Selective informality: The self‐limiting growth choices of small businesses in South Africa

Abstract

AbstractBased on in‐depth interviews, this study explores the reasons why many South African small businesses abide by some aspects of labour law, but not others: they generally comply with legislated labour regulations, but less so with regulations set by the statutory industry‐level Bargaining Councils. Such selective engagement with the system is attributed to employer hostility to unions in the context of post‐apartheid industrial relations. Since a larger workforce attracts closer scrutiny by the Councils, small firms are reluctant to expand, relying on outsourcing to increase production. The very size of the firm is thus a pliable concept, positioned between formal and informal norms.