Reforming Labour Bro King

8/2/2019 Reforming Labour Bro King

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Reforming Labour Broking: A Joint Policy Paper

P A G E 1

A Joint Position Paper by

the Democratic Alliance

andandandand

the Congress of the People

ReformingLabour Broking


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P A G E 2

Introduction

Labour brokers or Temporary Employment Services have become prominent role-players in the SouthAfrican economy where they facilitate employment creation, train workers and assist business to optimisetheir operational design. If there was no need for the services they offer, they would not have evolved orsurvived in the marketplace.

The stated purpose of brokers is to:

Facilitate cross-utilisation of temporary workers between multiple organisations and sectors(individual workers will not be able to find multiple opportunities in a short space of timethemselves);

Provide administrative services in respect of companies that are unable to provide it for staff (ormore cost effectively) such as payroll admin, leave, UIF, Workmens compensation, which allowsorganisations to focus on core business;

Provide evaluation, training and relocation of unskilled, semi-skilled and skilled workers; and Provide a ready workforce to fill critical short-term vacancies in the various industries.

The industry generates turnover of in excess of R23 billion per annum and places more than 500 000temporary assignees in jobs every day in South Africa.

Concerns have been raised about exploitative practices in the industry. These require urgent evaluation andattention.

The question of labour brokers, and how this industry is going to be handled, will have a far-reaching impacton how South Africa tackles its problems in the future. It is for this reason that the Democratic Alliance andthe Congress of the People have decided to publish our own joint policy paper on the matter.

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P A G E 3

I. The labour broking market

The increase in temporary employment services isan international phenomenon, indicative of theneeds of a rapidly changing global village, whereindustries expand and contract at increasing speedand modify their product offerings to matchprevailing global demand.

Temporary workers are often needed to assist intimes of rapid change and retooling. Industries inthe throws of this rapid change may not have therecruitment skills to locate temporary workers

within the required time frame. This function isoften filled by brokers and temporary employmentservices.

Many industries, including agriculture, are cyclicaland therefore need more staff at particular times.The employment of full staff compliments duringoff-peak times is not efficient or affordable. Labourbrokers help workers during off-peak periods tofind work.

Labour brokers operate across the entire economy,including the professional and manual labourmarkets. Brokers provide temporary staff forgovernment and state owned enterprises (SOEs),the IT industry, the financial sector, productionindustries, construction and mining. Labourbrokers are, therefore, a key component ofeconomic activity, and provide a vital service to theworkers they place and the companies they staff.

The concerns that have been raised regarding theexploitation of individuals employed by labour

brokers are real and need urgent attention. It islikely, however, that an outright ban or excessiveregulation will deepen exploitation by driving theindustry underground.

The Namibian Model is instructive in this arena.Having introduced legislation in November 2007,aimed at an outright ban on labour brokers ortemporary employment services, many ofNamibias temporary workers are now

unemployed. (Figures quoted range between 10%and 40%). If a similar approach to labour broking is

introduced in South Africa, many hundreds ofthousands of jobs could be lost. This will bedevastating to the many currently employedpeople who will be forced to join the ranks of theunemployed.

An outright ban on labour brokers will result in:

1. Immediate job-losses for temporaryworkers who will not have the resources tolocate temporary work opportunities inmany dispersed locations.

2. Vacancies in some industries going unfilleddue to an inability to locate staff with thecorrect skill-set.

3. A rise in costs due to employers needing toemploy larger in-house Human Resourcesand recruitment staff to fill the gaps left bythe exit of temporary employment services.

4. A switch to the use of small sub-contractorsinstead of temporary workers (therebydefeating the objective).

5. Fewer people being employed in the longterm.

6. The industry continuing to operate,illegally, with an increase in exploitation.

II. The proposal

Self-regulation, with industry peers andgovernment monitoring the process, is requiredand will involve:

1. Mandatory registration for all practitioners.2. The establishment of an Institute or self-

regulatory Board of Labour Brokers thatwill enforce a set of standards for theindustry.

3. A code of conduct, enforced by theindustry board itself. (Legitimate players inthe industry have an incentive to stamp outthose labour brokers who exploit workers they place the industry at risk and takeaway business).


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P A G E 4

4. Annual consideration of profit marginsattained.

5. Initiatives to promote job creation.6. A redesigned, resourced and better

managed labour inspectorate with acomputerized database of registeredbrokers, transport to all remote corners ofthe Republic, powers to search premisesand issue notices, and the support of theSAPS to gain access under certainconditions. This would include access to therecords of the Institute/Board to beestablished.

These measures would help government to enforceexisting labour laws the labour brokersthemselves would have to identify those partiesnot meeting the code of conduct and minimumstandards, and then notify the authorities. Thebetter resourced inspectorate would be able to

investigate illegal operators and issue compliancenotices, followed by legal action. The measureswould also be able to enforce legislation such as

the Basic Conditions of Employment Act and theexisting legislation supporting UIF, WorkmensCompensation, annual leave and the pension andmedical benefits due to any temporary workers inthe Republic.

Self-regulation is an effective mechanism, asdemonstrated in actions to address exploitivepractices in the micro-lending industry In thisinstance new legislation neutralized undesirablepractices in that industry. The Estate Agency Affairs

Board continues to regulate an industry, which,similarly, has many small operators in remotelocations.

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Conclusion

Our proposals result in a win-win situation. The corrective to worker exploitation is not necessarily moreheavy-handed regulation, but smart regulation and appropriate enforcement, which is sorely lacking inSouth Africa. Government everywhere has a poor performance record when compared to the private sector.The less we have to rely on government to regulate, the more effective an industry will be.

This policy demonstrates our principled approach to policy making. Government must facilitate, rather thancontrol, economic activity and efficiently provide those essential services that the private sector is not willingor able to deliver.

Labour brokers perform a useful service within the economy and must be permitted to operate, providedthat they do not transgress industry self-regulated norms and standards designed to prevent exploitation.

Documents

Reforming Labour Bro King