ANC rejects Cosatu's call for a ban on labour brokers

ANC head of economic transformation Enoch Godongwana. (David Harrison, MG)

ANC head of economic transformation Enoch Godongwana. (David Harrison, MG)

ANC head of economic transformation Enoch Godongwana has rejected Cosatu’s call to ban labour brokers – saying the move would be detrimental to economic growth in the country.

Cosatu took a resolution at its national congress held at Gallagher Estate in Midrand this week – calling for the total ban of labour brokers.

This came a few months after the government made changes to the Labour Relations Act to provide workers with job security. The changes, among other things, will force employers to hire employees on a permanent basis after working on a temporary basis for three months. Despite the new regulations, Cosatu has insisted on a total ban of labour brokers.

Speaking on the sidelines of the Cosatu congress, Godongwana came short of describing Cosatu’s call as unconstitutional.

“What is missing in the debate around labour brokers is a constitutional principle. We can’t ban [any] economic activity when people are making business. What we can do is to regulate that activity and deal with the negative impact. That’s what our [ANC] manifesto says. That’s exactly what we have done – regulate the business,” said Godongwana. Labour brokers in the country are reported to employ just over 1-million people who are placed at various companies on a short-term basis.

A former unionist, Godongwana said there was nothing in the Constitution that prevented the government from regulating economic activity.

“We made sure that we can only employ people [on a temporary basis] for a limited period. What we have also done is to create an environment where there is a joint responsibility between labour brokers and the employer of the labour brokers. That is an instrument to limit the use of it,” said Godongwana.

He said there needed to be a balance between the rights of workers and the economy.

“We have to balance between rights and the economy. In that respect we say to what extent we [can] allow an environment of economic growth and the level of worker right. It’s a delicate balance that we need to look at. We are trying to round that balance, for instance there is key debates around the national minimum wage. That issue will arise. How do you make the necessary political choices? Which choices do you make to advance what objective?”

Earlier on Wednesday, Labour Minister Mildred Oliphant accused Cosatu leaders of having double standards over the issue of labour brokers. She revealed during her address to the more than 2 500 delegates that some of Cosatu leaders were benefiting financially from the business.

“Some of the affiliates have partnered with the same companies that are using labour brokers as part of investments,” said Oliphant. She accused the federation of reneging on its initial agreement on the regulation of labour brokers. She said Cosatu leaders had agreed to allow labour brokers [to continue to do their job] for three months as long as companies contributed to a skills levy to its affiliates.

“On their own bargaining agreements, they have allowed the continuation of labour brokers in the industries that they organise.” She said most leaders who were pushing for the total ban of labour brokers, participated in meetings where they were clarified on everything.

“At the same time, they [some Cosatu leaders] are delegates here. We have not given that information [to workers]. It was the first time [they] hear this things. I thought that maybe sometime we need to take these things seriously rather than to blame government because everybody blames the government, while it has done its best. What should happen is that the public must know, the workers must know. Also, they must know how the leadership are doing this things,” said Oliphant.

She also criticised union leaders who were using union investment companies to benefit themselves financially as opposed to workers.

A Mail & Guardian survey earlier this year revealed Cosatu unions owned combined investments valued at R20-billion, some in top South African companies. In some instances, affiliates invest in companies where they organise workers, making it difficult for union leaders to act impartially in their members’ best interests.

Oliphant said: “It seems as if unions are [now] being commercialised because everybody is focusing at what is happening financially. It seems as if they are focusing on investments rather than servicing the workers. Immediately when you invest, you become an employer. The question is as an employer how can you organize in the very same company and come and make the demands on behalf of the workers while you are the owner as well? The workers it means are the owners of certain companies. Those are the issues that I thought we need to look at so that when they [Cosatu delegates] take a stance to review whatever programme, they [understand] those issues.” 

Oliphant also criticised the federation for calling for the scrapping of e-tolls, while on the other hand it was benefiting financially from the controversial system. Through its investment arm – Kopano Ke Matla – Cosatu owned 3% of Raubex, the construction company that worked on improving the R21 freeway that introduced e-tolls. Kopano Ke Matla’s Raubex shares have a market value of R6.7-million, according to the company’s schedule of investments. The federation has since said it sold its stake in Raubex.

Godongwana dismissed claims that the ANC was against the total ban of labour brokers because some of its senior leaders had shares in some of the labour brokers.

“The problem with the accusation is that is so general. Unless we were to be told that a specific individual in the ANC is a beneficiary and therefore influences the outcome of the legislation.

Matuma Letsoalo

Matuma Letsoalo

Matuma Letsoalo is the political editor of the Mail & Guardian. He joined the newspaper in 2003 and has won numerous awards since then, including the regional award for Vodacom Journalist of the Year in the economics and finance category in 2015, SA Journalist of the Year in 2011, the Mondi Shanduka SA Story of the Year award in 2008 and CNN African Journalist of the Year – MKO Abiola Print Journalism in 2004. Read more from Matuma Letsoalo


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