South Africans Need To Be Fireable

We can fix our unemployment. We just need to allow employers to say the simple phrase: “You’re fired!”

Photo by sol on Unsplash

The fundamental issue in South Africa is unemployment. Joblessness is the foundational crisis feeding into every rotten part of our democracy; it fuels crime, anti-social behaviour, squalor and depression. It strips people of their dignity and gives populists extra power to bribe their way into power through welfare grants and promises of Eden.

The core mandate of any South African political party that takes the governance of this country seriously should be to address unemployment. As of 2025, 31.4% of South Africans were unemployed. This rises to 42.1% when you include discouraged work-seekers. The majority of the unemployed are young people without even a foot in the door; they are untried, untested, and full of energy that needs to be harnessed productively.

But South Africa’s labour regime and regulatory framework do not serve to equip these young job candidates with gainful employment. But too often, they are the ones blamed: ‘They aren’t skilled enough, aren’t educated enough.’

Education is constantly considered the silver bullet that will cure South Africa’s ills. And while education is doubtlessly important, this country’s education isn’t underfunded. Education spending as a share of GDP was only 4.8% in 1987. 5.3% in 1994. It is now 6% as of 2024. For comparison, the OECD average is 4.9%.

The problem is that you can’t just spend yourself out of a crisis. And our education sector suffers from the same issue that our economy suffers in general. Educational supervisors, like employers, are not allowed to say: “You’re fired!”

It is incredibly difficult to fire or retrench an employee in South Africa. When a teacher shows up to school drunk, causing matriculants to miss a trial exam, there is no true accountability. The South African Democratic Teachers Union (SADTU) jumps in to defend even the worst performing educators, protecting their job at the expense of students.

Bad teachers are incredibly hard to fire, ensuring that schools remain a waste of time for many students.

But even good students from decent schools will struggle to find a job. The top tier of our employable youngsters, graduates, still face a 13% unemployment rate as of 2024. That may be tiny compared to the national average, but still above the 2.73% graduate unemployment rate in the UK, and the 2.6% in the USA.

While degrees, diplomas and certification do help, it is still more difficult than it has to be for an entry-level worker to find employment in this country. Not to mention the fact that we cannot expect most people to get university degrees just to get a job. That expectation has served only to devalue degrees through creating too many degree-holders, while also ignoring the possibility of non-degreed labour, which should be the mainstream in a developing country.

We need to shift the focus away from upskilling workers on mass and rather change institutions so that even the most uneducated worker has a shot at a job.

Rather than helping amend the problem proposed laws such as the Draft Employment Laws Amendment Bill and Draft Labour Relations Amendment Bill only double-down on them. In particular, the proposed legislation seeks to double severance pay for retrenched workers.

Retrenchments are undertaken, most often, when a business can no longer afford to keep a worker. Severance pay in general holds businesses, particularly small ones, from being able to dynamically restructure their operations on the fly to be efficient and resilient. Many small businesses don’t have enough cash on hand to pay severance, so they must hold onto an unprofitable worker instead.

Larger companies can often absorb these regulations. If they need to retrench workers, they have labour lawyers on retainer to sit at the CCMA for months on end; a small business owner doesn’t have that luxury.

Rather than the current dispensation, imagine if that worker could instead be retrenched and the job market was open enough that they could quickly find work in a business that could give them more productive and fruitful work.

In a country with such high unemployment we need to encourage job creation. This means we need to incentivise employers to want to employ workers. We don’t have a lack of job positions in this country. South Africa has great potential upside, with still bountiful mineral wealth, established industries and a wealth of expertise. But companies, particularly small businesses, cannot risk employing new workers in case they end up having to retrench or fire them later.

As counterintuitive as it may sound, the best way to encourage job creation would be to allow people to easily lose their jobs. It may sound heartless; nobody wants to lose their job. But if they can easily find a new job, one that may gel more with their personal needs, then it is no longer a true problem.

The academic studies agree that stringent labour regulations, particularly restrictive retrenchments, contribute to unemployment.

A University of Pretoria MBA study in 2013 found that 93.8% of small business owners agreed that flexible labour regulations would encourage hiring. 78% agreed that current regulations are an obstacle to hiring more workers.

The SBP SME Growth Index found that the labour regime was a key barrier to hiring new people, particularly young people.

A 2020 Study further found that fair-dismissal requirements were a major influence in holding back job creation.

Employers, businesses and small businesses are the people creating jobs. We should listen to them. If more than three-quarters of them are saying that they aren’t hiring because it’s hard to dismiss workers, then legislators should be amending regulations to make it easier to dismiss workers.

South Africa is not some advanced economy with full employment and a sophisticated and educated industrial sector. We have millions of untested, under-educated and under-skilled people. But they have drive, energy and hustle. They want to work. They just need to be given a chance.

And the best way to incentivise businesses to give them that chance is to mitigate the risk. If an employer can amend their mistakes, they will be more willing to take much needed risks.

We can fix our unemployment. We just need to allow employers to say the simple phrase: “You’re fired!”

That means investigating the Labour Relations Act, Basic Conditions of Employment Act, Black Economic Empowerment, and other stringent regulations and gutting them as necessary to allow businesses to hire and fire with minimal red tape.

The ideal would be for South Africa’s entire labour regulatory framework to be scrapped. But a workable compromise is to consider the Free Market Foundation’s proposed Job Seekers Exemption Certificate (JSEC). This law would allow unemployed individuals to opt out of labour “protections” so that they can become more hireable.

The JSEC is a great compromise between total liberalisation, and the kakocracy that we currently live under today.

We have the keys to solving unemployment. We just need to allow people to work. And the first step to accomplish that is to allow them to be fired.

Nicholas Woode-Smith is a political analyst and author. He is a senior associate of the Free Market Foundation and the Managing Editor of the Rational Standard. He writes in his personal capacity.