry. Although section 4.4.6 highlighted the apparent views of the respondents pertaining to the future sustainability of the industry, it seems as if most businesses are absorbing the effects of the amended legislation for the time being.
The concluding question that now linger in the mind of the researcher is whether businesses are genuinely coping with the effects of the amended legislation, or whether everyone is waiting for the much-anticipated outcome to the appeal of the labour court ruling in the constitutional court. Will this ruling be the pivotal point that ultimately decides the fate of the automotive component manufacturing industry in South Africa?
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122 Appendix A: Ethical Clearance Form
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124 Appendix B: Interview Guide
1. The changes outlined in section 198 of the LRA amendments are specifically focussed 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 is your interpretation of the amendments pertaining to this section of the LRA?
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?
(If the answer is “no” to any of the above, explore reasons for not making use of temporary employment.)
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?
(Explore reasons for any shift in temporary employment levels.)
4. What are the most significant benefits that the use of temporary employees through labour brokers offers to your organisation?
(Try to work with the participant to classify each benefit into one of the labour flexibility categories. Temporal / Numerical / Financial)
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5. Do you feel that some of these benefits discussed above have been affected following the amendments coming into effect?
(Explore the actions or business decisions resulting in any of the benefits being affected.)
6. Moving forward following the amendments coming into effect in 2015, business have adjusted its strategy to deal with the relevant changes in legislation.
Shifting the focus to the concept of labour flexibility, more specifically the tree types of labour flexibility which are defined as numerical, temporal and financial flexibility, I would like to explore how your organisation goes about dealing with each of these operational requirements.
6.1. Numerical Flexibility
Should your operational demand require a shift in the number of direct employees, be this an increase or a decrease, how would you go about implementing such a change today?
(*Hiring new employees* *Shifting labour* *Retrenchments* *Short-time*)
(Explore how this this requirement to change would have been dealt with prior to the amendments coming into effect.)
6.2. Temporal Flexibility
Should operational demand require a shift in the number of working hours required, be this an increase or a decrease, how would you go about implementing such a change?
(*Overtime* *Short-time* *Shifting labour* *Shut-down*) (Explore how this this requirement to change would have been dealt with prior to the amendments coming into effect.)
126 6.3. Financial Flexibility
Labour costs are a key focal point in any manufacturing operation, and the ability to influence the cost of labour or the levels of payment could have substantial financial benefits. How can you influence the cost of labour or the levels of payment in your operations today?
In closing the interview process:
7. What is the significant influence the amended legislation to section 198 has had on your organisation?
8. How has this impacted on business feasibility today and in the years to come for automotive component manufacturers in the Nelson Mandela Metropolitan area
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Appendix C: Verbatim Transcript of Interviews
Interviewer: Petri Badenhorst Interviewee: Plant Manager Company: Company A
Interview Setting: Interview was conducted at the premises of Company A, in the Plant Manager’s office
Date of Interview: The interview was conducted on Tuesday, 15th August at 14:00 PM
1. The changes outlined in section 198 of the LRA amendments are