Luthuli House is headed for fireworks over statements made by Labour Minister Membathisi Mdladlana in the build up to the election about the banning of labour brokers.
Labour brokers (also referred to as temporary employment services) supply temporary labour to private companies or government for a fee and the sector in South Africa consists of 3 000 agencies employing more than 500 000 workers and is said to be worth R26-billion a year.
Cosatu is demanding that the government ban labour brokers outright, but both ANC secretary general Gwede Mantashe and president Jacob Zuma have said in the past few weeks that the ANC is looking to regulate the sector, not to ban it.
This contrasts with statements made by Mdladlana in which he told numerous gatherings, including a chemical workers’ union conference, that the ANC would ban labour brokers who he described as ”no better than human traffickers”.
Labour analysts said that any attempt by the government to ban labour brokers would lead to a Constitutional Court challenge and there were other, more effective, ways of regulating the sector.
With Cosatu playing an instrumental role in Zuma’s rise to the top of the ANC and his imminent inauguration as president of the republic, it is expected to push government to start implementing its policies.
Cosatu spokesperson Patrick Craven said this week ”labour broking must be banned,” claiming that labour brokers exploit workers to remain competitive by paying ”poverty wages” and denying them benefits that are provided for by law.
Richard Pike, CEO of Adcorp, the biggest listed placement and employment company, said a ban on labour brokers is unworkable as it would put too many people out of work.
”The minister of labour is caught between a rock and a hard place because he has made an election promise that he can’t fulfil,” said Pike. ”The minister has tried to pander to the unions to get backing for a role in the Zuma Cabinet.”
Pike said that at least 75% of the 70 000 workers employed by Adcorp find permanent employment within 12 to 18 months.
Cosatu says the job losses flag raised by the labour-broking sector is merely ”blackmail” and insisted that the temporary employees should be absorbed into the client company’s workforce.
But in Namibia, where the labour broking sector was outlawed recently, the decision led to numerous job losses.
Business Unity South Africa’s (Busa) executive director of social policy, Vikashnee Harbhajan, said that based on information obtained from a recent visit to the National Employers’ Federation in Namibia it appears that upward of 30% of flexible staff lost their jobs.
Jan Theron, the coordinator for the Labour and Enterprise Policy Research Group (LEP) at the University of Cape Town, said that banning labour brokers would be a lazy response.
Theron said LEP had conducted research for the department of labour in 2004 and had made a number of recommendations that had not been implemented.
Theron proposed registering all labour brokers and said that if a Âclient used an unregistered labour broker the client should be held liable.
He said current legislation does not define the term temporary and this is a huge problem.
Theron said the term of temporary employment should be restricted. He said once a worker had been with a client for two to three months he or she should acquire the same legal protection against unfair dismissal as a full time employee.
He also stressed that equality of pay should be enforced by the legislation so do not arise situation where people are doing equal work for less pay.
”You have to ask what has been happening all this time,” said Theron. ”Why has regulation not been introduced yet?”
Cosatu’s parliamentary unit has been given the task of with completing a framework document that will Luthuli House is headed for fireworks over statements made by Labour Minister Membathisi Mdladlana in the build up to the election about the banning of labour brokers.
Labour brokers (also referred to as temporary employment services) supply temporary labour to private companies or government for a fee and the sector in South Africa consists of 3 000 agencies employing more than 500 000 workers and is said to be worth R26-billion a year.
Cosatu is demanding that the government ban labour brokers outright, but both ANC secretary general Gwede Mantashe and president Jacob Zuma have said in the past few weeks that the ANC is looking to regulate the sector, not to ban it.
This contrasts with statements made by Mdladlana in which he told numerous gatherings, including a chemical workers’ union conference, that the ANC would ban labour brokers who he described as ”no better than human traffickers”.
Labour analysts said that any attempt by the government to ban labour brokers would lead to a Constitutional Court challenge and there were other, more effective, ways of regulating the sector.
With Cosatu playing an instrumental role in Zuma’s rise to the top of the ANC and his imminent inauguration as president of the republic, it is expected to push government to start implementing its policies.
Cosatu spokesperson Patrick Craven said this week ”labour broking must be banned,” claiming that labour brokers exploit workers to remain competitive by paying ”poverty wages” and denying them benefits that are provided for by law.
Richard Pike, CEO of Adcorp, the biggest listed placement and employment company, said a ban on labour brokers is unworkable as it would put too many people out of work.
”The minister of labour is caught between a rock and a hard place because he has made an election promise that he can’t fulfil,” said Pike. ”The minister has tried to pander to the unions to get backing for a role in the Zuma Cabinet.”
Pike said that at least 75% of the 70 000 workers employed by Adcorp find permanent employment within 12 to 18 months.
Cosatu says the job losses flag raised by the labour-broking sector is merely ”blackmail” and insisted that the temporary employees should be absorbed into the client company’s workforce.
But in Namibia, where the labour broking sector was outlawed recently, the decision led to numerous job losses.
