Comply or pay up

Johannesburg, 08 Sept 2009

The Department of Labour will go ahead with amendments to its labour laws and introduce hefty fines for companies that fail to comply.

Following heated debates in Parliament between government, trade unions and business, the department has indicated it will introduce tough regulatory measures and chooses not to heed calls for the abolishment of labour broking.

The department is proposing amendments to the several Acts which all fall under the Labour Relations Act. The new legislation would either abolish or increase regulation of all temporary employment services - depending on who gets their way.

While labour minister Membathisi Mdladlana and several trade unions have called for the abolishment of temporary services and indicated they were no longer willing to table discussions on proposed amendments, the director-general has taken a milder approach.

The department has now proposed a fine of 10% of a company's turnover as a way of improving compliance. Labour department director-general Jimmy Manyi said the department searched for ways to make it harder for employers not to comply with labour laws.

“What matters most to employers is the bottom line. In other words, they are only concerned with making profit. The department has to, therefore, impact upon the bottom line. Hence the department proposed a fine in the amount of 10% of turnover,” said Manyi.

While Mdladlana previously stated he would no longer give the National Economic Development and Labour Council (Nedlac) any more time to take submissions and approve the department's proposals, Manyi noted Nedlac is debating the best ways to strengthen the law.

Defining relationships

Manyi, however, didn't state when labour legislation would be amended and if the department had established any timelines for the conclusion of the matter.

“There have to be consequences for non-compliance. The law at present is very lazy and ineffective. Better enforcement is what is needed,” he said.

Manyi noted the legislative amendments must effectively address “the problem of labour broking and prohibit abusive practices”. The responsibility needed to be shifted back to the main employer and possible amendments will include definitions of employer and workplace and organisational rights, he pointed out.

He explained that the department would introduce legislation to regulate the relationship between employer and employee. He said where labour brokers were involved, the question remained who the employer was - was it the place where the worker actually worked, or was it the labour broker?

No skills shortage

The levels of non-compliance by employers were worrying and needed to be addressed, he said. According to him, the introduction of sector charters had caused confusion as employers only complied with the charters and tended to ignore labour laws, he said.

Manyi added that the “considerable growth” of temporary employment services or labour brokers in SA had led to exploitation and was not due to any skills issues in the country.

“Currently in SA, there is an over-supply of skills. There are no skills shortages in the economy,” he said.

Co-regulation

Meanwhile, the Confederation of Associations in the Private Employment Sector (Capes) and Business Unity SA (Busa) have proposed a co-regulation model for the temporary employment services industry.

Capes has proposed an enforcement of existing statutes governing the temporary employment on a co-regulatory basis. Instead of the Department of Labour devising new legislation or banning labour brokering, a co-regulatory body would be established to register temporary service providers, investigate and de-register service providers to protect vulnerable workers.

The Association of Personnel Services Organisation also previously called for a co-regulation model for the industry. Capes and Busa also stated they support the ratification of the International Labour Organisation's conventions and recommendations, including the notion of decent work and employment best practice.