Labour broking to be regulated, not banned

Proposed changes to SA's labour laws and regulations, which are making their way through Parliament, will not ban labour brokers if enacted, but will regulate the sector more stringently.

The proposed Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill aim to revise fixed-term labour regulation and introduce the principle of equal pay for equal work, after six months of employment. Concerns have been raised that this will push up the cost of hiring staff, leading to job losses.

News emerged on Friday that the amendments contained in the Labour Relations Amendment Bill regulate labour brokers, but do not propose an outright ban. The Bills were approved by Cabinet for submission to Parliament during its 20 March meeting. It is not clear when the process will be complete, as public hearings still need to be held.

Labour spokesman Musa Zondi confirms that, if the Labour Relations Amendment Bill is enacted in its current form, brokers will not be banned, but regulated. However, he says the public hearing process may change the picture.

Zondi says the African National Congress manifesto speaks to regulating the sector, and not banning it. He notes that the department never aimed to get rid of labour brokers.

Labour minister Mildred Nelisiwe Oliphant, speaking at the inaugural Jobs Summit and Jobs Fair, in KwaZulu-Natal last week, said government had set various processes in motion to achieve its target of decent work practices.

Oliphant said this included amending critical areas of legislation like the Labour Relations and Basic Conditions of Employment. “These two Bills are now before Parliament.

“The Bills are aimed at promoting sound and responsive legislation and policies to attain labour market flexibility for competitiveness of enterprises, which is balanced with the promotion of decent employment.”

The latest version of the Bill defines temporary employment service as “any person who, for reward, procures for or provides to a client other persons - who render services to, or perform work for the client” and who are paid by the temporary employment service.

It notes that temporary services means work for a client by an employee that does not exceed six months, or is a substitute for a staff member who is temporarily absent; or in a category of work and for any period of time which is determined to be temporary services by a collective agreement.

In addition, if both the client and the service are liable under the Bill, the staff member can institute labour proceedings against either, it adds.

A temporary employment service must provide an employeeit assigns to a client with written particulars of employment that comply with the Basic Conditions of Employment Act, states the Bill.

An employeemay not be employed by a temporary employment service on terms and conditions of employment, which are not permitted by the Bill, or any employment law, sectorial determination or collective bargaining agreement, it says.

People cannot act as temporary employment services, unless they are registered in terms of “any applicable legislation in force”, says the proposed legislation. “The fact that a temporary employment service is not registered will not constitute a defence to any claim.”

John Botha, executive director for strategy at Production Management Institute, explains the proposed new labour laws planned to revise fixed-term labour regulation and introduce the principle of equal pay for work of equal value after six months of employment.

“This is simply absurd, because minimum legislated wages in SA are established under bargaining council agreements, sectoral determinations and the Basic Conditions of Employment Act.

“Effectively, equal pay includes benefits like pension and medical aid, which will shoot up payroll costs to such an extent that business will be totally deterred to employ.”

Botha explains that, for every percentage increase in employment cost there is a corresponding 0.7% decrease in the level of employment. “If the ratio is applied, employment would decline by around 13% where this principle of equal pay is applied.”

The Labour Relations Amendment Bill contained very little that benefited business and offered little hope for job creation, says Botha.

In March, Cosatu said labour brokers' workers are paid lower wages and have fewer benefits, like medical aid and provident funds, and have no job security at all. They can be hired and fired at any time by a phone call from the client company to the labour broker, and they can never plan their lives more than a week or two ahead, it said.

“We demand a total ban of this modern form of slavery. Cosatu is adamant that labour brokers must be completely banned.” However, after the Cabinet meeting, spokesman Patrick Craven said, while the federation would still support a ban, it is willing to work with government on other solutions that suit both parties.

Craven was not available to comment this morning.