by Piet Coetzer


Call to regulate labour brokers

Judge Dunstan Mlambo

The Judge President of the Labour Court, Dunstan Mlambo warned that unless South Africa’s depressing unemployment figures are turned around, “we may face yet another revolt from the youth that may lead to instability of the kind manifested by the Arab Spring revolt.” He has come up with a strong plea for the tougher regulation of labour brokers. 

Speaking at the 25th annual Labour Law Conference, judge Mlambo said the wage bill is often cited as the sole cause of declining profits. Workers conditions and wages bear the brunt of a full frontal assault to raise profits.
Labour broking fills the pockets of labour brokers at the expense of the employee while the client gets the fruit of the employee's labour leaving the employee with no protection under labour laws, he said.
“It would be better to live with more regulations so as to curb the appetite of those who control the levers of our economy. The Lehman Brothers fiasco and the more recent involvement of Barclays Bank and HSBC with the manipulation of the Libor rate shows that we need laws in place to regulate the economy and prohibit practices that do untold damage to the future of society when financial institutions, entrusted with the life savings of the man in the street, go belly up because of unbridled greed and corruption of bankers,” he said.
However, he also directed some strong words at emerging entrepreneurs especially from the previously disadvantaged. He said they “need to be reined in otherwise, as history has shown, the poor will be ground into the dust under punishing labour conditions and declining wages so that the captains of industry grow fatter with the working class becoming skinny.”
Looking at the global recession he remarked that the theme of the conference – Decent work in a sustainable workplace – is "very telling and timely".
In the wake of the global financial crisis since 2008, global growth in wages fell sharply from 4.2% in 2007 to 1.4% in 2008 and is expected to drop further regardless of any signs of economic recovery.
Moreover, as workers move from the formal sector to the informal economy, there is increased competition for jobs. Meagre earnings also reduce workers' bargaining power and makes them more vulnerable to exploitation.
Decent work
The demand for welfare, work and decent conditions are central to struggles across the world. Access to decent work is enshrined in Article 23(1) of the Universal Declaration of Human Rights. However, in many countries this right is not realised.
Access to sustainable employment has objective values as a social good, be it reducing poverty, increasing personal empowerment and self-esteem, reducing social problems like crime and social exclusion, or increasing consumption and government revenue through taxation of income. Quality and conditions of employment also matter in relation to social welfare, family life and death.
It is this that was the motivation for the development of the idea of "decent work" as a concept of improving human welfare. The premise being that it is work and job creation that is the best driver of improvement to human welfare.
Mlambo traces extensive changes in the local labour market back to the introduction of the 1995 Labour Relations Act (LRA). “Work has become increasingly diverse with an increasing proportion of the work being performed by workers in non-standard employment. This process of informalisation has led to an increasing number of workers not being protected, or being inadequately protected by labour law,” he said.
Many South African employers adopt strategies to disguise employment in order to deprive employees of labour law protection. In the period after the enactment of the LRA, many employers sought to convert employees into independent contractors.
Research shows that labour broking arrangements, among others, have become the mechanism most commonly used to deprive vulnerable employees of labour law protection.
These schemes deprive employees of their constitutional and legal protection, operate unfairly against employers who comply with the law and transfer considerable costs associated with unregulated work to workers, their families and society more generally.
The relationship between the agency and the client is a commercial arrangement and falls outside the purview of labour laws and labour courts.
Section 198 of the LRA has been used by companies to activate widespread labour law avoidance for both temporary and permanent employees.
Labour broker debate
In the present, heated, debate about labour brokering, labour brokers have deflected attention from the plight of employees caught up in a temporary employment services (TES) situation by warning that any decision to prohibit labour broking will swell the ranks of the unemployed.
The unions have described labour broking as a form of slavery that needs to be removed from society in its entirety.
Referring to South Africa “taking the first prize in terms of being the most unequal society in the world,” Mlambo said one of the foremost “indicators of the inequality characterising our society is unemployment, which discriminates according to race, gender and geographical location”.
“While we acknowledge the role played by students in the 1976 revolt in the township schools, we are also mindful of the fact that their contribution to our liberation came at a personal cost to themselves. They placed the struggle for liberation before education and became known as the lost generation. Today the learners are unable to reap the benefits of the struggle for democracy as there are no jobs for matriculants and school leavers.
“The Constitution protects the right of everyone to basic education but given the dismal situation at schools with poor infrastructure, inadequate learning material and a dire shortage of skilled teachers capable of teaching mathematics and science, the future looks bleak. Ironically, at best for them, they will remain ‘hewers of wood and drawers of water’ as was the lot of their parents under Bantu education,” he said.
They will become easy pickings for unscrupulous labour brokers unless the LRA is revisited to ensure that the exploitation of workers in TES relationships is avoided.
“One way of doing this is to ensure that all brokers are registered and that both the broker and the client are jointly and severally liable for compliance with the employer's obligations under labour law if that entity exercises a sufficient degree of control over that employee. Furthermore the employee should be able to institute proceedings against both the labour broker (TES) and the client or both in the CCMA, the Labour Court or any other forum having jurisdiction,” he said.

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