© Kamla-Raj 2014 J Sociology Soc Anth, 5(2): 141-152 (2014) Small Towns and Small Enterprises: A Study of Workplace Relations in a Rural Town in South Africa Aviwe Antoni 1 and Ikechukwu Umejesi 2 1 Department of Sociology University of Fort Hare East London Campus South Africa 2 Department of Sociology University of South Africa, Pretoria 0003, South Africa 2 Office Telephone: +27124296475, 2 Cell: +27792471351 2 E-mail: ikeumejesi@gmail.com or umejei@unisa.ac.za KEYWORDS Workers. Employers. Vulnerability. Exploitation. SMMEs. Rights ABSTRACT Scholarly literature on Small, Micro and Medium Enterprises (SMMEs) view small scale businesses as employment generators, skills developers, and therefore, contributors to economic growth and poverty reduction. While this notion dominates scholarship and policy circles, it ignores other issues that are inherent in management- labour relations in SMMEs. This study explores the vulnerability of workers in small businesses. It examines the factors contributing to workers exploitation, the extent of workers vulnerability to exploitation and workers awareness of their rights in their workplaces. It focuses on employees of small businesses in Stutterheim, a small town in Amatole District in South Africa’s Eastern Cape Province. The study uses both qualitative and quantitative methods to collect empirical data. Research findings reveal that workers in the study area are vulnerable to exploitation occasioned by high rate of poverty, scarcity of jobs, low levels of worker education, workers’ unawareness of their rights, and official indifference to labour practices. INTRODUCTION The employment statistics in post-apartheid South Africa (post- 1994), suggest that large pro- portion of the population is unemployed (Sta- tistics South Africa 2013). According to Statis- tics South Africa report 2004: “There is evidence that the national unemployment level currently estimated at 28.4% is increasing at an alarming rate” (Statistics South Africa 2004: 1). Yet, as of 2004 when this report was published, the unem- ployment rate had scaled down from a high of 29% in 2001 (see International Monetary Fund 2011). Although there has been a downgrade in the numbers since 2004, the unemployment fig- ure is still relatively high. In 2013, the Second Quarterly Labour Force Survey released by Sta- tistics South Africa puts the breakdown of the unemployment rate by population group at: Black/African 29.1%; Coloureds 25.1%; Indians/ Asians 13.4%; Whites 6.1% and all population groups 25.6% (Statistics South Africa 2013: xv). Another study conducted by South Africa’s In- stitute of Race Relations in 2011 found that, “one in two young South Africans – and two out of three young African [black] women – is jobless. The unemployment rate among all 15 to 24 year- olds is 51 percent, more than twice the national unemployment rate of 25 percent” (South Afri- can Institute of Race Relation 2011: 1). This em- ployment picture of South Africa demands ur- gent measures from the state. To the govern- ment, therefore, SMMEs provide a leeway to these high unemployment records (Small Busi- ness Project 2009). According to Section 1 of South Africa’s National Small Business Act of 1996, as amend- ed in 2003, small business means, a separate and distinct business entity, in- cluding cooperative enterprises and nongov- ernmental Organisations, managed by one owner or more which, including its branches or subsidiaries, if any, is predominantly car- ried on in any sector or subsector of the economy...and which can be classified as a mi- cro-, a very small, a small or a medium enter- prise. Under this Act, the number of employees in SMMEs range from 5 to 200 (National Small Busi- ness Act 1996). The development of SMMEs is viewed as an answer to the high rate of unem- ployment – it is believed to contribute signifi- cantly to job creation, social stability and eco- nomic welfare, not only in South Africa, but across the globe (Ladzani and Van Vuuren 2002). According to Bromley (1985: 3) “small scale en- terprises are seen as human in scale, congenial to work in, convenient for clients, cheap and strongly competitive and favourable in the de- velopment of entrepreneurial skills and techno- logical innovation.” In addition, SMMEs are viewed as labour intensive, employment gen-