Business Unity South Africa’s (Busa) executive director of social policy, Vikashnee Harbhajan, said that based on information obtained from a recent visit to the National Employers’ Federation in Namibia it appears that upward of 30% of flexible staff lost their jobs.
Jan Theron, the coordinator for the Labour and Enterprise Policy Research Group (LEP) at the University of Cape Town, said that banning labour brokers would be a lazy response.
Theron said LEP had conducted research for the department of labour in 2004 and had made a number of recommendations that had not been implemented.
Theron proposed registering all labour brokers and said that if a Âclient used an unregistered labour broker the client should be held liable.
He said current legislation does not define the term temporary and this is a huge problem.
Theron said the term of temporary employment should be restricted. He said once a worker had been with a client for two to three months he or she should acquire the same legal protection against unfair dismissal as a full time employee.
He also stressed that equality of pay should be enforced by the legislation so do not arise situation where people are doing equal work for less pay.
”You have to ask what has been happening all this time,” said Theron. ”Why has regulation not been introduced yet?”
Cosatu’s parliamentary unit has been given the task of with completing a framework document that will influence debate on these issues in ÂParliament.
The framework document will be developed through consultation at the alliance level and discussions at Nedlac.
Cosatu said the ANC’s election manifesto’s promise to strive for decent work for employees cannot be achieved without ending casualisation and outsourcing of labour.
The manifesto states that the ANC will ‘introduce laws to regulate contract work, subcontracting and out-sourcing†and will ‘address the problem of labour broking and prohibit certain abusive practicesâ€.
Cosatu’s parliamentary coordinator Prakashne Govender said the unions had a position that labour brokers must be banned and the fact that the ANC’s election manifesto refers to ‘decent work†shows there is a serious commitment to end this practice.
However, a statement made by Zuma during May Day celebrations in East London last week that the ANC wants to regulate contract work contradicts this and Mantashe recently told the Sowetan newspaper that the ANC has no intention of banning labour brokers.
Elias Monage, president of the Confederation of Associations in the Private Employment Sector (Capes) says Mdladlana’s statements have been contradicted by Zuma, Minister of Trade and Industry Mandisi Mpahlwa and ANC treasurer Mathews Phosa.
‘It is a pity that Labour Minister Membathisi Mdladlana now, after 12 years, chooses to use a public platform to launch a scathing and unsubstantiated attack on South Africa’s temporary employment services industry,†said Monage.
‘A far more constructive approach is required on the part of the minister to engage with the formalised temporary employment services industry via Capes and find a way to drive a common agenda. We agree that illegal and unethical operators should be banned and that we must work towards decent work for all South Africans,†said Monage.
Dennis George, secretary general of the Federation of Unions of South Africa (Fedusa), said his organisation had discussed the matter in a meeting with Zuma in April and that Zuma had ‘clearly indicated that the ANC intends to regulate labour brokers and prohibit certain practices that violate workers constitutional rightsâ€.
‘In our view, some labour brokers are bad and some make a positive contribution to the labour market,†said George. ‘It is the good labour brokers that we as Fedusa want to regulate and the bad ones we want to regulate out of business.â€
The South Africa Foundation’s Michael Spicer said it makes sense to separate out the few labour brokers who have given the industry a bad name, however, he said, business is opposed to the idea of banning all brokers, which he called a ‘naïve†approach to solving the problem.
‘We will strongly fight this if it goes beyond targeting a few individuals,†said Spicer.
Critics of Mdlalana’s stance say Cosatu has lost a significant number of members over the past few years and would therefore have an interest in doing away with temporary labour as it is harder for these workers to unionise.
Debbie Lieberthal, one of the owners of Umkhonto Labour Holdings, a labour broker, said the unions want the industry banned because there are between 800Â 000 and one million people who cannot be unionised. Another reason, she believed, was that strikes are no longer as effective because companies can bring in temporary labour. Lieberthal said the organisation pays above the minimum wage and all workers are registered for UIF and workers’ compensation.
Harbhajan said Busa does not support the legislative amendments proposed by Mdladlana and that further deliberations and consultation are essential.
She said there had been no consultation on the banning of labour brokers, but added that discussions about atypical employment were pending at Nedlac.
‘The reality is that the call to ban from some quarters has been made without any significant attempt to regulate the industry and enforce existing legislation,†she said.
Harbhajan said the role of labour brokers as a legitimate player in the labour market has been proved.
‘They channel the entry of hundreds of thousands of workers into the formal labour market as it is their core business focus. They also have the ability to mediate by moving workers from sectors in distress to those experiencing economic growth given their reach across all sectors and industries,†she said.
Busa believes it is inappropriate to blame legal labour brokers for undermining workers’ positions.
The solution, said Harbhajan, is effective co-regulation by the industry and the department of labour. However Busa recognises that resources are limited and the industry does not have the statutory authority to regulate, although it has been self-regulating for some time.
Mdladlana and the labour department had not responded to questions at the time of going to print.