The section of the Labour Relations Act governing labour broking has been removed from the draft amendment Bill, amid talk that the changes were so poorly written that they were kicked out by Cabinet.
However, the labour minister has strongly denied this, without providing the actual reasons for the repeal.
The amendments were expected to either ban labour broking altogether, or increase regulation of the practice.
The Democratic Alliance (DA) is in possession of four draft amendment Bills, including the amendments to the Labour Relations Act, that are currently before Cabinet, as well as the explanatory memoranda that accompany each Bill.
“Individually and jointly they propose a series of changes that are, in a number of cases, profoundly problematic and, if left in their current form, will have the effect of destroying rather than creating jobs, on the one hand, and further centralising power in the hands of the executive, on the other.”
Key changes
The DA says section 198 of the Labour Relations Act will be repealed, explaining that this is the section of the Act that makes provision for labour broking.
“However, no substitute clause is suggested. In other words, by merely deleting the clause, we will move from a situation where labour brokering is poorly regulated (the DA believes it needs to be better regulated, not banned) to one in which there will be no regulation at all. This is baffling.”
Deputy shadow minister of labour Ian Ollis says the repeal of section 198 in no way suggests a ban on labour broking. “It can't be banned by removing a clause. This is why we believe the draft Bill is poorly constructed.”
Labour broking unaffected
“It [the draft legislation] does not appropriately address labour brokering, as simply repealing section 198 does nothing to regulate that industry.
However, Parliament's Labour Committee chairperson Lumka Yengeni previously said: “The main intention here is to address the problem of labour broking, and making sure the abuse of workers is prohibited, and contract work, subcontracting and outsourcing are regulated.”
She added that the Department of Labour (DOL) is proposing amendments to several Acts, which all fall under the Labour Relations Act, and section 198 (temporary employment services) specifically. The new amendments would either effectively abolish labour broking, or increase regulation of all temporary employment services.
Ollis also says the explanation for the repeal in the memorandum indicates a misunderstanding of the Act.
The explanation in the memoranda is that the repeal seeks to address the unintended consequences of the section, which brought about the confusion in its application.
It says labour brokers manipulated this section and operated under the auspices of it and, therefore, by repealing this section the aim is to address the manifesto, which states the problem of labour broking must be addressed.
Original position
The DA says it is deeply concerned about some of the amendments, and the poor and irregular process which has defined their passage through government to date.
“It appears that they have been drafted to fulfil a political promise, but not with any intention of better shaping the regulations and rules that define our labour legislation.”
It adds that in view of the poorly formulated nature of the Bills, of their problematic content and of a number of concerns with the procedure followed in their conception to date, the DA believes these drafts need to be sent back and redrafted by competent labour specialists.
Congress of South African Trade Unions national spokesman Patrick Craven says that with no clear reasoning for the repeal as yet, the trade union will stand by its original position. “We would like to see labour broking banned altogether, but we will wait to see how far the government will take it.”
Cabinet rejection
“In recent Cabinet press briefings, the government has confirmed that Cabinet has declined to give their approval to these Bills as yet, due to the possible impact on the economy,” says the DA.
However, labour minister Membathisi Mdladlana says reports that claim the new labour legislation affecting labour broking and other issues was so shoddily written, to the extent that the Cabinet refused to accept it, are “totally incorrect”.
“The Bills are currently being discussed by Cabinet committees, Cabinet clusters and various government departments and it is, therefore, incorrect to say the Bills have been thrown out by Cabinet, because they have not been in Cabinet yet,” Mdladlana notes.
He instead applauded the black lawyers who drafted the bills, saying black lawyers are always associated with incompetency, unprofessionalism and amateurism.
The DOL says it has no further comment on the repeal of section 198.
Long process
Ollis says the draft amendments were handed to Cabinet at the end of May and needed to reach Parliament by the end of July at the latest for the year-end deadline to be met, but this did not happen.
He adds that the draft amendments are still with Cabinet and have not even been passed on to the National Economic Development and Labour Council (Nedlac) yet. “It has to go to Nedlac for the agreement of the various partners. Then it goes into the public domain for comment. Parliament gets it last.”
Delays were caused, because Cabinet did not wholeheartedly endorse the changes proposed by the labour committee and sent it back for redrafting, according to Ollis.
“I hear that they are now doing further studies on the impact of the potential new Act,” says Ollis.
The DA confirms that all four Bills have been referred for regulatory impact assessments. “It is unusual for this to be done so early in the process, and suggests a concern that jobs may be lost and the economy adversely affected if the legislation, in its current form, were to be approved.”
No ban
The DOL is proposing amendments to several Acts, which all fall under the Labour Relations Act, and the amendments would either effectively abolish labour broking, or increase regulation of all temporary employment services.
“Business and labour are fighting over this and the ANC is mediating. Cosatu wants it banned and business wants it regulated. I agree with business. The more options you have, the better for the country,” notes Ollis.
He says the question is just in the detail. It's about whether the workers get benefits, support systems and medical aid, and some brokers don't provide this.
“So clearly there is an argument for regulation.”
Initial proposed amendments by the DOL suggested the department was also leaning toward regulation.
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