Abstract
M.Comm.
The overall aim of this study was to investigate the impact of the wage-setting institutions,
including bargaining councils and minimum wages, on the creation and long-term survival of
small, medium and micro-enterprises (SMMEs) in South Africa.
The objectives of the study focused on (i) gaining an understanding of how the legislative
requirements impact on SMMEs; (ii) investigating what needs to be done to assist small
companies in order to cope with the burden of compliance with the prescriptions and
provisions of the law; (iii) demonstrating how the current wage setting mechanisms are partly
responsible for the promotion of capital intensive firms at the expense of small- and medium
sized entities; (iv) investigating how other countries approach the issue of exemption of small
businesses from the stringent requirements of labour legislation; and (v) exploring the
possibility for the establishment of a separate dispensation that may be utilised to govern the
wage-setting environment for the SMME sector.
The study commenced with the review of different literature sources. First, the importance of
the SMME sector in wealth creation and the role of the government in developing SMMEs
were dealt with. Existing constraints and problems, other than labour-related factors, facing
the SMMEs were identified with the sole purpose of highlighting the general conditions under
which they operate. The support offered by government and other stakeholders in developing
SMMEs in South Africa were also discussed. Second, an overview of wage-setting
institutions that shape the South African labour market, i.e. the National Economic
Development and Labour Council (NEDLAC), bargaining councils and the Employment
Conditions Commission (ECC) was provided.For the purposes of this study, two case studies (i.e. Sweden and Egypt) were chosen and a
comparative analysis of these case studies focusing on the wage setting environment was
performed, with the hope of drawing important lessons for South Africa. The cross-case
analysis revealed that there are differences and similarities in the nature of wage-setting
institutions that are found in Sweden, Egypt and South Africa.